The "manufacturing paradigm" that has supported Korea's economy is shaking from its foundation. Stuck in a low-growth rut, Korea's manufacturing sector faces a compound crisis of China's fierce chase and a global supply chain reshuffle. In particular, small and midsize manufacturing sites—the capillaries of industry and the roots of the supply chain—are groaning under a "triple burden" of labor shortages, rising costs, and stagnant productivity, and are being pushed to the brink. Now the only breakthrough for survival is "AX (AI transformation)." Artificial intelligence (AI) goes beyond a simple technology rollout; it is the last bastion that will breathe new life into outdated factories and restart the growth engine of Korea's economy. ChosunBiz takes a close look at why small and midsize manufacturers standing at the edge of a cliff must bet their survival on AX, and the "new growth map" that Korea's manufacturing industry should follow. [Editor's note]
At Prontec's Siheung plant, automotive nuts are produced nonstop. After steel is pressed and pounded hard into the desired shape by a forging machine, the surface oil is removed, and threads are cut to complete the nut shape. After inspection and packaging, they become finished goods. Blocks of steel weighing 300–400 kg must move according to each process, but hard and dangerous tasks are handled not by people, but by an automated logistics system. Prontec calls this production line a "micro factory."
On the 9th, Prontec CEO Min Su-hong said in an interview with ChosunBiz, "A micro factory can carry out operations in one go up to finished goods production."
Founded in 1978, Prontec produces automotive nuts and is cited as an exemplary case of digital transformation (DX). Prontec moved into DX around 2013–2014, when discussions of smart factories and the fourth industrial revolution were spreading.
Min said, "At first, we started with the idea of boosting our product competitiveness," adding, "We prepared for DX to stabilize quality and increase productivity, and we also used government support programs."
The organization reportedly stirred under the massive change. While management weighed ways to strengthen the company's competitiveness, the shop floor focused on whether the system change would make work easier—or harder. Some resistance to adopting automated systems was also detected. It was natural to face pushback when the new approach did not fit existing workflows.
Min noted, "We navigated the transition wisely through communication and job reassignment." He added, "The pace of adopting DX differed by age and skill level, and we adjusted roles accordingly," saying, "Younger employees are familiar with integrating new technologies, while seasoned employees have strengths in existing methods, so we pursued job transitions that fit their characteristics and preferences."
Prontec also introduced an MES (manufacturing execution system) and a monitoring system that watches, in real time, the forging force in the forging process. It established an environment to systematically manage production flow and respond immediately when anomalies occur. As a result, productivity rose by about 10% or more, and the defect rate fell by around 15%. A smart warehouse completed in 2019 also boosted logistics efficiency. By integrating automation equipment tailored to on-site conditions, about 70% of processes have been unmanned.
Min cited "basic technical capability" as the reason for DX's success. "It is difficult to generate results by simply overlaying digital tools on imprecise existing processes," he said. He continued, "This is why Prontec continues technical cooperation with Japanese parts and equipment companies," adding, "We learn their precision and maintenance technologies, and we share our experiences in digital transformation and intelligence. Real DX happens when digital is placed on top of processes with established basic technology."
Prontec is now weighing an AI transformation (AX). Min said, "DX was easy to grasp, but AX still doesn't feel tangible." He added, "AI needs to move to a stage where it analyzes process data to predict anomalies and even connects to control, but the risks are high if trial and error occurs," noting, "SMEs find it burdensome to form their own AI teams and inevitably have to rely on external firms, which is also a concern."
It is a cautious stage, but they have at least set a direction for applying AI. Currently, during the process, certain data such as motor temperature are monitored against reference values, and an alarm sounds when preset thresholds are exceeded.
Min explained, "Going forward, AI should evolve to a stage where it analyzes temperature change patterns and determines whether they are currently within an acceptable range or are signals that will soon lead to a problem," adding, "Where and how to apply AI is the biggest concern."
The final vision Min has for AX is remote operation of the micro factory. "Micro factories installed in various locations overseas and in Korea would be controlled from the Korean headquarters, and AI would determine die damage or replacement timing for remote control," he said, emphasizing, "The goal is for staff to operate and automate a micro factory on a U.S. site from headquarters."