Kaesong factory recognized for quality

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-30-1

North Korean laborers in the Kaesong Industrial Complex are gaining attention as they are awarded with the government’s certificate of high quality, a certification difficult for even South Korean companies to earn. It is very rare for the North Koreans to earn in only about one year what it takes South Korean small and mid-sized businesses 2~3 years to get.

On September 25, the Korea Chamber of Commerce and Industry presented the food container-producing Sungrim factory, located in the KIC, with the Chamber’s ‘Single PPM Quality Certification’. This certification is awarded to the company that, during the last six months, have found less than 10 out of 1,000,000 products (0.001%, 10PPM) to be defective. To date, only 1,664 factories throughout Korea have earned the certificate, and this is the first time it has been awarded to a factory in the Kaesong Industrial Complex.

The Sungrim factory launched a ‘Single PPM’ project to boost the quality of its output in July of last year, and received the Korea Chamber of Commerce and Industry’s award just 14 months later. The KIC Sungrim factory was opened in April 2008, and manufactures food container lids for the CJ Corporation. It employs 88 North Korean workers and 3 South Korean supervisors.

When the factory first opened, the skill level of the workers was considerably lower than counterparts elsewhere, and this was reflected in the dissatisfaction of customers and large number of defective products. It appeared that workers were indoctrinated with the North Korean system of equality, in which production numbers were less important than providing meals, exercise facilities, and other benefits. However, as the workers became more loyal to the company, their efficiency improved as well, and employees even began repairing their own equipment in the event of a failure. The CJ management recognized this, and allowed the North Korean laborers to improve at their own pace, sparing no expense to support their efforts.

The result was that the factory which had produced as many as 650 defective goods per month at the beginning was able to reduce the number of maligned goods to 15 within a year, and eventually down to 1.8 PPM. This placed the factory more than 17 times higher than the 31.3 PPM average for the 111 companies receiving one of Korcham’s three certificates (Single PPM, 100 PPM, and 1000 PPM).


2 Responses to “Kaesong factory recognized for quality”

  1. Gag Halfrunt says:

    I find it hard to believe that North Korean workers are “indoctrinated” to believe that production numbers are not important. The DPRK is a command economy with central planning. Surely satisfying production quotas is considered as the top priority and, given the shortages of electricity and generally decrepid nature of North Korean industry, there probably aren’t many factories where workers can fulfil the quota and then slack off for the rest of the week (or month or whatever).

  2. NKeconWatch says:

    I agree. If anything communist production is focused on meeting production quotas even if the actual quality is so bad that the produce cannot be used!