LS Industrial Systems - "Leading innovation, creating tomorrow"
By Philippa Martin-King
Ja-Kyun Koo (right), President and Chief
Executive Officer of LS Industrial Systems
pictured here with Philippa Martin-King,
IEC Communications Officer
A short driving distance south from the sprawling capital of South Korea, Seoul, lies the industrial town of Anyang-si in Gyeonggi-do, home of LS Industrial Systems Co., Ltd. Today, some 2 000 engineers are employed in the R & D (Research and Development) building, which lies only 500 metres away from the new company Headquarters that opened in April 2008.
LS Industrial Systems was originally part of the well-known international corporation, LG, where it went by the name LG Industrial Systems. It separated from LG in 2003 to follow its own new and independent focus.
Today, LS Industrial Systems is part of the LS Group holding that also includes the fast-growing companies LS Cable, LS-Nikko Copper, LS Mtron, Gaon Cable, E1 and Yes'co. Together, they develop and manufacture industrial electrical and electronic equipment, automation and control solutions, power transmission and distribution equipment, copper tubes and pipes. Indeed, the affiliate company, LS Cable, responsible for the processed metals business with its optical and electronic circuitry, wiring and cabling production, is in need of additional space and about to move south from its present location in Anyang.
Ja-Kyun Koo is President and Chief Executive Officer of LS Industrial Systems. Koo has an unusual career path. After receiving a BA (Bachelor of Arts degree) in Law at Korea University, he went on to do an MA (Master of Arts degree) in International Management Studies at the University of Texas, Dallas and then specialized in Corporate Finance for his PhD (Doctor of Philisophy) in Business Administration at the University of Texas, Austin. He returned to Korea where he spent a period as a Professor of Business Administration at Kookmin University, Seoul before taking up the post of Associate Professor of Financial Management in the Graduate School of International Studies of Korea University.
Little surprise therefore that his style of management is also most unusual. He uses the motto of the three Ps: People, Product, Process where people play an important part in the daily life of the corporation and are encouraged and expected to participate in submitting ideas and taking decisions. The idea of training is also promoted internally and employees given support for continued education.
Jong-Woong Choe is Senior Executive Vice President and Chief Technical Officer of LS and a member of IEC SB (Sector Board) 1: Electricity transmission and distribution, the first Korean to be a part of such a group. Together, the two officers talk about the group's market growth and the factors that are important to meet their business strategy.
On standardization and the role it has played in corporate growth
In the LS group logo, the red arrow
represents the desire, using
challenging and progressive thinking,
to look to the future. At the same time,
it is a symbol of the LS vision as the
"world’s 'leading solutions' company".
The angular shape of the arrow
contrasts well with the soft curves
of the LS letters which strive to
accommodate for customer
satisfaction creating with their blue
colour a feeling of transparency
and reliability.
"If one works on the premise that today's business environment is changing from a state of mega-competition to one of hyper-competition where hyper can be thought of as 'frenetic' as opposed to the previous state of 'hugeness', then it follows that the company that is first to make a move is one that can survive", says Choe.
This is quickly followed by Koo who says "Our name suggests the essence of our strategy. LS stands for Leading Solution and it's already indicative of how we think of our business. LS strives to be ‘Always with our customers’, and that means ensuring that the products we produce are tailored to their needs. So, yes, standardization is important because it helps the network effect in using developed technologies as drivers to spread business through the market. You can have production technology that is top class, the best in the world, but it doesn't mean that we'll be able to market it throughout the world”.
Choe adds "Standards help us meet WTO (World Trade Organization) needs in overcoming TBT (Technical Barriers to Trade). We're able to participate in the global market by combining our standardized technology with an expanding open market that has a demand for what we have to offer.
