1 00:00:13,650 --> 00:00:16,040 Hello, in the MRO Process course, 2 00:00:16,041 --> 00:00:18,509 I will be giving a lecture on Understanding Logistics 3 00:00:18,800 --> 00:00:23,879 The content I prepared covers Hub Inbound and Outbound Management, Inventory Management, 4 00:00:23,880 --> 00:00:25,460 and Transportation Management 5 00:00:25,939 --> 00:00:28,641 We’ll start with hub inbound and outbound management, 6 00:00:28,641 --> 00:00:33,241 looking at what logistics is and its role, and also SERVEONE’s logistics process 7 00:00:33,500 --> 00:00:36,099 Next, under inventory management, 8 00:00:36,100 --> 00:00:39,900 we’ll cover its definition and SERVEONE’s approach to inventory control 9 00:00:40,239 --> 00:00:45,024 Finally, in transportation management, we’ll learn about logistics transportation, 10 00:00:45,025 --> 00:00:47,545 SERVEONE’s delivery system, and the regional trunk-line structure 11 00:00:48,296 --> 00:00:52,480 From 2015 to 2020, 12 00:00:52,481 --> 00:00:55,763 I worked in e-commerce logistics planning at a Unilever affiliate 13 00:00:56,220 --> 00:01:02,259 From 2020 to 2021, I managed overall logistics planning at a subsidiary of Yuhan Corporation 14 00:01:02,579 --> 00:01:06,039 Since 2021, I have been with SERVEONE, 15 00:01:06,040 --> 00:01:09,360 handling logistics contracts, planning, and cost management 16 00:01:09,639 --> 00:01:14,640 In 2022, I was honored with the SERVEONE Pride Award as Best Employee of the Year 17 00:01:14,960 --> 00:01:19,700 Let’s begin the first topic: Hub Inbound and Outbound Management 18 00:01:21,240 --> 00:01:26,420 The word logistics in Chinese characters literally means “the flow of goods” 19 00:01:26,421 --> 00:01:29,341 It refers to the efficient flow of goods and services 20 00:01:29,860 --> 00:01:33,680 In simple terms, logistics covers all activities 21 00:01:33,681 --> 00:01:36,681 that move a customer’s order from the producer to the consumer, 22 00:01:36,801 --> 00:01:40,139 connecting production and consumption 23 00:01:40,520 --> 00:01:44,819 These activities include storage, handling, transportation, packaging, 24 00:01:44,820 --> 00:01:48,826 and information processing 25 00:01:49,519 --> 00:01:53,300 Many people often confuse logistics and distribution 26 00:01:53,600 --> 00:01:58,520 Distribution means the economic activity that connects production and manufacturing to the customer 27 00:01:58,780 --> 00:02:03,260 Logistics, connects manufactured products to the customer 28 00:02:03,340 --> 00:02:07,897 In a broader sense, distributions an economic activity that links production and manufacturing to the customer 29 00:02:07,897 --> 00:02:10,537 In other words, a marketing activity 30 00:02:10,779 --> 00:02:14,700 Logistics plays an important role within the distribution process 31 00:02:14,900 --> 00:02:18,620 The goal of logistics is to deliver products safely, accurately, and quickly 32 00:02:18,620 --> 00:02:21,836 to the right place at the right time, 33 00:02:21,836 --> 00:02:24,294 providing the best logistics service 34 00:02:24,940 --> 00:02:27,440 To achieve this, 35 00:02:27,441 --> 00:02:31,847 companies invest in people, vehicles, facilities, and infrastructure 36 00:02:31,848 --> 00:02:34,048 to improve logistics services 37 00:02:34,760 --> 00:02:38,319 This is called a trade-off or the seesaw principle 38 00:02:38,579 --> 00:02:41,640 If investment is low, service quality will also be low 39 00:02:41,918 --> 00:02:45,718 If investment is high, service quality will rise as well 40 00:02:46,620 --> 00:02:51,879 However, excessive investment can seriously affect a company’s cash flow 41 00:02:51,880 --> 00:02:54,860 That is why companies must work to balance this trade-of 42 00:02:55,239 --> 00:02:59,760 To resolve this trade-off, we must use both external and internal resources appropriately 43 00:03:00,220 --> 00:03:06,359 External resources include logistics investments such as new equipment, system adoption, and building new centers 44 00:03:06,559 --> 00:03:09,659 Internal resources involve improving operations, 45 00:03:09,660 --> 00:03:12,880 such as revising inbound and outbound strategies, adjusting storage strategies, 46 00:03:12,881 --> 00:03:14,842 router settings, and workflow paths 47 00:03:15,139 --> 00:03:17,520 By making good use of both resources, 48 00:03:17,520 --> 00:03:21,820 we can achieve the goals of logistics, improving service quality and reducing costs at the same time 49 00:03:21,821 --> 00:03:24,681 This enhances the company’s distribution competitiveness 50 00:03:25,141 --> 00:03:28,779 A logistics center is a facility for activities such as receiving goods, 51 00:03:28,780 --> 00:03:33,946 storing and placing them, picking and packing, processing for distribution, loading, unloading, and shipping 52 00:03:34,539 --> 00:03:38,220 To carry out logistics activities, a hub like the logistics center is essential 53 00:03:38,221 --> 00:03:42,041 From this