KL-Net CEO Jung You Sub

1. The Way to vitalize GSC through IT KL-Net CEO Jung You Sub www.klnet.co.kr

2. Contents Status and Problem Analysis Solving Method Action Plan Future Plan 1. 2. 3. 4.

3. Status and Problem Analysis

4. Global Logistics Supply Chain

5. Background International Logistics Environment Changing  The expansion of Economic scale and the appearance of Multinational corporation  Demand high-quality logistics service GSC (Global Supply Chain)

6. International/Domestic Standard for Korean Logistics Information Spread Logistics Information Linking and Standardization Reflects international/domestic logistics changing environment Constructs a Standard Plan for Logistics Information` Environment Changing Technical Changing • Logistics Systemized Project under government leading in Korea • Needs National Logistics Standard because of Heterogeneous system or data • Increase a Association Needs between business entities • Needs High-Quality Logistics Service • Request to integrate with u-Business service

7. Logistics Environment Changing •  Diversification on Strategic goal • - Simply inventory control  flexibility, green, customer orientation etc. •  Flexibility : establishment of risk supply chain management (NOKIA) • - Fire in New Mexico  prompt product supply from overseas factories • ->Increase Worldwide market share 27% to 30% •  Green : Reverse SCM (HP) • - recall & re-producing center • - Generate additional profit from resale a reproduced products •  Customer orientation : Need (McDonald) • - moving toward to customer oriented from product • - Mc cafe is not only low price policy but also quality for customer’s • preference

8. Barrier Factors to Implementation •  Structured problems • - Complicated network structure : coexist with existing system, EDI, • telephone, email and etc. • - Difficulty on interconnection among systems • Severance & Security problems - Severance and information gap on cargo movement and tracking - Unpredictabledelay and recovery on supply chain • - Insufficient on visibility and security •  Resource management problems • - Resource waste : unpredictable activities such as additional charge • and request on express delivering order

9. Critical Issue • Working process - overuse on paper and overtime from manual working process - Human intervention on information sharing during interoperation among public sector • Technology - different types of data and data transfer protocol (Enable to interconnect) - Coexist with difference data information system - Lack of verification of meaning on biz process and data contents • Standardization - unableto correspondence with global standard

10. Solving Method

11. Resolving Method •  Standardization on DATA • - Data sharing and utilizing by using common use forms • - Standard Data & Code, global mutual-application •  Visibility on Logistics Flow • - Real-time data integration based on u-IT • - Reduce logistic cost from capturing data with seamless logistics flow • Enhancement on Security - Prompt and safe cargo movement to meet with the standard security requirement

12. Resolving Method • System Integration => Single Window • Information (data, code) Standardization=> UN/CEFACT • Reducing paper forms => Electronic Message • Real-time based cargo and vehicles tracking system • => u-IT (RFID, GPS) • Security Enhancement => AEO, C-TPAT, e-Seal…

13. Strategic Set up National Logistics and ITS Derive u-IT expansion project Bio and logistics activities Strengthen Land transport volume increasing Strengthen security for Logistics Using RFID for flow tracking Apply USA container security management e-SEAL Promote Pan-European policy investment in equipment for government financed Accumulate RFID Construction knowledge No-connecting of logistics flow Lack of inland information plan Activate Maritime Information Infra High IT maturity and infra construction capability Exists various organization and system Vitalization of Logistics Informationization Information and System standardization Ensure Visibility Integration with u-IT Closely linking with Sea, Air and Railroad network

14. Final Goal of GSC • Realization of Logistics-oriented nation • Enhance global logistics competitiveness Logistics information system improvement Information linking and sharing in common Seamless the advanced logistics policy setup User-oriented single entry construction Informationization of logistics

15. Action Plan

16. Action Plan • Logistics Information System Integration • -> Single Window • e-Document Standardization: XML • International Cooperation • -> Business process standardization, • -> Collaboration model setup

17. Logistics Information System ? This system supports logistics management to be closely associated with information which is related to transportation, shipping and discharging, keeping, packaging, etc. for goods moving.

