An Assessment of Smart Factories in Korea: An Exploratory Empirical Investigation

After the Industry 4.0 discussion in Germany in 2011, much attention has been paid to smart factory in Korea. Since 2014, smart factories have been established and expanded in Korea. However, about 80% of them were established at a low level. In this paper, we analyze smart factory statuses in detail through an empirical research on 113 manufacturing companies that have established smart factories in Korea. We build a framework based on the resource-based view (RBV) and IT value creation process and analyze the results of five constructs—manufacturing strategy, organization, system, process, and performance—using basic statistical methodologies to derive the current statuses of manufacturing companies that have established smart factories. Our results show that implementing advanced technologies such as AI technology that can implement semi-finished and finished product quality inspection, manufacturing process optimization and product demand forecast is a challenge, particularly for SMEs. We also find that securing and managing facility data is a difficult problem. In addition, while output and material management ranked high, the utilization of integration systems, which is important when building a smart factory, was found to be extremely low. Lastly, the performance indicator results showed that yield management and defect rate were most important, while job creation through the introduction of smart factories was low. Based on the results of this study, the government may be able to determine effective smart factory policies and provide manufacturing companies with a guide on establishing a smart factory.