Manufacturing Process at a Glance... Defective Kim Reduced and Sales Soaring

'Cheonghae S&F', a seasoned seaweed manufacturer, participates in TIPA smart factory advancement
Manufacturing Execution System implementation boosts productivity by 20% and sales soar to 4 billion KRW in one year

Employees of Cheonghae S&F are inspecting gim produced according to an automated production process.
[Photo by Small and Medium Business Technology Information Promotion Agency]

[Asia Economy Reporter Kim Jong-hwa] "I never imagined it would change this much. Even someone seeing the process for the first time can understand the workflow at a glance."

Jeong Gil-hwan, CEO of Cheonghae SNF, a seasoned laver manufacturer located in Mokpo, Jeollanam-do, and a leading example of smart factories in Korea, was not initially very optimistic about smart factories. However, once the smart factory was operational, he became an advocate for it.

CEO Jeong recalled, "By chance, I came across the government's support plan for smart factories, and after internal discussions, we decided to implement it. There was anxiety about changing a method we had used for years to something new, and hesitation about whether introducing a smart factory would really bring any revolutionary changes."

Since Cheonghae SNF is a food producer, it focused its efforts on hygiene management of the production line to obtain essential certifications such as HACCP (Hazard Analysis and Critical Control Points). However, despite world-class hygiene management, defective products continued to occur on the manufacturing floor, leading to growing customer complaints.

Proper root cause analysis of defective products was not conducted. Information such as production performance and defects from each line was manually recorded by workers and had to be separately compiled and checked. Also, due to the nature of fresh ingredients where freshness is critical, temperature and humidity had to be continuously monitored by personnel moving around the site. This lowered workers’ efficiency and increased fatigue.

Cheonghae SNF chose to implement a smart factory. In October 2018, they participated in the Smart Factory Advancement Project by the Technology and Information Promotion Agency for SMEs (TIPA), investing 60 million KRW supported by TIPA and 40 million KRW from the company itself to build a Manufacturing Execution System (MES) over four months. MES is a system that manages all factory operations in real-time using accurate data. It optimizes factory tasks and processes by focusing on quick responses to the status of all processes and reducing inefficient work.

Jung Gil-hwan, CEO of Cheonghae S&F, inspecting the produced products.
[Photo by TIPA]

Once MES was established, critical control items such as temperature and metal detection management were automated, reducing unnecessary work time. Production performance and raw material management on the manufacturing floor were digitized and managed through the system. Smart factory mentors connected by TIPA generously shared their experience and support. These mentors identified various issues in the manufacturing process and provided one-stop consulting solutions to help the smart factory take root.

The results that appeared just one year after transforming into a smart factory were remarkable. First, productivity improved noticeably. The packaging line for laver sped up by about 20%, yet the perceived workload by employees actually decreased. Customer complaints naturally declined, and sales increased. Sales rose from 1.8 billion KRW at the time of smart factory introduction to 4 billion KRW, more than doubling year-over-year. Employment also increased from 8 to 17 employees (112.5%) during the same period.

CEO Jeong said, "With a cleaner and more efficient workspace, employees can achieve optimal work efficiency, eliminating even minor defects caused by small mistakes. Sales increased, and the increased sales created a virtuous cycle leading to job creation."

A TIPA official stated, "Cheonghae SNF, which pioneered smart factory adoption in the food manufacturing industry, succeeded in systematizing its production line through the smart factory mentor program, improving productivity by 200% and reducing defect rates to zero. We will continue to provide more active support to expand smart factories."

This content was produced with the assistance of AI translation services.