Creating competitiveness via grafting IT onto logistics industry As the Busan Port Authority (www.pba.or.kr) leverages IT as a driver of innovation, the Authority is striving to offer a differentiated service as well as spearheading the use of logistics IT, as a means of differentiating itself from ports in competing countries. The Authority, launched January 2004, is being fingered as a mover and shaker within the international port world not the least because it is continuously boosting improvements in the port's productivity and efficiency, in particular, by creating competitiveness via grafting information technology onto the logistics industry and generally making the most of IT's inherent advantages. Port Authority president Choo June-suk says in an interview on the occasion of the Day of Sea that the Authority is making efforts to boost the port's operational efficiency through innovation at the corporate management level and human resource specialization. He stresses that the Busan Port Authority was launched in January last year with a view to developing Busan Port as a central logistical port for Northeast Asia. He emphasizes that the Busan Port Authority will introduce a one-stop service such as Port-MIS (Management Information System) to enable customers to utilize PDAs and enhance their overall satisfaction. To spur cargo handling rates the Authority has an intensive drive on to boost port sales, and the president explains that the Busan Port is enlarging its current Volume Incentive System and securing cargoes through brisk marketing to Europe, the Middle East and the Americas. Choo said that IT infrastructure can enable a country to become a logistics power by connecting with another country's product development, R&D, and manufacturing capability as well as its centers of decision-making regarding distribution. In that respect, he underlines that Korea's IT technology level and infrastructure will be the biggest competitive factors for the logistics industry. Owing to progressive regional specialization, the international movement of intermediate materials, half-finished goods as well as completely-finished products is on the rise and the demand for reprocessing, assembling and packing will increase, Choo foresees. As customers' demands become more complicated and elaborate, the president said he believes the fact that Korea is vested with excellent IT and infrastructure will be advantageous. He points out that from a port industry standpoint or geographical standpoint, Korea's chief competitors are Chinese ports. Actually, Chinese harbors are rapidly growing thanks to the abundance of cargo to be shipped from their hinterlands plus their low cost. Choo insists that Busan Port also should make the maximum use of its geographic advantages, situated as it is at the center of Northeast Asia in close proximity to competing Chinese ports, adding that whether Busan Port can provide a diverse value-added service by accumulating cargoes bound for the Americas, Europe and Asia, will determine its competitiveness in the coming years. In that regard, he said the Busan Port Authority will offer higher efficiency and a total level of service than competing harbors by providing top-end facilities and infrastructure over the long run and by grafting IT onto this array of hardware. In particular, the Port Authority plans to grow into a world-standard, first-rate port enterprise by 2020. To accomplish such a long-range management goal, the Authority established an informatization strategy that it intended to implement over 5 years. To execute this informatization goal, which consists of implementing in-house processes (the first stage), consolidating the port's future growth base (the second stage), and building new business capacity (the third stage), the Authority allocated a budget amounting to 15 billion won that will be spent from 2005 to 2009. The essentials of the Port Authority informatization plan consist of an all-round logistics information system to serve as ubiquitous IT-port base for which 30 billion won will be invested, establishing a port value chain management system, and management process innovation, boosting the marketing effort for port sales and attracting investment.