The manufacturing paradigm that has supported Korea's economy is shaking from its foundation. Mired in low growth, Korea's manufacturing faces a compound crisis from China's fierce pursuit and a realignment of global supply chains. In particular, small and medium-sized manufacturing sites—the capillaries of industry and the roots of supply chains—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 aging factories and restart the growth engine of Korea's economy. ChosunBiz takes a close look at why small and medium-sized manufacturers on the edge of a cliff must stake everything on AX, and the new growth map that Korea's manufacturing should pursue. [Editor's note]
On the 29th in Songjeong-dong, Gangseo District, Busan, at the Donga Plating plating factory. Inside the plant, baskets filled with millions of finger-joint-sized bolts were moving nonstop along rails. One basket of bolts weighs about 50㎏. From incoming inspection to cutting fluid removal, electrolytic degreasing, zinc plating, rinsing, film treatment, drying and final inspection, there are about 20 steps before finished goods come out.
As recently as 10 years ago, workers carried these heavy baskets at each step and fed bolts into plating and other equipment by hand. People were packed along every step, and nearly 10 workers were needed for a single line.
Now, however, an automation system moves the baskets and consolidates the steps. One or two managers control the entire line. When the process was manual, this plant produced 7 to 10 tons a day, but it now handles about 45 tons a day.
Lee O-seon, head of Donga Plating, said, "Plating and surface treatment are back-end steps that are not easily visible, but they are the basic strength of manufacturing that determines the lifespan and safety of cars and machinery," adding, "Korea's manufacturing can become stronger only if this root industry undergoes a digital transformation."
◇Plating plants also go by system: digital transformation of root industries
Donga Plating is a small and medium-sized company that surface-treats bolts and nuts used in automobile seat belts, seats and more with zinc plating. It supplies products to global automakers such as Hyundai Motor, Kia, Volkswagen and Volvo. Sales in 2024 were about 6 billion won.
Plating is an essential process that prevents corrosion of metal parts and improves durability, but it has long been trapped in the perception of a dirty, difficult and dangerous, or 3D, industry. It has been seen as labor-intensive with poor working conditions, making it shunned by younger workers. Donga Plating is breaking through these limits with technology and systems, leading change in the plating sector.
Lee's starting point was far from manufacturing. A former sales team head at an insurance company, Lee went in to sort out Donga Plating, a small plating company on the brink of bankruptcy in 1997, and ended up acquiring it.
He said he "started without even knowing what plating was," and had to worry about survival amid distrust from shop-floor workers. He arrived first every dawn and worked alongside employees, learning plating steps one by one.
The decisive turning point that changed the company's growth trajectory was automation. Lee said, "The reason the plating industry can't help but stay small is that it relies on technicians' experience and intuition," adding, "I decided to replace a setup where quality wavers when people change with a system."
Donga Plating first introduced an automated plating line in 2010 and built office and management systems in 2016. Starting in 2018, it joined the large-small win-win smart factory program led by the Ministry of SMEs and Startups and Samsung Electronics, embarking on an enterprise-wide digital transformation. Productivity rose 37%, the defect rate fell 77% and manufacturing lead time decreased 25%. Now at smart factory advancement level 3.0, its process automation rate has reached about 90%.
Donga Plating's Busan plating plant drew attention in 2022 when Samsung Electronics Chairman Lee Jae-yong visited in person to check smart factory operations. The plant is cited as a leading case of smart factory adoption in the plating sector, which has been regarded as a 3D industry.
◇After the smart factory, AX: expanding to energy and environment
Donga Plating's next goals are ESG (environmental, social and governance) and AI (artificial intelligence). Lee said, "We are developing and reviewing eco-friendly plating processes that can reduce carbon emissions," adding, "Through AI-based unmanned lines, we will secure both energy efficiency and environmental performance."
Lee also emphasized responsibility to the region and its talent. "It is important to create an environment where young talent in Busan can work in local industries without moving to the capital area," Lee said. "If digital and AI technologies are applied to root industries, young talent will come, and corporations and the region can grow together." In fact, the average age of Donga Plating's 28 employees is 36, and those in their 20s and 30s make up 72%.
Lee currently serves as chair of the Busan Clean Surface Treatment Cooperative and vice chair of the Busan Chamber of Commerce and Industry. "Only by accumulating changes on small and medium-sized manufacturers' shop floors can Korea's manufacturing competitiveness be maintained," Lee emphasized. "I want to show how a plant once labeled a 3D industry can become a field that is chosen again."