January 03, 1998 in Social Responsibility News

SAMSUNG Heavy Industries Introduces an Innovative Production System to Improve Efficiency at its Construction Equipment Plant

SEOUL, Korea - January 3, 1998 - Samsung Heavy Industries has developed SNPS (Samsung New Production System), a revolutionary approach to production that is being installed at the company's Changwon Plant 2 in Korea, making it the world's most efficient heavy equipment manufacturing facility. SNPS, which required a year of research to complete, is a mixed flow method that is more efficient that the conventional JIT or the signboard method used by some Japanese competitors.
The flexibility of SNPS makes it possible to include various options required by individual customers during initial production. Other mixed flow systems are only capable of handling two or three different models on a single line. The Samsung system, by contrast, is computer controlled and can simultaneously assemble all 11 of Samsung's excavator models on the same production line. Therefore, with a 10 billion won investment, Samsung can retool all existing production lines to handle the company's main products.

The painting process and other bottlenecks will be improved, while sub-processes will be specialized and material flow will be upgraded. Meanwhile, the floor layout is being re-designed to raise workers' productivity. Walkways are being widened for better safety; pollution control systems are being improved and the atmosphere in the welding shop is being better managed. An all-weather shop is also being built to ensure top product quality.

SNPS is now in test operation and will be in full operation by the end of the year. At that time, the plant output will be doubled from 16,000 units to 32,000 units a year, while productivity will be raised 50%. Production lead time will be reduced 40%, from the current 10 days to just 6 days. The distance forklift trucks must travel inside the plant will be cut in half, and the time required to bring materials into the warehouse will also be lowered.

The commercial vehicle production line at Changwon has been moved to the Sungsuh Industrial Complex, at Taegu. Samsung plans to utilize the vacated space to expand its heavy equipment production lines. As a result, Changwon Plant 2 will emerge as a facility where full range of products is made with the world's most efficient production system.

SHI's goal is to become the world's fifth-largest construction equipment manufacturer by early in the next century. Therefore, the company has been researching new concept production systems to more capably respond to the rapidly changing world market. SHI underwent a massive restructuring in 1996, reducing its heavy equipment lineup from a total of eighty models in ten categories to just fifty-five models in five categories. The company continues to strengthen international competitiveness through ongoing product specialization and quality upgrades.

In 1996, annual sales by SHI's Construction Equipment Division was 700 billion won, but by the year 2000 that figure is expected to reach 1.2 trillion won. Currently 30% of SHI's total construction equipment output is sold overseas, but Samsung aims to increase it to 50%. Therefore, new plants are schemed to be built in the US, China, and Eastern Europe. At the same time, Samsung plans to invest 50 billion won by the end of 1998 to establish research centers in Japan, the UK and the US.

For further information on Samsung Heavy Industries, please access http://www.shi.samsung.co.kr


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