hub, logistics services are provided through various logistics operations 54 00:03:42,420 --> 00:03:45,040 There are four main types of logistics centers 55 00:03:45,440 --> 00:03:47,440 The first is the general logistics center 56 00:03:47,600 --> 00:03:51,958 In this type, companies may add extra logistics activities or facilities 57 00:03:51,959 --> 00:03:54,819 depending on their distribution and marketing concepts 58 00:03:55,219 --> 00:03:59,739 A general logistics center handles a wide range of logistics operations, 59 00:04:00,299 --> 00:04:04,899 including receiving, storage, QA, QC, picking and packing, 60 00:04:04,900 --> 00:04:08,220 processing for distribution, loading, unloading, and shipping 61 00:04:08,819 --> 00:04:13,300 A hub terminal is a logistics center that sorts goods by destination for delivery 62 00:04:13,540 --> 00:04:16,540 It is the type of logistics center used by courier companies 63 00:04:17,040 --> 00:04:20,500 A fulfillment logistics center is an e-commerce type logistics center 64 00:04:20,691 --> 00:04:24,891 It handles both e-commerce deliveries and returns 65 00:04:25,140 --> 00:04:28,259 The most common examples are Amazon and Coupang 66 00:04:28,739 --> 00:04:31,621 A smart logistics center is a logistics center 67 00:04:31,621 --> 00:04:35,764 equipped with advanced systems and technology 68 00:04:36,120 --> 00:04:39,780 A well-known example is Shinsegae SSG 69 00:04:40,420 --> 00:04:45,156 SERVEONE logistics centers combine the functions of a general center, a hub, 70 00:04:45,289 --> 00:04:50,129 a fulfillment center, and a smart center 71 00:04:50,404 --> 00:04:55,660 In particular, the Ochang Mega Hub performs all four of these functions 72 00:04:56,520 --> 00:05:00,864 As a note, SERVEONE logistics centers are often called OO Hub, 73 00:05:01,097 --> 00:05:03,857 but the official name is OO Hub Center 74 00:05:04,076 --> 00:05:08,659 Since they serve the role of a logistics center, the word center is included in the name 75 00:05:09,079 --> 00:05:11,479 As for the current status of SERVEONE logistics centers, 76 00:05:11,480 --> 00:05:15,379 in addition to customer logistics centers, there are nine coordination hub centers, 77 00:05:15,619 --> 00:05:20,160 five company-owned hubs and four leased hubs 78 00:05:20,400 --> 00:05:24,000 SERVEONE operates a total area of 122,100 m² 79 00:05:24,000 --> 00:05:28,740 with 179 employees and 175 vehicles in service 80 00:05:29,040 --> 00:05:32,399 The reason SERVEONE logistics centers are called hub centers 81 00:05:32,399 --> 00:05:34,721 is because they perform multiple functions 82 00:05:34,721 --> 00:05:38,107 They operate both standard products and dedicated products like a general logistics center, 83 00:05:38,107 --> 00:05:43,119 while also handling cross-docking, which means moving non-stocked items 84 00:05:43,119 --> 00:05:45,699 like a hub terminal 85 00:05:46,059 --> 00:05:49,760 They also function as transfer hubs between centers, 86 00:05:49,760 --> 00:05:52,341 receiving goods at a hub near the supplier, 87 00:05:52,341 --> 00:05:55,559 then moving them to a sub-center near the customer 88 00:05:55,559 --> 00:05:59,819 This enables nationwide delivery through the hub center system 89 00:06:00,479 --> 00:06:03,279 Let’s look at the logistics process 90 00:06:03,459 --> 00:06:07,779 At SERVEONE, products are handled based on inventory or non-inventory type and delivery method, 91 00:06:07,779 --> 00:06:12,280 all managed through ERP and SLP systems 92 00:06:12,660 --> 00:06:15,260 When goods arrive from suppliers, 93 00:06:15,260 --> 00:06:20,200 tasks include unloading, inbound inspection, and inbound labeling 94 00:06:20,200 --> 00:06:22,680 At the same time, delivery schedules are managed administratively 95 00:06:22,960 --> 00:06:27,500 If the goods fail to meet SERVEONE’s inbound standards, they are returned to the supplier 96 00:06:27,840 --> 00:06:33,280 After goods are received, inventory items are stored and managed depending on the delivery type 97 00:06:33,580 --> 00:06:38,600 Storage and inventory management include placing goods in their location on the same day, 98 00:06:38,600 --> 00:06:41,579 first-in first-out control, location management, 99 00:06:41,580 --> 00:06:44,509 inventory monitoring, and stock-taking 100 00:06:44,739 --> 00:06:49,700 For non-inventory items, they are not subject to storage or inventory control 101 00:06:49,700 --> 00:06:52,319 After inbound processing, they go directly to outbound processing 102 00:06:52,779 --> 00:06:57,580 Back to inventory, for outbound processing, 103 00:06:57,580 --> 00:07:01,281 stored goods go through picking and packing, outbound labeling, 104 00:07:01,281 --> 00:07:03,681 sorting, and outbound inspection 105 00:07:03,860 --> 00:07:08,739 After inspection, inventory and non-inventory items together move to the loading stage 106 00:07:09,079 --> 00:07:12,260 Depending on trunk-line use, goods may be delivered