Samsung SDS to expand presence in AI, blockchain-based logistics biz

Samsung SDS CEO Hong Won-pyo speaks during a press conference in Pangyo, Gyeonggi Province, Thursday. / Courtesy of Samsung SDS

By Kang Seung-woo

Samsung SDS seeks to expand its presence in the "smart" logistics business, using artificial intelligence (AI) and blockchain technology.

The company also eyes the e-commerce market on the back of its advanced technologies such as internet of things and big data as well as blockchain and AI.

"Making the most of the smart logistics platform Cello, Samsung SDS is set to drive for innovative logistics services," Executive Vice President Kim Hyung-tae said during a media conference in Pangyo, Gyeonggi Province. It took place on the sidelines of the firm's annual conference, designed to discuss the future of its global logistics business.

Cello is an integrated logistics system that was developed in 2010 to drive the supply chain faster from end to end.

Since entering the logistics business in 2012, the Samsung system integration service affiliate has expanded into business process outsourcing (BPO), with its 2017 revenue reaching 4.2 trillion won ($3.95 billion).

Although it had focused on Samsung Electronics' volume until 2015, the Seoul-based company currently operates in 40 countries and its annual global cargo volume is the world's 10th largest -- 490,000 tons of air freight and 1 million tons of ocean freight.

Samsung Electronics accounts for 85 percent of the volume, while other Samsung affiliates take up 5 percent. Currently, the proportion from non-Samsung players is 10 percent, but SDS seeks to beef up the bulk from the group.

The firm offers three logistics services: Cello BPO, Cello Plus and Cello Square.

Cello BPO provides comprehensive logistics services. Cello Plus is an integrated supply chain and logistics (SCL) platform that supports all areas of supply chain management and logistics. Cello Square is an open-source logistics platform that enables transaction between shippers and logistics service providers (LSP) by leveraging Samsung's cutting-edge technology.

Using its own big data analytics engine Brightics AI, Samsung SDS run fulfillment centers in European distribution channels.

The AI platform enables informed decision making, increasing accuracy of demand forecasting, saving time on forecasting sales and reducing uncertainty in demand forecasting.

"It took a day for an experienced sales employee to do demanding sensing, but it only takes 10 minutes with Brightics AI," Kim said.

"Moreover, its forecast accuracy has increased by 25 percentage points."

As part of its efforts to accelerate its blockchain drive, Samsung SDS applied the next-generation technology to Samjin Food, a Busan-based fishcake maker.

Blockchain keeps track of every transaction within a business network for full end-to-end transparency. Chains of data blocks are shared with participants throughout the network, guaranteeing data integrity without third-party verification.

Blockchain allows participants to share every transaction record through the distribution system. It boasts considerable safety features as the distributed information makes forgeries and alterations extremely difficult.

Samsung's blockchain adoption draws attention as public concerns over seafood are growing following the 2011 Fukushima Daiichi Nuclear Power Plant accident.

The company plans to expand the blockchain technology to various businesses such as trade finance as well as authentication.

Smart logistics in e-commerce is another target for Samsung SDS.

"Samsung SDS has been emerging rapidly as a platform-based company," CEO Hong Won-pyo said.

"When it happens, we will be able to do competitive business as well as raising business efficiency."

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