Hyundai Heavy Shipbuilding Develops High Tech Manufacturing
By Yung Hee Park, Waymark Seoul and Greg Hallberg
Published March 20, 2010
This port city about two hours slightly northeast of Pusan, South Korea (now called Busan) represents the engine of economic power that has taken the nation of South Korea from being an impoverished mountainous and agricultural wasteland after the 1950-1953 Korean War, to become the world’s number 10 economy. As most everyone knows, South Korea continues to wrestle with troubled relations including the perplexing uncertainties of North Korea and a long history of being conquered and occupied by Asian forces, including Japan during earlier times. However, the South Korean people are among the most energetic, well educated, and futuristically hopeful citizens of the world. While some call South Koreans highly nationalistic and difficult at times (similar to the renowned stubbornness of the French), to the point of refusing to embrace English and seeking Korean-only solutions to engineering challenges. Even well respected U.S. television science shows and documentaries share in this assessment. Pride embraces every South Korean, and not only industrial triumphs but their culture, cuisine, and home grown cinema have attracted a worldwide following. Frankly, the nation deserves a level of respect that has been long in coming. A nation the size of Minnesota has done some amazing things, to be sure.
An example of South Korean ingenuity and technical competency can be seen in Hyundai Shipbuilding’s expenditure of nearly $50 million on factory-planning software. KT Telecom Corporation, Korea’s largest such firm, built Hyundai’s new shipyard communications network. The South Korea Electronics and Telecommunications Research Institute helped design the system, yet another example of government-backed support in a country’s national interest for sustaining critical industries. The United States could learn from this effort. As the world’s largest maker of ships; from super tankers, to LNG carriers, and cargo ships, Hyundai Heavy is part of one of the South Korean chaebols, or large industrial conglomerates such as Daewoo, LG, and Samsung. It has a factory complex that stretches for miles along the port area of the city of Ulsan. On the other side of the huge industrial complex are auto assembly plants and off-highway construction machinery facilities. It is an incredible sight to behold, and epitomizes this nation’s technology talents and educational system.
The size of this production environment makes it unrealistically large to properly keep track of the movement of millions of parts and inventory in real time. We hear a lot about enterprise resource planning software in many industries, but the efficiency of such implementations is very limited in the absence of real time data. The challenge is made even larger when you have over 8,000 employees on-site, building as many as 30 enormous ships at any one time – over a space covering well in excess of 4 square miles – including nine dry docks, with the largest one longer than 7 football fields.
During the course of the past few months, Hyundai Heavy as it is commonly called, has deployed a high speed wireless network across the entire shipyard, becoming actually one of the very first installations of its kind anywhere in the world. Data to handle production and design issues moves at a rate that is roughly four times faster than what we might find in our homes. Now, the company can use radio sensors to track the movement of parts as they transit from a fabrication area, over to the dry dock housing the ship’s massive hull, and onward within the ship’s interior to be installed. Notebook computers, mobile phones, 2-way video conversations can be initiated between the on-board ship workers fully connected to the engineering and purchasing offices a mile away. Previously, workers with a problem had to climb up and out of the ship to talk to a colleague by phone or walkie-talkie. Now wireless is connected to electric lines in the vessel, which then convey the digital data to Wi-Fi transmitters placed around the hull of the ship under construction.
The end result is to enable the company to reduce expenses and streamline production. This is especially critical as the entire global shipbuilding industry has gone through a massive downturn within perhaps the whole history of this industry. No new recent ship orders put fear into the minds of the organization, although they retain an order backlog well into the year 2012. Other related operations also design and construct off-shore energy oil rig platforms, which will partially offset the grips of the global recession.
From all of this we can learn about the need for not only investment in industries of national importance, but the urgency attached to embracing new technology and meaningful efficiencies even in times of great economic uncertainty. Mergers and acquisitions, leveraged buyouts and slick presentations are not the answer. Engineering talent and forward thinking investment in a company remain the true solutions, no matter the country in question.