directly 107 00:07:12,261 --> 00:07:14,381 or transferred through trunk-line shipping 108 00:07:14,680 --> 00:07:17,879 Trunk-line shipping requires vehicle scheduling 109 00:07:17,880 --> 00:07:20,099 and in/out management 110 00:07:20,419 --> 00:07:24,959 For delivery, it depends on the method, direct vehicle delivery or courier delivery 111 00:07:24,959 --> 00:07:28,839 Vehicle delivery requires route and regional management, 112 00:07:28,839 --> 00:07:31,859 while courier delivery requires close monitoring to avoid issues with parcel collection 113 00:07:32,219 --> 00:07:36,660 In addition, SERVEONE provides a separate collection service 114 00:07:36,780 --> 00:07:39,640 After delivery, if a customer returns a product, 115 00:07:39,640 --> 00:07:43,280 it goes back through the inbound process step by step 116 00:07:44,080 --> 00:07:48,540 Logistics may be operated by in-house staff or outsourced 117 00:07:48,840 --> 00:07:53,200 At SERVEONE, it is outsourced, and this is called 3PL 118 00:07:53,460 --> 00:07:58,700 3PL means a logistics service where a specialized company handles the full logistics activities 119 00:07:58,700 --> 00:08:00,081 for the client company 120 00:08:01,040 --> 00:08:04,860 By contracting with such companies, 121 00:08:04,860 --> 00:08:09,300 SERVEONE gains logistics expertise through professional staff and specialized solutions 122 00:08:10,100 --> 00:08:13,440 SERVEONE also has current 3PL contracts 123 00:08:13,440 --> 00:08:18,079 The main hub operators are LX Pantos and CJ Logistics 124 00:08:18,079 --> 00:08:24,940 Other dedicated operators for clients include Lotte Global Logistics, Han Express, and Hanbat Logistics 125 00:08:25,260 --> 00:08:30,180 For parcel delivery, separate contracts are in place with CJ Logistics and ILYANG Logis 126 00:08:30,700 --> 00:08:33,099 After signing a 3PL contract, 127 00:08:33,099 --> 00:08:37,294 a Service Level Agreement (SLA) is made between the client company and the logistics operator 128 00:08:37,479 --> 00:08:40,880 An SLA aims to improve 129 00:08:40,880 --> 00:08:44,580 the quality of logistics services for the client company 130 00:08:44,900 --> 00:08:47,980 Based on the evaluation, incentives or penalties are applied 131 00:08:47,980 --> 00:08:51,840 SLA evaluations are also used for vehicle contracts 132 00:08:52,160 --> 00:08:57,639 Typical criteria include LT, claims, CBM, and safety evaluations 133 00:08:58,679 --> 00:09:02,400 Logistics cost refers to the economic value 134 00:09:02,400 --> 00:09:06,779 directly or indirectly consumed to carry out overall logistics activities, 135 00:09:06,779 --> 00:09:12,000 from delivering finished products to clients, to shipping to customers, handling returns, and disposal 136 00:09:12,000 --> 00:09:14,920 In other words, it is the cost incurred in logistics activities 137 00:09:14,921 --> 00:09:19,314 It also serves as basic data to support 138 00:09:19,314 --> 00:09:23,099 managers in making decisions to achieve 139 00:09:23,099 --> 00:09:24,559 business goals related to logistics 140 00:09:25,219 --> 00:09:32,060 Logistics cost is made up of five main parts: handling, packaging, storage and rental, 141 00:09:32,060 --> 00:09:34,379 transportation, and logistics information management 142 00:09:34,919 --> 00:09:39,619 Handling cost is the labor expense for logistics operations inside the center 143 00:09:40,179 --> 00:09:44,299 Since workers are required inside the center, 144 00:09:44,299 --> 00:09:47,240 handling cost is also considered labor cost 145 00:09:47,720 --> 00:09:52,199 Packaging cost is the expense for consumables used in logistics activities 146 00:09:52,999 --> 00:09:57,940 Storage and rental cost comes from leasing logistics centers, 147 00:09:57,940 --> 00:10:02,280 covering product storage fees and warehouse rent 148 00:10:03,080 --> 00:10:07,780 Transportation cost includes in-house transfers 149 00:10:07,780 --> 00:10:11,160 between branches or hubs, as well as delivery to customers 150 00:10:11,520 --> 00:10:15,999 It can be divided into vehicle cost, charter cost, and courier cost 151 00:10:16,699 --> 00:10:19,839 Logistics information management cost refers to system usage fees 152 00:10:19,840 --> 00:10:22,607 If a logistics system is not built in-house, 153 00:10:22,607 --> 00:10:26,460 fees are paid for using external systems 154 00:10:26,800 --> 00:10:33,479 At SERVEONE, handling, packaging, storage and rental, and transportation costs occur 155 00:10:33,479 --> 00:10:36,239 Since SERVEONE has its own integrated logistics system, 156 00:10:36,239 --> 00:10:39,639 there is no separate cost for logistics information management 157 00:10:39,779 --> 00:10:43,760 Storage and rental costs depend on whether the facilities are currently leased 158 00:10:44,040 --> 00:10:46,820 CST is a Costing Simulation Tool 159 00:10:46,821 --> 00:10:49,761 It allocates costs based on logistics activities, 160 00:10:49,761 --> 00:10:53,660 