[Win-Win Cooperation] Daehan Flexible: Competing in Domestic Manufacturing via Smart Factory

Money Today Win-Win Cooperation Team Editor Song Ki-woo | Input: 2017.09.29 15:46

Editor's Note

※ Money Today, in collaboration with the Samsung Electronics Win-Win Cooperation Center, conducts a year-round win-win special project aimed at expanding sales channels for technologically advanced global small giants. This project disseminates and distributes the services, products, and corporate stories of next-generation growth engine companies to the world in three languages ​​(Korean, English, and Chinese). It is sponsored by the Korea Commission for Shared Growth.

“A country without domestic manufacturing bases is doomed to fail. While many companies are relocating their production facilities to Southeast Asia in search of low labor costs, we will transform into a smart factory in preparation for the Fourth Industrial Revolution and compete in the domestic manufacturing sector.” Daehan Flexible President Yoon Sung-hwan / Photo by Editor Song Ki-woo

In a recent interview with Money Today, Daehan Flexible President Yoon Sung-hwan stated, “Transforming into a smart factory allows us to achieve both informatization and automation simultaneously, enabling us to reduce costs and respond quickly to customer requirements.”

Daehan Flexible was founded by Chairman Yoon Jung-woong, who established the company after anticipating during a business trip to Germany that the need for HVAC hoses would become critical as the Korean economy developed and buildings grew larger. Since launching Korea’s first fiberglass flexible hose in 1982, the company has continued to grow while maintaining its leading position in the industry. The company currently holds 15 patents and has obtained numerous certifications and accolades, including MainBiz (Management Innovation SME), InnoBiz (Technology Innovation SME), UL (U.S. Safety Standard), ISO 9001 (Quality Management System), ISO 14001 (Environmental Management System), Gyeonggi-do Promising SME, the Minister of Labor Award, and the Korea Invention Patent Exhibition.

CEO Yoon Seong-hwan stated, "When I joined the company after working for a foreign firm, my first goal was to obtain the 'Promising SME' certification, but I failed. One of the reasons for my rejection was the lack of patents." He continued, "Since then, I have spent seven years striving to obtain objective certifications through external agencies. I believe that our 35 years of business history and proprietary technological capabilities made it possible to acquire these patents and certifications." He added, "In particular, being selected for the Gyeonggi-Texas State University Enterprise Support Program, establishing a business plan for the U.S. market, and exporting after being introduced to a local business partner was a significant achievement."

"The U.S. exports products, but China operates differently," said CEO Yoon. "We exported products to China a few times, but they were immediately copied. That is why we are exporting flexible hose machines and providing consulting on quality maintenance and production technology. We also establish Chinese companies as subsidiaries to act as importers for Korea if the products are good," he added. He also expressed confidence in the new machinery business, stating, "Some people complain, asking how we will make a living if we teach them all the technology. However, once we sell a machine, they have no choice but to rely on us during the maintenance period. If we attach sensors to the machines we sold and automate them, they will place orders again."

CEO Yoon Seong-hwan explaining the product / Photo by Editor Song Ki-woo

He is also dedicated to incorporating customer health into his products. Since ventilation ducts are installed in dark and humid ceilings, they accumulate dust, insect carcasses, and bacteria. We breathe the air that passes through these pipes; with the concept of breathing clean air, he developed the 'Antibacterial Flexible Duct (D-500BT),' which adds antibacterial functions to aluminum. This product, patented for its antibacterial flexible hose fabric and manufacturing method, is currently being supplied to hospitals, pharmaceutical companies, electronics firms, and major construction companies that are sensitive to bacteria.

When asked about the loud machinery noise heard during the interview, he explained, "We are currently constructing a new factory to transition into a smart factory." He added, "Since the flexible hose industry is largely small-scale, production and office work are often done manually. This lack of communication has led to frequent problems caused by data errors. We are converting to a smart factory to resolve these issues."

He further explained, "We are currently in the first phase of informatization. We plan to complete the computerization of the entire process from ordering to shipment by November. Afterward, we will proceed through the second and third phases, ultimately aiming for machines to automatically test for product defects and even check the manufacturing equipment themselves." If the production facilities of small and medium-sized enterprises become smart and automated in this way, there will be no need to relocate factories overseas due to labor costs, and the domestic manufacturing industry can anticipate new growth opportunities.