"Standardization is also useful in providing us with cost and efficiency measures. Indeed, using common standardized components throughout helps us to control costs while raising productivity. At the same time, it reduces our indirect costs because we cut down on COPQ (Cost Of Poor Quality) on operations. So, it allows us to pursue business in a profitable manner because it removes the doubts and the risks involved with non-standardized components and products."
"That is not to say", remarks Koo, "we should simply follow existing standards. No, they're not always optimum. If you want to compare measurements in an aim to create something useful for your customer, it has to be in a positive direction.
"If you're familiar with the notion of Mean Standard Deviation, an average statistical measure of a spread or dispersion of numbers, you'll understand how it helps you compare random variables using comparable figures and therefore appreciate how it provides you with greater understanding of the difference between, for example, plus and minus one."
“The cost of certification to the world is tremendous.”
Ja-Kyun Koo
President and CEO of
LS Industrial Systems
Taking responsibility and creating new standards
He continues, "So, it is similar with standardization. You have to cut out the unnecessary. Sometimes that means taking on the responsibility to create new standards or working on acceptance of de facto standards to bring them into the approval process."
"Simplification, Specification, Standardization"
Koo adds "At LS we talk of the three ‘S’ activities in bringing our products to market and these are integrated in all our product development and processes. The three stages we follow are those of Simplification when we streamline to a maximum, Specification when we look at our customer needs, and Standardization.
"I see the process of standardization like this. First you have a de facto standard when you're in a ‘fighting’ stage with the competition. Then you start to exchange ideas and gradually you reach the final stage where you have gained opinion power. The cost of certification to the world is tremendous.
“Today, LS Industrial Systems has a large share of many business fields in Korea with, for instance, over a 60 % share of the low-voltage market. However, on a world market basis, that only represents 1.9 %. Similarly, we have over 40 % of the domestic automation business. But, in global terms that's only 1.6 % of the world market."
National standards of little use in a global market
"In Korean terms we're a leader in standardization. But to increase our worldwide market share this isn't sufficient. We can't think simply in national terms", continues Koo.
"Our government has already changed its policy and has adopted IEC International Standards on a national level as Korean standards. It makes no sense for LS to lead a Korean standardization policy, so we're working on an international level.
"Having a Korean representative on IEC SB 1 is one way of ensuring that we get visible results. There are many other activities we can be involved in, for example, working on de facto standards such as ZigBee or EPC (Electronic Product Code). Then there is communication technology. An example here would be a PLC (Programmable Logic Controller), those computers that are used, for example, in automation processes in factories."
Copper is a major component of electrical and electronic devices. How will this affect the future of electrical energy and the environment?
"We're conscious", states Choe, "that copper is most important for many of the products we manufacture. A bit like oil, the price of copper is rising rapidly. So, as a competition element in terms of costs, this can only take a change for the worse.
"There are many engineers working on research into new technologies to reduce the amount of copper used in products and find substitution materials or compound metals that use reduced amounts of copper. Other approaches include superconductors and wireless power transmission.
"In terms of the environment, there are problems linked to the manufacturing of products using copper and disposal after a device's useful life. All this bears a cost and it will take a long time to devise substitution technologies. Then, of course, we'll need new standards against which to measure the systems we develop."
Standardization in emerging technology
"We're developing a number of RFID (Radio Frequency Identification) applications. It's still very much an emerging technology as are the areas of application in tracking systems for people, animals and products", adds Choe.
"There is a certain amount of standardization work going on, whether in the IEC, IEEE or other groups. Much of the work is generated on the basis of de facto standard groups like, for example EPC global.
"Because there are no real standards, the RFID technology development time is slow and so we waste a lot of time and energy on trying approaches with different frequencies and readers and chips and so on. There's an urgent need for all sorts of standards in security and signal interference. And that's just for starters."
An example of an EMS (Energy Management System) together with its explanation in the LS
Design Centre |
Tag products & readers with explanation of RFID and RTLS
Wi-Fi-based system |
Testing of wafer design for new chip technology using low power and on-chip sensor |
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