covering labor, vehicles, courier, and packaging consumables 161 00:10:53,660 --> 00:10:57,620 used in sales and purchasing operations 162 00:10:58,060 --> 00:11:01,820 For existing products and clients, 163 00:11:01,820 --> 00:11:07,600 CST calculates expected logistics costs in real time across more than 100 delivery scenarios 164 00:11:07,600 --> 00:11:11,920 This helps determine proper purchase prices and customer sales prices for operating products 165 00:11:12,060 --> 00:11:15,939 For new business expansion, CST is also used to estimate logistics costs 166 00:11:15,939 --> 00:11:18,779 to support sales and purchasing activities 167 00:11:19,039 --> 00:11:23,699 Every month, actual logistics costs from inventory and non-inventory orders 168 00:11:23,699 --> 00:11:25,960 are allocated by each operating unit 169 00:11:26,520 --> 00:11:30,639 Hub handling standards are divided into seven categories 170 00:11:30,639 --> 00:11:34,019 Items that cannot be handled at the hub cannot be processed, 171 00:11:34,020 --> 00:11:37,223 so they must be reviewed in advance 172 00:11:37,679 --> 00:11:41,220 Heavy cargo refers to irregular or asymmetric products 173 00:11:41,220 --> 00:11:44,259 that are not packaged in boxes 174 00:11:44,619 --> 00:11:46,999 If heavy cargo exceeds 30kg per sales unit, 175 00:11:47,000 --> 00:11:49,660 it cannot be processed 176 00:11:50,179 --> 00:11:53,399 Bulky items are those with a length over 3m, 177 00:11:53,400 --> 00:11:58,408 a total of three sides exceeding 3m, or any single side at least 1m 178 00:11:58,408 --> 00:12:00,079 Such bulky items cannot be handled at the hub 179 00:12:00,319 --> 00:12:04,140 Logistics basically operates with pallet loading 180 00:12:04,140 --> 00:12:07,620 If the size exceeds pallet standards, logistics operations are not possible 181 00:12:07,900 --> 00:12:11,580 Installation and inspection items are not handled by SERVEONE 182 00:12:11,580 --> 00:12:15,499 Such items belong to a separate system called installation logistics 183 00:12:15,760 --> 00:12:20,680 Since SERVEONE does not operate installation logistics, these items cannot be handled 184 00:12:21,400 --> 00:12:25,520 Intangible products refer to goods 185 00:12:25,520 --> 00:12:27,560 that do not physically exist 186 00:12:27,561 --> 00:12:32,240 Bundle products mean multiple items managed together as one product idea 187 00:12:32,900 --> 00:12:36,000 Hazardous materials include gases, 188 00:12:36,001 --> 00:12:39,285 flammable items, and toxic substances, 189 00:12:39,285 --> 00:12:41,019 so they cannot be handled at the hub 190 00:12:41,280 --> 00:12:43,740 Such items require 191 00:12:43,740 --> 00:12:47,980 specialized managers and logistics centers that can store them safely 192 00:12:48,320 --> 00:12:51,859 At SERVEONE, gases, flammables, and toxic materials 193 00:12:51,859 --> 00:12:54,160 are not professionally handled 194 00:12:54,460 --> 00:12:58,260 However, some hazardous items are allowed within certain limits 195 00:12:58,260 --> 00:13:01,179 So hazardous materials must be shared with the logistics team in advance 196 00:13:01,180 --> 00:13:04,421 for further review on whether handling is possible 197 00:13:05,299 --> 00:13:07,980 Frozen and refrigerated goods, like hazardous materials, 198 00:13:07,980 --> 00:13:11,141 require separate logistics centers and storage cases 199 00:13:11,141 --> 00:13:14,400 However, some frozen and refrigerated items are allowed within certain limits 200 00:13:14,400 --> 00:13:17,420 So these goods must also be shared with the logistics team in advance 201 00:13:17,420 --> 00:13:20,640 for further review on whether handling is possible 202 00:13:21,079 --> 00:13:25,339 Finally, fragile items cannot be handled at the hub 203 00:13:25,339 --> 00:13:28,880 if packaging is insufficient 204 00:13:29,180 --> 00:13:32,900 Even if accepted at the hub, items that break easily 205 00:13:32,900 --> 00:13:35,579 are exempt from liability by the logistics company 206 00:13:35,580 --> 00:13:37,700 Please keep this in mind when managing such products 207 00:13:38,320 --> 00:13:41,280 Hub inbound standards include: inbound label attachment, 208 00:13:41,281 --> 00:13:45,781 inbound packing list, packaging, and cushioning 209 00:13:45,781 --> 00:13:49,679 Four types are defined: single packaging, combined packaging, 210 00:13:49,679 --> 00:13:51,760 outer packaging, and cushioning packaging 211 00:13:52,240 --> 00:13:54,039 If inbound labels are missing 212 00:13:54,040 --> 00:13:56,974 or packing lists are not included in the box, 213 00:13:56,974 --> 00:14:00,440 single packaging fails the standard and is returned 214 00:14:01,000 --> 00:14:03,601 For combined packaging, if recipients are different, 215 00:14:03,601 --> 00:14:05,440 boxes must be packed separately, 216 00:14:05,440 --> 00:14:08,819 with one label per box 217 00:14:09,359 --> 00:14:12,520 Irregular items must be packed in boxes 218 00:14:12,520 --> 00:14:16,340 