🚢 Here's What You'll Learn from This Article!

  1. Samsung SDS has unveiled the next blueprint for its journey towards becoming a comprehensive digital forwarding service provider, leveraging the scalability of its logistics platform ‘Cello Square.’ However, there's an intriguing premise at the start: despite the advanced technologies applied to digital logistics, there is one fundamental issue that cannot be entirely overcome. The 'supply chain crisis' cannot be completely eliminated and must be accepted as an inevitable occurrence.
  2. Samsung SDS’s next logistics strategy blueprint is summarized by the keyword ‘Supply Chain Agility.’ Given that crises are bound to happen, the focus is on quickly recognizing and responding to them. To achieve this, three strategic approaches have been prepared: ‘Hyper automation,’ ‘Holistic Visibility,’ and ‘Decision Intelligence.’ You will learn the meaning of each keyword, related examples, and the future direction of Samsung SDS's logistics business.
  3. Hyper automation, Holistic Visibility, and Decision Intelligence. Just looking at these terms might not make their meanings clear. Breaking them down, hyper automation refers to 'automation using generative AI technology.' Holistic visibility means providing 'predictive visibility for future points in time,' going beyond past and present data. Lastly, decision intelligence refers to 'quick monitoring of crisis situations using AI technology.' You can learn about the latest trends in how Samsung SDS applies digital technology to logistics.
  4. In summary, Samsung SDS’s strategy is not significantly different from the core aspects of the business that have been emphasized repeatedly in the past. Agility in the supply chain, automation, and visibility have always been important. What has changed are the improved details compared to the past. You will understand why Samsung SDS believes that ‘digital logistics’ ultimately benefits not only customer shippers but also improves its own profitability.

CHAPTER 1

A Gap that Advanced Technology Couldn’t Overcome

We’ve already discussed how the core business of Samsung SDS's logistics division is shifting towards the logistics platform ‘Cello Square.’ This change is now reflected in the numbers. Last year, Cello Square's revenue was 560 billion KRW, more than doubling compared to 2022. In the first quarter of this year, Cello Square's revenue grew by 381% year-over-year to 255 billion KRW. This achievement stands out even more considering that the overall revenue of Samsung SDS's logistics division in the first quarter (1.6937 trillion KRW) saw a 12% decline compared to the same period last year.

According to Samsung SDS, Cello Square played a significant role in creating the ‘scalability’ of digital forwarding services. While the previous digital logistics business, Cello, which Samsung SDS had been operating since 2012, was limited to large enterprises with a certain level of digitalization represented by ERP (Enterprise Resource Planning) system expansion, Cello Square allowed anyone to sign up as a member, browse quotes for desired international logistics sections for free, and apply for related logistics services. This significantly increased the usage by medium and small business customers. As of the first quarter, the number of customer companies registered with Cello Square exceeded 12,200.

However, there is one challenge, or rather an inevitable premise, that Samsung SDS's digital logistics, which has achieved scalability, still hasn’t overcome. Advanced technology and digitalization cannot prevent the ‘supply chain crisis’ that comes to the logistics operating environment at any moment.

For example, right now, floods in southern Brazil have closed ports and airports, making it difficult to proceed with logistics services in those areas. The Houthi rebels in Yemen, who are blocking entry to the Suez Canal, continue to pose a threat. Although not confirmed yet, Samsung SDS anticipates a high possibility of a strike by the Canadian railway company crew union in the near future and is preparing to respond to this risk.

Various incidents arising from natural disasters and geopolitical relationships, whether small or large, will impact the supply chain. We remember the global supply chain congestion and freight rate surges triggered by COVID-19. We also recall the impacts on the supply chain from ongoing events such as the Ukraine-Russia war and the Israel-Hamas war. It is evident that no matter how advanced IT technology is, it is impossible for anyone to fundamentally prevent such issues.

Therefore, Samsung SDS assumed these supply chain crises as constants that inevitably occur rather than occasional variables. This is the background behind Samsung SDS emphasizing the core keyword of ‘Supply Chain Agility’ in its digital logistics business operations this year. While digital technology cannot fundamentally prevent crises approaching the supply chain, it can provide sufficient support for ‘agile response.’ Consequently, three major strategic keywords were established to create agility. The following is based on the account shared by Oh Goo-il, Executive Vice President of Samsung SDS's Logistics Business Division, at the Cello Square Media Day on the 20th.