Hak Hee HanCEO of Datec.Korea

Global Supply Chain Visibilityfor Trading Company

2009. 9

Increasing Global TradeIncreasing Global Trade

Million USD

Year

Increasing Global Trade VolumeIncreasing Global Trade Volume

Survival Strategies: BusinessSurvival Strategies: Business

• Globalization is happening…– “In this age of globalization, you have to accept that only

profitable and competitive companies survive” (Quote from late President Kim Dae

Jung)

– Samsung Group 80% of revenue and 95% of profits are from outside of Korea

• Successful Businesses Characteristics– Globally Competitive

• Technology innovation• World class quality• Total Cost• Agile, able to respond with speed

– e-Business Capable• Connected to global supply chain• Able to do business “virtually” across international

borders– Redefine your “business boundaries”

• Think beyond the confines of your business – “Reinvent” -> Apple• Add VALUE to the chain• Collaboration seems to be the way to go

Year

2nd Quarter

Change of Market Share in Mobile PhoneChange of Market Share in Mobile Phone

• Speedy response to Customers requirements– One is either Quick or Dead !!

• Get linked to “Global business highway” – the Internet– Or risk being left behind…

• Enables direct business to business collaboration, real time…

Why e-Business?Why e-Business?

Strong Demands for New Communication Method for the B2C, B2B and B2G

ProductionProduction ProcurementProcurementSalesSalesCRM

ERP IntegrationERP IntegrationSCM

AccountingAccounting

BankingBankingTransporTransportationtation InsuranceInsurance AgentAgent

CollaborationCollaboration

BuyerBuyer BuyerBuyer ManufacturerManufacturerManufactureManufacture

CollaborationCollaboration CollaborationCollaboration

FactoryFactory

AgentAgent

ManufacturerManufacturer

FactoryFactory

BuyerBuyer

ManufacturerManufacturer

GlobalizatioGlobalizationn

GlobalizatioGlobalizationn

Changes in the way of Doing BusinessChanges in the way of Doing BusinessChanges in the way of Doing BusinessChanges in the way of Doing Business

Global BuyersEg. Intel

1st Tier SuppliersEg. Globetronics

2nd TierSuppliers

Vertical Integration of local suppliers

Horizontal Integration with other businesses and public services into the GSC

Govt. AgenciesService Providers

Integrated Network to e-Enable Integrated Network to e-Enable ManufacturingManufacturing

Government

Centralize Compliance Data

Reduce Process Cost

Schedule Carrier

Compute Accurate Landed Cost

Other

Real Time Visibility

Book Electronically

Couldn’t Help

Don’t Know

8

36%

39%

25%

22%

19%

14%

8%

8%

6%

14%

8%

Notify of Exceptions

○ High priority logistics IT tasks selected by multinational companies

Logistics IT TasksLogistics IT TasksLogistics IT TasksLogistics IT Tasks

Trade Visibility ServiceTrade Visibility Service Trade Visibility ServiceTrade Visibility Service

PO

Changes

Orders

Ship Notice

Invoices

OrderAcceptance

RemittanceAdvice

Proof of delivery

Definition) Between Factory Sales Office or Sales Office Customer, from order to payment, participants can manage all the Trade Document and cargo movement to enable Visibility on Supply Chain

- 10 -

DepartureDepartureDepartureDeparture DestinationDestinationDestinationDestination

1 2 3 4 5

Q. Where is the cargo? - Tracking : at position “3”

- Tracing : at position “3” through “1” and “2”

- Visibility : at position “3” through “1” and “2”, and it will reach at position “4” and “5” at 2009.10.24

2009. 10. 062009. 10. 072009. 10. 212009. 10. 222009. 10. 24

2009. 10. 252009. 10. 04

Tracking < Tracing < Visibility

▼

1. [Present] Tracking : Point2. [Past] Tracing : Point + History3. [Future] Visibility : Point + History + Forecast + MBO

1. [Present] Tracking : Point2. [Past] Tracing : Point + History3. [Future] Visibility : Point + History + Forecast + MBO

