LG ACCELERATES SMART FACTORY SOLUTIONS BUSINESS INTEGRATING AI WITH 66-YEAR MANUFACTURING EXPERTISE

Company to leverage Lighthouse Factory expertise
to develop future-oriented business models 

SEOUL, July 18, 2024 — LG Electronics (LG) is advancing its smart factory solutions business by integrating artificial intelligence (AI) and digital transformation (DX) with its 66-year history of manufacturing and production expertise.

The Ultimate Fusion of AI and Manufacturing Capabilities

Earlier this year, LG officially entered the smart factory solutions market. The Production engineering Research Institute (PRI), which has been enhancing production and manufacturing competitiveness for LG Group affiliates, is now extending its expertise to external clients. Services offered include production consulting, development of equipment and operation systems and training for technology personnel.

Despite being in its inaugural year, the business has already achieved milestones. PRI anticipates securing orders worth approximately 200 billion KRW ($215,115,411 AUD)** from external clients for its smart factory solutions.

Major clients include secondary battery manufacturers, automotive parts manufacturers and logistics companies. LG plans to expand into industries with growing factory demand, such as semiconductors, pharmaceuticals, biotechnology and food and beverage. The goal is to develop the smart factory solutions business into a multi-trillion KRW (multi-billion AUD)** enterprise by 2030, excluding revenue generated within the LG Group.

According to market research firm Precedence Research, the global smart factory market is projected to grow from 155.61 billion USD (231.36 billion AUD) this year to 268.46 billion USD (399.14 billion AUD) by 2030.***

770TB of Manufacturing Data and Over 1,000 Patents

LG has accumulated manufacturing data and know-how through 66 years of factory design, construction and operation. In the past decade, the company has amassed 770 terabytes (TB) of manufacturing and production data. The company’s competitive edge also lies in its various core production technologies essential for smart factory configuration, with PRI filing over 1,000 patents related to smart factory solutions. LG aims to set its smart factory solutions apart by integrating its manufacturing data and expertise with AI and DX, leveraging production technologies. These smart factory solutions encompass production system design, monitoring and operation through Digital Twin technology; big data and generative AI-based management of quality, industrial safety and equipment; and the provision of various industrial robots.

Production Efficiency Directly Linked to Business Profitability

Smart factory solutions focus on minimising delays or minute errors between processes. Since efficiency in production is directly linked to the overall profitability of the business, enhancing it is crucial. For example, at the LG refrigerator production line in Changwon, a refrigerator is produced every 13 seconds. A 10-minute delay in the production line would result in a production shortfall of 50 refrigerators. Assuming the price of one refrigerator is $2,000 AUD, a 10-minute delay translates to a loss of 100 thousand AUD. **

This impact is even more significant for products with faster production speeds.* Therefore, solutions that minimise delays across processes – from the seamless supply of multiple components to assembly, packaging and inspection – are essential.

Comprehensive Production Solutions Covering the Entire Journey

LG approaches the smart factory business not just as unit solutions for specific areas but as comprehensive solutions covering the entire journey for clients, from factory planning to design, construction and operation. Considering the client’s environment and industry characteristics, the company diagnoses existing factories and identifies areas for improvement, establishing a step-by-step roadmap from automation, informationisation and intelligence perspectives to maximise investment effectiveness.

Digital Twin Solution for All Value Chain

The production system design and operation solutions leverage real-time simulations using Digital Twin technology. Before the factory is built, a virtual replica identical to the real factory is created, allowing clients to preview the production and logistics flow. This enables optimal efficiency in factory design.

During the operational phase, analysing real-time data helps detect bottlenecks, defects and malfunctions in the production line in advance, thereby contributing to productivity improvement.

Autonomous Mobile Robots and Collaborative Robots

The LG industrial robot solutions for factory automation offer significant advantages. The Autonomous Mobile Robot (AMR) is equipped with cameras, radar and LiDAR sensors to recognize its surroundings and supply parts and materials. It navigates effectively, avoiding workers and obstacles through autonomous driving.

The Mobile Manipulator (MM), which combines a multi-joint robotic arm with an AMR, can automate a range of tasks seamlessly. It is capable of actions such as assembly, defect inspection and transporting parts and materials. Additionally, it can replace the batteries of nearby AMRs when they run low.

Generative AI Solutions for Easy Anomaly Diagnosis

Solutions that assist in managing yield rates and ensuring the smooth operation of equipment are also highly beneficial. Sensors installed throughout the factory detect abnormal signals such as vibrations and noise caused by equipment aging or lack of lubrication. Big data is then used to determine the causes and recommend corrective actions.

Generative AI based on large language models allows for easy use through voice commands. For example, saying “abnormal vibration in equipment A at 2 p.m.” records the abnormal signal on the server. A command like “show recent abnormal vibrations and corrective actions” provides a list of defect types and previous corrective actions in order of likelihood.

Additionally, LG has developed a real-time detection system powered by Vision AI. This system learns the factory’s normal operating conditions and detects anomalies such as temperature fluctuations and defects. It also enhances factory safety management by identifying workers who are not properly wearing safety helmets or work vests.

Expediting the Development of a Future-Oriented Business Model by Harnessing Lighthouse Factory Expertise

The intelligent autonomous LG factories in Changwon, South Korea, and Tennessee, USA, have been recognised as Lighthouse Factories by the World Economic Forum. Following the implementation of smart factory solutions, productivity at the Changwon plant increased by 17 percent, energy efficiency improved by 30 percent, and quality costs due to defects were reduced by 70 percent. Within the LG Group, production facilities at over 60 locations in 40 regions worldwide are applying solutions from PRI.

Leveraging this internally and externally validated smart factory expertise for business ventures holds meaning in terms of commercialising intangible assets. LG is driving a transformation of its business portfolio, which has traditionally focused on production of hardware, by integrating software and solutions into a future-oriented structure. This approach is expected to contribute to the rapid growth of the company’s B2B sector, one of the three key growth drivers in LG’s 2030 Future Vision, especially as it targets numerous external corporate clients.

“We will offer optimal smart factory solutions at every stage – from planning and design to construction and operation – becoming the ideal partner that supports our clients throughout their entire production journey,” said Jeong Dae-hwa, head of LG PRI.

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* Unit for production speed is parts per million (PPM).

** Currency conversion as at 18 July 2024. $1 KRW = $0.001 AUD

*** Currency conversion as at 18 July 2024. $1 USD = $1.48 AUD

About LG Electronics, Inc.

LG Electronics is a global innovator in technology and consumer electronics with a presence in almost every country and an international workforce of more than 74,000. LG’s four companies – Home Appliance & Air Solution, Home Entertainment, Vehicle component Solutions and Business Solutions – combined for global revenue of over KRW 84 trillion in 2023. LG is a leading manufacturer of consumer and commercial products ranging from TVs, home appliances, air solutions, monitors, automotive components and solutions, and its premium LG SIGNATURE and intelligent LG ThinQ brands are familiar names world over. Visit www.LGnewsroom.com for the latest news.