How better communications helps heavy industry

One of the bias' out there is that heavy industries - such as shipbuilding - are the dinosaurs of the information age. They could not possibly be cutting edge on work processes or technology or any other intangible asset. But here is an interesting story in the Wall Street Journal on how one company is using its communications infrastructure (an intangible asset) to be more productive (High-Speed Wireless Transforms a Shipyard):

The challenge [of efficiency] is magnified at Hyundai Heavy, where more than 8,000 workers build as many as 30 ships at a time, using millions of parts as small as rivets and as large as five-story buildings. The shipyard sprawls over 4.2 square miles and includes nine drydocks, the biggest of which is longer than seven football fields.

But over the past few months, Hyundai Heavy deployed a high-speed wireless network across the yard, one of the first such installations in an industrial setting anywhere in the world. Data zips around the complex at four megabits per second, about four times as fast as on a cable modem that is common in U.S. homes.

Now, the company can use radio sensors to track the movements of parts as they go from fabrication shop to the side of a drydock and onto a ship under construction. Workers on a vessel can also access plans via notebook computers or handheld phones and hold two-way video conversations with ship designers in the office more than a mile away.

. . .

In large part, the new technology is designed to help Hyundai Heavy reduce expenses and streamline production. Mr. Hwang [Hyundai Heavy CIO] says the company estimates it will save around $40 million annually in reduced labor costs and improved efficiency.

. . .

As part of the network, Hyundai Heavy this month began testing a communications link with workers who are inside a vessel that is below ground or sea level. Previously, workers with a problem inside a ship had to climb up topside to talk to someone by phone or walkie-talkie.

To change this, the company connected its new wireless network to the electric lines in the ship, which then convey the digital data to Wi-Fi transmitters placed around the hull during construction. The Wi-Fi system can then reach PCs, independent Web cams and Internet-based phones used by workers.

Now, workers inside a ship under construction simply use Skype numbers to call their colleagues on the surface. Designers in an office building a mile or so away, meanwhile, can take control of Web cams to look in on problems.

Intangible are just as important in heavy industries as anywhere else in the economy -- and are the key to making these sectors more productive. That is a lesson we need to continually keep in mind.