If unsuitable packing materials are used, the goods will be returned 219 00:14:16,760 --> 00:14:21,859 If cushioning to prevent breakage is insufficient, the goods will also be returned 220 00:14:21,859 --> 00:14:25,359 Even if accepted, if packaging or cushioning is poor, 221 00:14:25,360 --> 00:14:27,220 the logistics company is not liable 222 00:14:27,220 --> 00:14:31,720 for damage during operations 223 00:14:32,119 --> 00:14:37,119 Please review the inbound standards in advance to avoid issues at inbound 224 00:14:37,119 --> 00:14:41,600 Sometimes, even if standards are not met, items may still enter the hub 225 00:14:42,200 --> 00:14:45,279 In such cases, they may be taken out for rework 226 00:14:45,280 --> 00:14:47,380 and requested for re-inbound, 227 00:14:47,380 --> 00:14:51,819 or if rework is done inside the hub, extra costs may occur 228 00:14:51,819 --> 00:14:54,319 Keep this in mind when operating 229 00:14:55,499 --> 00:15:00,699 Inventory management means keeping stock at the optimal level 230 00:15:00,699 --> 00:15:03,579 to respond quickly and economically to customer demand 231 00:15:03,899 --> 00:15:06,660 Inventory must be supplied in the right quantity, 232 00:15:06,660 --> 00:15:08,840 at the right time, and to the right place 233 00:15:09,159 --> 00:15:12,260 If inventory is too high, 234 00:15:12,260 --> 00:15:15,841 excess purchasing and holding costs occur 235 00:15:15,841 --> 00:15:21,679 If inventory is too low, stockouts cause lost sales opportunities 236 00:15:22,039 --> 00:15:27,319 Therefore, inventory must be managed based on optimal stock and safety stock levels 237 00:15:27,760 --> 00:15:31,560 Safety stock prevents stockouts by keeping extra inventory 238 00:15:31,560 --> 00:15:35,800 and helps respond to rising demand to minimize lost sales 239 00:15:36,160 --> 00:15:40,659 However, if only safety stock is managed, 240 00:15:40,659 --> 00:15:44,100 as mentioned earlier, excess purchasing and holding costs occur 241 00:15:44,100 --> 00:15:48,359 To avoid this, optimal inventory management is required 242 00:15:48,799 --> 00:15:53,800 It prevents overstocking and keeps inventory at proper levels based on current market trends 243 00:15:54,220 --> 00:15:58,519 Here, “optimal” means neither too much nor too little 244 00:15:58,519 --> 00:16:03,180 The right level must be set by monitoring market trends 245 00:16:03,700 --> 00:16:08,220 Optimal inventory management also considers the economic side of safety stock, 246 00:16:08,220 --> 00:16:11,640 making it the best inventory policy 247 00:16:11,860 --> 00:16:16,619 The purpose of inventory management is to satisfy customer service levels 248 00:16:16,619 --> 00:16:20,600 while minimizing losses from stockouts, holding costs, and purchasing costs, 249 00:16:20,600 --> 00:16:26,139 in other words, total inventory cost 250 00:16:26,519 --> 00:16:30,659 By keeping optimal inventory, 251 00:16:30,659 --> 00:16:35,339 companies reduce related costs, prevent overstocking, and keep working capital flowing efficiently 252 00:16:35,779 --> 00:16:38,659 To achieve this, operations must align in practice 253 00:16:38,659 --> 00:16:43,039 to ensure stable production and sales activities 254 00:16:43,599 --> 00:16:47,259 There are two types of inventory: center stock and VMI 255 00:16:47,699 --> 00:16:50,859 Center stock means products purchased directly by the company 256 00:16:50,859 --> 00:16:53,740 and stored in its own logistics center 257 00:16:53,740 --> 00:16:56,100 Here, the inventory is owned by SERVEONE 258 00:16:56,639 --> 00:17:00,440 VMI means products purchased by a supplier 259 00:17:00,440 --> 00:17:03,581 but stored in the company’s center 260 00:17:03,581 --> 00:17:06,721 Here, the inventory is owned by the supplier 261 00:17:07,440 --> 00:17:12,159 Inventory ownership means this: inventory is managed the same way, 262 00:17:12,159 --> 00:17:17,100 but if stock is damaged or lost, center stock can simply be repurchased 263 00:17:17,100 --> 00:17:22,819 For VMI, however, damaged or lost items must be reimbursed to the supplier 264 00:17:23,339 --> 00:17:29,300 Inventory storage standards are divided into 3 categories based on turnover rate: high-frequency outbound products, 265 00:17:29,300 --> 00:17:35,319 low-frequency outbound products, and items returned by clients or suppliers 266 00:17:35,319 --> 00:17:40,640 Depending on the type of stock, goods are stored on pallet racks, shelf racks, or flat storage 267 00:17:41,100 --> 00:17:44,859 High-frequency outbound products have fast turnover, 268 00:17:44,859 --> 00:17:49,120 so they are stored close to the workspace after inbound 269 00:17:49,121 --> 00:17:52,101 Depending on the layout, flat storage, pallet racks, or shelf racks, 270 00:17:52,101 --> 00:17:54,440 stock may also be placed on flat storage 271 00:17:54,760 --> 00:17:59,019 Low-frequency outbound products have little or slow turnover, 272 00:17:59,019 --> 00:18:02,620 