Visibility ConceptVisibility ConceptVisibility ConceptVisibility Concept

Traditional Cargo Tracking System(Track and Trace)

• Track: current status of cargo

• Trace: History of cargo status

• Manual search of cargo track & trace

• Inaccuracy of tracking information(no verification tool)

• Late recognition of accident or delay (no pre-alert)

• Cargo tracking service by logistics company

Logistics Visibility System

• Pre-define the cargo path and target date for each point

• Verification of Cargo Status information

• Forecasting the exception and cope with the cases

• Various tracking method(by region, customer, P/O, B/L etc)

• Logistics process reengineering through accumulated data

Track/Trace VS VisibilityTrack/Trace VS VisibilityTrack/Trace VS VisibilityTrack/Trace VS Visibility

Multiple logistics steps by multiple logistics service providers

Different time zone in one logistics process

5 – 20 steps in average

Over 8 hours in averageSource: AMR Research, 2009Global Trade Management Landscape

Supplier Supplier

SupplierSupplierGovernment related document

Complicated and various shipping documents

Various language, currencies, business environment and cultures

○ Most multinational companies have complicated global logistics network which is quite different with local transportation

○ While the business environment is changing rapidly by specialization, out-sourcing, transferring production base to overcome

Complicated Trade LogisticsComplicated Trade LogisticsComplicated Trade LogisticsComplicated Trade Logistics

Overseas Logistics

Local

TransportationExport Logistics

Distribution /End User

Final Product Factory

Korea

Factory

Warehouse

Warehouse

Courier

Forwarder

Information FlowInformation FlowInformation FlowInformation Flow

Information flow between Forwarder and Courier

ExportProcessing

OceanTransport

GroundTransport

DistributionCenter

ManufacturingProduction

PAA TradeDocuments

PAA TradeDocumentsManufacturing

Center

DistributionCenter

Trade Visibility ServiceTrade Visibility Service with PAAwith PAATrade Visibility ServiceTrade Visibility Service with PAAwith PAA

Cargo Status

Cargo Status

ImportProcessingOcean

Transport

PAA MemberPAA Member

• if the cargo does not arrive at some point on time, preset alert will be sent to related parties such as shipper, consignee and forwarder

Pipeline # : KORNY020308

08/082009

08/152009

08/152009

08/312009

09/022009

09/032009

09/052009

09/062009

09/072009

09/092009

Shipper A Consignee B

Alert & NotifyUpdated ETAUpdated ETA

Trade Visibility ServiceTrade Visibility ServiceTrade Visibility ServiceTrade Visibility Service

•털

Clearance

Real-time

Cargo Security

Air Freight Info

Air Freight Info

RFID based

Visibility

RFID based

Visibility

Port Data

Exchange

Port Data

Exchange

Integrated Supply Chain Management

Inter-government

Data Exchange

Inter-government

Data ExchangeStandards

Control

StandardsControl

GlobalSingle window

GlobalSingle window

통합위험관리시스템

통합위험관리시스템

Expedited

Target Monitoring

CleaClearancerance Logic.Logic.

TruckTruckinging

ManiManifestfest

DeparDepartureture

ManuManufacturefacture

ArriArrivalval

UnloaUnloadingding

TruckTruckinging

CaroCaroPickupPickup

DistriDistributebute

CleaClearancerance

ConContracttract

Manufacture Trucking Forwarder Terminal Shipping line/ Airline

Terminal Forwarder Trucking Importer

AEOAEO

Expedited

Information

Customs

Logistics

Cargo Information ManagementRFIDRFID RFIDRFID RFIDRFIDRFIDRFIDRFIDRFIDRFIDRFID

•Container Info• Real-time •Logistics Info

•Clearance data•Manifest Data

WCO AEOUN/

CEFACT

Standards

Trade

MarketingMarketing L/CL/C LogisticsLogistics PaymentPayment

•Trade Data

Formats

Standards

XML

EDI

Formats

Standards

XML

EDI

Trade Financing

E-LC

Logistics

Payment

E-BL service

Way to GoWay to Go

DataAccumulation

Thank You!

Nesara@korea.com