1. e-Manufacturing in Automotive Industry

2. Contents Trends and Challenges of Auto Industry e-Manufacturing in Auto Industry e-Manufacturing for New Car Launch at H&K e-Manufacturing for Production at H&K

3. 1-1 Auto Industry Trends Global Business Over supply Reduced profit margin (3%) Relentless cost reduction drive Customer Power Outsourcing of non-CC areas Go abroad with local suppliers Module-based mfg Partnership collaboration Key trends of auto industry are global business, increased customer power, severe global competition due to oversupply, and increased out-sourcing (parts modules) through strategic alliance with suppliers. Growth of new markets Regional FTA of existing markets Global customer service Severe Global Competition Ease of information access Personalized needs (BTO) Short OTD time : 5 Day Car Strategic Supplier alliance 1. Trends and Challenges of Auto Industry

4. Severe Global Competition Growth of BRICs Low growth of world auto market (2~3% growth rate expected) Large oversupply (about 25 million cars in 2003) - Prod. capacity: 81 M cars, Market demand: 56 M cars China: Its market size reaches to the north American market size - 4 th Car-making country in 2003, 8 million cars prod./sales in 2008 India: Over 1 million passenger cars in 2003 Brazil, Russia: Steady & rapid increase - 2003: Brazil(1.67M prod./1.32M sales), Russia(1.26M prod./1.35M sales) Development Race for Future Cars Paradigm changes in auto industry to meet Environment Protection Oil Depletion, and increased Customer Expectations Core high-tech is essential for global competition and survival - Fuel cell, Hybrid, Intelligent electronics, Low pollution engine, Telematics, etc. 1-2 Changes in Auto Market (Global War) 1. Trends and Challenges of Auto Industry

5. Securing & Relocation of Global Production Capability Maintain & increase of global market share Market share increase & brand building in under developed countries Huge Fund & Technology Investment for Capturing Future Market Eco-Engine, Next generation power train Common Platform Increased use of standardized Units & Parts Realization of economy of scale Securing of Profitability in the increased Small Car Market Relocation of global production capability 1. Trends and Challenges of Auto Industry 1-3 Challenges of Global Auto-Makers

6. 2. e-Manufacturing in Auto Industry Customer Support (B2C) Supplier Management (B2B) Life-cycle mgt Customer/market needs analysis Suppliers Chain Sales force automation Supplier Collaboration (D&D) Used car auction Global communication & network revolution Service parts order/supply Telematics A/S Real-time optimization of supply/demands Global sourcing/ logistics CRM/SCM PLM/ERP/ME S Web-based car orders 2-1 e-Manufacturing Image for Value Chain Management

7. Integration of Web & IT e-Business Service Web Service Strategy Management Knowledge & Quality Mgt SCM (Supply Chain) CRM (Demand Chain) PLM ERP MES Customer B2C B2B 2. e-Manufacturing in Auto Industry 2-2 Information System Model for e-Manufacturing Supplier

8. Where will we make this product? How do we make this? What will it cost to make this? How soon can we make this? How fast can we make these? What factory changes are required? What tooling is required? Do we make or buy? What if I change the design? 2. e-Manufacturing in Auto Industry Concept Development Product Design Production Suppliers Manufacturing Engineering 2-3 Manufacturing Planning Questions for NCL (New Car Launch)

9. Production TQC Innovation via MIS (Manufacturing Information) System Innovation Production Process Mgt Customer Satisfaction Demand Forecasting Part Supply Shortage 20% 37% 9% 25% 38% 9% Information Sharing No reply Forrest Research Report (2001) Difficulties in Managing Mfg Enterprise - Survey of CIO/CEO of Top Mfg Companies in US Sales-Prod. Inf. Sharing Intel. Mgt of Process Status Inf. Standardized Prod. Process Sys. Flexible Systems Integrated Mgt of Multi-plants Real-time Inf. Processing MIS Innovation 2. e-Manufacturing in Auto Industry Time-to-market (NCL LT) Reduction via Digital Engineering Innovation 5040302010 Time-to- Market (Months) Generation 48M ~ 36M (Traditional ) 2 36M ~ 24M (Engineering Improvement) 3 24M ~ 12M (Engineering Innovation ) Current Level 24 1 2-4 e-Manufacturing Innovation Requirements

10. Digital Innovation of NCL ( + ) Processes via PLM Goal: Development Lead-Time/Cost Reduction, Design Quality Assurance, etc. Forming Eval. (Die Req.) Assembly Eval. (Equip. Req.) Ergonomics Eval. (Work Req. ) VIRTUAL MANUFACTURING Digital Preparation for NCL Styling (Digital Eval.) Market Value (Digital Eval.) Performance (CAE) VIRTUAL ENGINEERING Mass Production Virtual Prototype Car 3. e-Manufacturing for New Car Launch at H&K 3-1 e-Manufacturing Image for New Car Launch (NCL) Process

11. Processes & Systems Int. DMU Mfg Eng. (DMES) R&D ….…....….... BOM PDM Prod. Structure - Prod. Inf. - Tech. Data - / - Project Mgt - / Workflow Mgt - 3. e-Manufacturing for New Car Launch at H&K 3-2 Digital Process Support Systems for NCD ( ) NCL = NCD + Mfg Eng

12. Process-oriented System Integration Realization of Digital Inf. Mgt System Long-term Strategic Planning & Step-by-step Implementation. Robot Simulation Off Line Programming CAPE e-DM/KM DMES 1990sEarly 2000s Application Oriented System Development Process Oriented System Development Isolated Point Solutions Non-integrated Systems Isolated Control Without Strategic Planning Late 2000s CAPE: Computer aided production engineering; e-DM/KM: Enterprise Digital Manufacturing/Knowledge Management DMES : Digital Manufacturing Engineering System 3. e-Manufacturing for New Car Launch at H&K 3-3 History of Mfg Eng Digitalization ( )

13. 3. e-Manufacturing for New Car Launch at H&K 3-4 Image of DMES (Digital Mfg Eng System: )

14. Availability/ Stability Scalability/ Portability Ease of Use Build G-MES Based on Std. Infra Architecture Global Top Global Competitiveness Equip. Status Production Order Provide Human & Equip. with Right Information at Right Time Real-time Monitoring of Line Equip Status Real-time Reporting of Analysis Information on Abnormal Events Std. Global MES that is MES Rapid/FlexibleDeploymentRapid/FlexibleDeployment Increased A/S Efficiency,,,, (Maintenance free, Easy, Strong) 4. e-Manufacturing for Production at H&K 4-1 Image of Standard G-MES (Global Mfg Execution System)

15. Std G-MES of H&K G-MES Integration/ Standardization G-MES Integration/ Standardization ALC FA DB Legacy / ERP DB PressBodyPaintAssyEngine ERP DB MES DB Korea / HMMAKMS ALC (Assembly Line Control : ), MES (Manufacturing Execution System: ) India Beijing Yumsung Turkey Global Standardization/Integration/Advancement of Inf. Systems in Production Plants Start-up Implementation at KIA Slovakia Plant (KMS), and Dissemination to Other Overseas Plants 4. e-Manufacturing for Production at H&K 4-2 Std G-MES Deployment Plan

16. 4. e-Manufacturing for Production at H&K 4-3 Mid/Long Term Vision of Std G-MES