so they are stored farther from the workspace 273 00:18:02,621 --> 00:18:05,001 They are usually placed on pallet racks 274 00:18:05,400 --> 00:18:09,720 Returned items are stored near the inbound/outbound waiting area, 275 00:18:09,720 --> 00:18:12,860 or depending on the type of stock, 276 00:18:12,861 --> 00:18:17,839 they may also be stored like high-frequency items on pallet racks, shelf racks, or flat storage 277 00:18:19,439 --> 00:18:24,560 High- and low-frequency items are managed using the ABC storage strategy 278 00:18:24,560 --> 00:18:26,640 This may differ by company, 279 00:18:26,641 --> 00:18:30,300 but on average, A-grade accounts for the top 20%, 280 00:18:30,300 --> 00:18:35,240 B-grade for 60%, and C-grade for the bottom 20% 281 00:18:35,560 --> 00:18:39,739 In this system, high-frequency items are usually set at 30–40%, 282 00:18:39,739 --> 00:18:43,780 while low-frequency items are set at 60–70% 283 00:18:44,280 --> 00:18:47,820 Inventory auditing means checking whether 284 00:18:47,820 --> 00:18:51,700 the actual stock quantity matches the system records in the center 285 00:18:51,920 --> 00:18:56,220 It is the process of reconciling physical counts with system counts, 286 00:18:56,220 --> 00:18:59,919 which is an important factor in a company’s financial indicators 287 00:19:00,399 --> 00:19:03,360 Since each stock item is a company asset, 288 00:19:03,360 --> 00:19:08,640 inventory audits must confirm any inaccurate quantities, 289 00:19:08,641 --> 00:19:11,493 and ensure alignment between the system, physical stock, and accounting indicators 290 00:19:12,079 --> 00:19:15,580 Ultimately, inventory auditing means reconciling the actual stock value, 291 00:19:15,580 --> 00:19:21,039 the system stock value, and the accounting stock value 292 00:19:21,319 --> 00:19:24,499 At SERVEONE, inventory audits under 3PL 293 00:19:24,499 --> 00:19:29,320 are carried out in two ways: ad-hoc audits and regular audits 294 00:19:29,760 --> 00:19:34,819 Ad-hoc audits are done daily or at month-end, when SERVEONE requests checks 295 00:19:34,819 --> 00:19:38,100 on certain products or outbound locations 296 00:19:39,160 --> 00:19:41,099 There is no accounting reconciliation 297 00:19:41,099 --> 00:19:44,779 Any discrepancies are managed separately 298 00:19:44,780 --> 00:19:46,662 and recorded in the system as obsolete inventory 299 00:19:47,619 --> 00:19:52,939 Regular audits are conducted twice a year, covering all locations 300 00:19:52,939 --> 00:19:56,000 SERVEONE logistics staff perform sample audits 301 00:19:56,001 --> 00:19:58,741 to minimize errors in 3PL inventory checks 302 00:19:59,160 --> 00:20:04,159 The results of regular audits are used in accounting reports 303 00:20:04,159 --> 00:20:07,260 and ultimately applied to the company’s financial indicators 304 00:20:08,020 --> 00:20:12,020 Inventory valuation means determining how much a product is worth 305 00:20:12,020 --> 00:20:16,181 when it is produced or purchased, 306 00:20:16,181 --> 00:20:18,181 and how much it is worth when sold 307 00:20:18,880 --> 00:20:22,039 There are several methods of inventory valuation 308 00:20:22,040 --> 00:20:27,100 The main ones are the weighted average method, the FIFO method, and the moving average method 309 00:20:27,380 --> 00:20:30,459 Please refer to the calculation formula shown at the bottom right 310 00:20:30,459 --> 00:20:32,321 and follow the screen 311 00:20:32,321 --> 00:20:35,841 The weighted average method calculates inventory value 312 00:20:35,841 --> 00:20:40,480 by averaging the quantity and cost of beginning and ending inventory 313 00:20:40,880 --> 00:20:43,219 Looking at the calculation reference: 314 00:20:43,220 --> 00:20:46,099 if December 1 is the beginning date 315 00:20:46,099 --> 00:20:48,821 and December 6 is the ending date, 316 00:20:48,821 --> 00:20:54,281 the sum of beginning and ending costs is divided by the sum of beginning and ending quantities 317 00:20:54,281 --> 00:20:56,240 to get the inventory valuation amount 318 00:20:56,900 --> 00:21:02,060 The weighted average method is simple and easy to calculate, but it cannot reflect weights 319 00:21:02,060 --> 00:21:04,880 and requires clear beginning and ending data 320 00:21:05,280 --> 00:21:09,999 The moving average method is used as SERVEONE’s inventory valuation standard 321 00:21:09,999 --> 00:21:13,980 It recalculates stock quantity and revalues inventory assets 322 00:21:13,981 --> 00:21:16,181 at every inbound or outbound transaction 323 00:21:16,440 --> 00:21:20,380 In simple terms, the inventory value does not stay fixed 324 00:21:20,380 --> 00:21:24,339 but changes each time a transaction occurs 325 00:21:24,599 --> 00:21:26,799 This method is used by many companies 326 00:21:26,800 --> 00:21:29,861 and is considered the most accurate 327 00:21:30,379 --> 00:21:35,400 However, if transaction records are missing, the valuation can be distorted, 328 00:21:35,400 --> 