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The Smart-Phone Revolution and the Competitiveness
of the Logistics Industry
Yeo Sung-koo, CEO of Pantos Logistics
In his book entitled Homo Nomad, L'homme nomade, the renowned French scholar Jacques Attali predicted a future era in which humans armed with digital gadgets would be able to work freely anywhere on the move, just like nomads in ancient times. Now, his prediction is about to become a reality, as we humans witness the emergence of new information technology that is evolving by the day. The explosive fusion of the mobile internet market with mobile contents, a phenomenon that has even been dubbed "smart-phone fever," has become a mega trend that has changed its users' ways of thinking and living.
The logistics industry stands in the middle of this new 'homo nomad' era. The enhancement of service quality through the integration of the logistics business and IT technology is nothing new to us, and the recent development of the logistics industry was in effect buttressed by the application of IT technology. However, if one understands the logistics industry merely as the integration of logistics business centered on the 'visibility' of the supply chain, and the use of smart phones in logistics services, you are hardly keeping abreast of the latest trends of this new era. As mentioned before, it should be noted that smart-phone fever has brought about a change in users' ways of thinking and living.
Smart-phone fever is noteworthy in that it has reversed the traditional process of production, distribution and consumption. When looking only at the mobile handset market, it is clear that the paradigm of competition for hardware for clearer vision and more dazzling designs has shifted to the paradigm of a race for contents, namely more convenient applications. Also, users develop by themselves the programs that their mobile handsets require, and circulate them in the market - yet another trend that differs from past practices. Gone is the era when users had to unconditionally accept the functions installed in their mobile phones. Instead, a new era has arrived in which users install customized functions in their mobile handsets according to their particular needs.
The importance of providing customized contents to meet users' needs will ultimately be recognized by all industries, rather than remaining a phenomenon of the mobile handset market alone. Notably, it will have an impact on the logistics industry, which does not generally change in a short period of time, and thus is even termed "social overhead capital" to reflect its nature.
That being the case, what form will customized content take in the logistics industry? In a word, it will consist of content tailored to freight owners. In the coming years, Korea's logistics industry will not be able to remain competitive if it blindly seeks the acquisition of ever greater freight volumes through the expansion of its infrastructure, including ports and airports. Rather, it will be able to make the leap to becoming a world-class logistics industry only when it succeeds in attracting global freight volumes by offering diverse customized logistics services, and by providing such assistance through IT.
A logistics company must secure partnerships with freight owners/costumers based on long-term trust in order to provide customized logistics services to freight owners. Rather than seeking a high margin in the short term, a logistics company must focus on cost cutting efforts, and pursue a strategy designed to reinforce the competitiveness of manufacturers, which are its customers, by banking on the success and achievements of such efforts. Logistics IT also must emphasize a software-centered approach to assisting freight owners in decision-making, and resolving complicated, treacherous issues, rather than a hardware-focused approach, such as the immediate introduction of smart phones.
In order to cope with such changes, Pantos Logistics has significantly beefed up its logistics consulting service compared with several years ago, and is striving to develop a strategy for providing services that offer optimum solutions by taking into account a freight owner client's business situations and logistics environment, and to materialize this strategy through IT. With regard to logistics IT, the company developed the Pantos Visibility System (PVS) and put it into service for the first time in Korea in 2006, and went on to augment it with intelligent service functions - including consulting elements such as the optimization of logistics routes and cost simulation - from 2009, for application to customized services. Work is also under way to advance this system to systematically incorporate production, finance, and trade. Moreover, in order to fully utilize the advantages of Web 2.0, namely, 'openness, participation and sharing,' Pantos Logistics is implementing a Global Single Instance (GSI) that will integrate and unify all systems at its headquarters with those of its 83 affiliates and branches in 35 countries worldwide through the web for the first time among Korea's logistics companies.
As competition intensifies among manufacturing companies in the global market, the issue of boosting the competitiveness of the Korean logistics industry has become a frequent topic of conversation in recent times. Smart-phone fever sends a message to the Korean logistics industry that the industry must continue innovating, and embrace newness and diversity based on a stance of 'openness, participation and sharing' in order to creatively address problems.