18. User VAN Internet Declaration XML EDI Approval Single Window A single point for the one-time submission of all required information and documentation to all governmental agencies involved in export, import or transit procedures Administration Single Window Shipper MLTM Secured Authentication (EAM) Forwarder EDI System KCS ICD MOJ Dang.er. Goods Inspection WEB Service Portal Carrier User Authentication/ Authorization National Quarantine Station User Info. Shipping Company XML/EDI Terminal/ Pier/Airport KORAIL

19. Standardization by KL-Net Domestic Standard Activity International Standard Activity • International Standardization: UN/CEFACT • Asia Standardization : AFACT • IMO FAL : (Single Window, UNeDocs) • Consulting Service • - Technical Inspection for Dominican Republic • DGA (Direction General De Aduanas) • Computerization Project • - Technical Inspection of Republic of Guatemala • ministry of Education Educative Informatics • Highway Project - Feasibility study at Tanzania, Guatemala, Dominica - Single window training program for IMO , member states • KEC (Korea E-Document Standard Committee) by NIPA (MKE) • ISO TC 154, ISO/JTC SC34 by KSA • TAG(Technical Assessment Group) by NIPA • Working Group by KIEC • - e-Document : XML Library, • Business Information • - Code, Business Process • - Standard Tax Invoice, guideline - Standard C/O, guideline

20. e-Document Standard- XML XML A singledata modelling approach for: • Data exchanging standard instead of paper document • Government driven applying for work efficiency • Structured e-document : UNEDIFACT, Cargoimp, VDA, XML etc. • WEBService

21. Collaboration model Setup • Meeting of Korea, China and Japan minister of logistics : Logistics information standardization, Cargo tracking resolution • Collaboration Mode between Korea, China and Japan : NEAL-NET • International R&D Program for co-work • Define collaboration business model discussed with UN/CEFACT, AFACT, IMO member states, propose as international standard

22. Future Plan

23. The competition of maritime industry is deepening Maritime transport volume increasing Green Logistics Strengthen Security Logistics Environment Perspective • Asia-Europe course : annually 7.3% growth until 2010 (2010: 2.6 Million TEU) • Reduce CO2 from vessel according to IMO convention • Modal Shift • Introduce Automated loading/unloading equipment • Expand alliance between shipping companies • Port investment of global company • Shipping conference Revocation • Prevent terrorism against vessel and port facilities • Maritime accident prevention and safety of life at sea • Far east-North America : annually 5.7% growth until 2010(2010: 2.1 million TEU)

24. Future Logistics System • Intelligent & Sensible LogisticsSystem • - Use Sensing, GPS and Image Processing technology • - Enhance validation functionality •  Must support global supply chain’s visibility for inter-continental business • - Use Standard document and exchange protocol • - provide interoperability

25. The expected Effects • Information searching service improvement: 26.4 billion Korean won - Enhance work efficiency with information searching service improvement ▷ Estimate 300,000 by annual average searching count ▷ Searching time reduction(10 minutes) per one B/L(or container number) × 300,000× the average wage per time (8,800 Korean won) = 26,400,000,000(26.4 Billion) Korean won • Information searching method improvement : 13.2 billion Korean won - Enhance work efficiency with information searching method improvement ▷ Estimate 300,000 by annual average searching count ▷ Visiting times reduction(5 times) per one B/L(or container number) × 300,000× the average wage per time (8,800 Korean won) = 13,200,000,000(13.2 billion) Korean won • Green logistics realization - Resource reduction through paperless, Easy management of waste and repossessed goods through visibility ensuring - Easy transportation management (Oil prices reduction through lower emissions)

26. Future Goal U-Logistics for seamless Logistics VISION Standard, Visibility, Information Linking Goal Association Efficiency Simplified • Collaboration Process • Link with each Country • Provide user-friendly • requirements GoalⅡ • Re-Define Business Process • Define Common Elements • Define the related Entities • Analyze delay reason • Analyze disruption reason • Extract resolving Method Standard Methodology Standrad Protocol Logistics Lead Time Initiatives Define Logistics Business Model and International standard based IT system Changing Factor (Market/Data/Economy) Changing Factor (Policy/Social/International) Environment • ApplyNew Technology • => (RFID, Mobile, Ubiquitous) • Strengthen the competitiveness • Increase without border and paperless • trade • Logistics environment and Trend Changing • Logistics Business viewpoint changing • due to FTA • Logistics Process Improvement through • Standardizaton

27. Thank you very much !