00:21:38,519 so precise system input is essential 329 00:21:39,219 --> 00:21:43,239 On December 1, the inventory valuation was 150 won 330 00:21:43,239 --> 00:21:47,781 On December 3, there was no new purchase and only 15 sales occurred, 331 00:21:47,781 --> 00:21:50,741 so the valuation remained 150 won 332 00:21:51,040 --> 00:21:53,579 At this point, the remaining stock was 5 unit 333 00:21:53,580 --> 00:21:55,859 On December 6, a new purchase was made 334 00:21:55,859 --> 00:22:01,199 From the December 1 purchase, 5 units remained valued at 150 won 335 00:22:01,199 --> 00:22:04,780 From the December 6 purchase, the inventory cost was 1,000 won 336 00:22:04,781 --> 00:22:09,301 So, 750 plus 1,100 divided by 15 remaining units 337 00:22:09,301 --> 00:22:12,240 equals 123.3 won 338 00:22:12,640 --> 00:22:14,699 On December 7, since no sales occurred, 339 00:22:14,699 --> 00:22:18,660 the inventory valuation remained at 123.3 won 340 00:22:19,359 --> 00:22:23,120 The formula may look complicated, but it is simply: the total cost of remaining stock 341 00:22:23,120 --> 00:22:26,421 plus the total cost of new stock, 342 00:22:26,421 --> 00:22:30,679 divided by the remaining quantity plus the new quantity 343 00:22:31,019 --> 00:22:35,220 Until a new purchase occurs, the inventory valuation amount 344 00:22:35,220 --> 00:22:38,560 remains at 123.3 won based on this formula 345 00:22:39,040 --> 00:22:44,040 The FIFO method bases valuation on the cost of the earliest purchase 346 00:22:44,320 --> 00:22:47,179 When purchased stock is sold, 347 00:22:47,180 --> 00:22:49,880 the next purchase cost becomes the new standard 348 00:22:50,280 --> 00:22:53,560 FIFO means that inventory received first 349 00:22:53,561 --> 00:22:56,011 must also be shipped out first 350 00:22:56,011 --> 00:23:00,539 Looking at the formula: on December 1, the inventory valuation was 150 won 351 00:23:00,959 --> 00:23:05,199 On December 3, there was no purchase, but 15 sales occurred 352 00:23:05,199 --> 00:23:10,399 At 150 won each, sales revenue was 2,250 won 353 00:23:10,719 --> 00:23:13,319 At that point, 5 units remained 354 00:23:13,320 --> 00:23:15,881 On December 6, 10 new units were purchased 355 00:23:16,119 --> 00:23:19,099 When calculating the average value of cost and quantity, 356 00:23:19,100 --> 00:23:25,489 On December 3, 5 remaining units at 150 won equal 750 won 357 00:23:25,489 --> 00:23:30,120 Adding the December 6 purchase of 1,100 won 358 00:23:30,120 --> 00:23:33,439 Dividing by 15 units in total 359 00:23:33,440 --> 00:23:36,500 results in a valuation of 123.3 won 360 00:23:36,959 --> 00:23:39,620 Up to this point, it is the same as the moving average method 361 00:23:39,621 --> 00:23:45,046 But on December 7, a sale occurred 362 00:23:45,046 --> 00:23:48,140 The cost of goods sold was 150 won 363 00:23:48,141 --> 00:23:51,361 Since 5 units were sold on December 7, 364 00:23:51,361 --> 00:23:55,939 the valuation then shifted to the December 6 purchase price of 110 won 365 00:23:56,379 --> 00:24:00,499 Since FIFO means first in, first out, 366 00:24:00,500 --> 00:24:02,400 it is easy to apply in the system, 367 00:24:02,400 --> 00:24:05,400 but in practice, it is quite difficult to manage 368 00:24:05,560 --> 00:24:10,220 The formula may look complicated, but it can be calculated with a simple equation 369 00:24:10,220 --> 00:24:12,580 Please keep this in mind as a reference for your work 370 00:24:13,480 --> 00:24:17,239 At SERVEONE, slow-moving stock is managed in four categories 371 00:24:17,240 --> 00:24:20,240 Normal, caution, inactive, and long-term unsold 372 00:24:20,599 --> 00:24:25,119 Normal means products with continuous sales within three months 373 00:24:25,119 --> 00:24:29,859 Caution means products with an average turnover exceeding 3 to 6 months 374 00:24:30,159 --> 00:24:34,539 Inactive stock refers to products with turnover exceeding 180 days, or six months 375 00:24:34,539 --> 00:24:38,139 Long-term unsold means products with no sales for more than six months 376 00:24:39,519 --> 00:24:43,640 Here, slow-moving stock specifically refers to inactive stock and long-term unsold items 377 00:24:43,880 --> 00:24:47,000 If we apply the ABC strategy 378 00:24:47,001 --> 00:24:49,941 Normal stock can be seen as A-grade, Caution as B-grade, 379 00:24:49,941 --> 00:24:53,059 and Inactive and Long-term unsold as C-grade 380 00:24:53,279 --> 00:24:55,919 To prevent slow-moving and caution stock from piling up, 381 00:24:55,919 --> 00:24:59,639 sales, purchasing, and logistics teams 382 00:24:59,640 --> 00:25:02,320 must set inventory strategies 383 00:25:02,320 --> 00:25:05,319 through Sales and Operations SCM meetings 384 00:25:07,239 --> 00:25:10,220 Transportation means the act of shipping goods 385 00:25:10,221 --> 00:25:14,481 There are three types: delivery, collection, and trunk-line 386 00:25:14,800 --> 00:25:19,619 Delivery is an external method that transports products from the center to the client 387 00:25:19,999 --> 00:25:24,699 Collection means receiving products from suppliers by vehicle 388 00:25:24,699 --> 00:25:28,940 and moving them into the center or directly to the client 389 00:25:29,240 --> 00:25:33,040 Trunk-line delivery is an external and internal method, 390 00:25:33,040 --> 00:25:36,320 moving goods between centers before delivering them to the client 391 00:25:36,680 --> 00:25:40,579 As learned earlier, trunk-line also refers to 392 00:25:40,579 --> 00:25:44,459 internal transport between centers or between hubs 393 00:25:44,819 --> 00:25:49,759 At SERVEONE, trunk-line transport is operated nationwide, with the Ochang Hub as the base 394 00:25:49,999 --> 00:25:53,019 Currently, there are eight 11-ton trucks, 395 00:25:53,019 --> 00:25:56,420 running across seven routes nationwide 396 00:25:56,940 --> 00:26:01,159 There are pure trunk-line moves to the main hub, 397 00:26:01,159 --> 00:26:03,859 and inventory balancing toward clients 398 00:26:04,139 --> 00:26:09,940 The main hub refers to the storage site or the primary shipping point where goods must be kept 399 00:26:10,420 --> 00:26:13,360 First, pure trunk-line moves to the main hub 400 00:26:13,360 --> 00:26:16,284 are based on hub inventory distribution 401 00:26:16,564 --> 00:26:20,084 The main purpose is to transfer stock to the main hub, 402 00:26:20,084 --> 00:26:24,104 or to move stock from a hub that has exceeded its capacity 403 00:26:24,104 --> 00:26:28,104 In such cases, logistics or purchasing staff may request stock transfers 404 00:26:28,564 --> 00:26:32,063 In addition, there are cases of pure trunk-line moves done for strategic reasons 405 00:26:32,323 --> 00:26:36,144 In Case 1, a supplier near the Gumi Hub 406 00:26:36,144 --> 00:26:38,444 delivers products A, B, and C 407 00:26:38,444 --> 00:26:42,324 The main hub for A and B is the Pyeongtaek Hub 408 00:26:42,324 --> 00:26:46,144 while the main hub for C is the Ochang Hub, 409 00:26:46,144 --> 00:26:51,064 A, B, and C received at Gumi Hub must be transferred to their respective main hubs 410 00:26:51,724 --> 00:26:56,064 In another case, if the main hub for product B is already the Gumi Hub 411 00:26:56,064 --> 00:27:01,064 the purchasing staff may still request a transfer through trunk-line movement 412 00:27:01,404 --> 00:27:06,804 As a note, pure trunk-line moves are not based on customer orders, 413 00:27:06,804 --> 00:27:08,623 so there is no separate order number 414 00:27:09,163 --> 00:27:12,163 Next is inventory balancing toward clients 415 00:27:12,643 --> 00:27:14,324 When a customer places an order, 416 00:27:14,324 --> 00:27:17,504 stock is moved to the hub that covers the customer’s delivery region 417 00:27:17,504 --> 00:27:19,764 This ensures the order can be fulfilled 418 00:27:20,024 --> 00:27:23,564 Even products moved by pure trunk-line transfer can become subject 419 00:27:23,564 --> 00:27:25,864 to inventory balancing if required by a customer order 420 00:27:26,124 --> 00:27:29,884 In the second case, when orders are placed 421 00:27:29,884 --> 00:27:32,844 for products A, B, and C stored at Gumi Hub, 422 00:27:32,844 --> 00:27:36,724 they are transferred by trunk-line to hubs near each client 423 00:27:37,064 --> 00:27:40,044 As I noted here, this process is based on customer orders 424 00:27:40,044 --> 00:27:44,684 Accordingly, products move step by step through trunk-line transfer and are then delivered 425 00:27:45,124 --> 00:27:49,124 As a note, because this trunk-line transfer is triggered by customer orders, 426 00:27:49,124 --> 00:27:51,264 each order has its own order number 427 00:27:52,104 --> 00:27:56,004 SERVEONE has direct vehicle delivery and courier delivery 428 00:27:56,004 --> 00:27:59,564 Delivery regions are set based on postal codes plus operating units 429 00:28:00,144 --> 00:28:04,444 For example, in region A with the same postal code, 430 00:28:04,444 --> 00:28:08,924 if customers belong to operating unit A and operating unit B, 431 00:28:08,924 --> 00:28:11,224 then according to sales requests, 432 00:28:11,224 --> 00:28:14,364 the region can be classified as either direct delivery or courier delivery 433 00:28:14,664 --> 00:28:18,044 Another example is, in region B, with the same postal code, 434 00:28:18,044 --> 00:28:20,844 if operating units C and D belong to the same client, 435 00:28:20,844 --> 00:28:25,264 then delivery is managed by either direct vehicle or courier, depending on the request 436 00:28:25,704 --> 00:28:29,364 Most sales requests for regions can be accepted, 437 00:28:29,364 --> 00:28:31,044 but in some cases, existing regional settings 438 00:28:31,044 --> 00:28:36,464 may require either direct delivery or courier delivery 439 00:28:36,844 --> 00:28:39,164 In the middle chart of regions, 440 00:28:39,164 --> 00:28:41,984 you can see the division between direct delivery areas and courier areas 441 00:28:41,984 --> 00:28:45,264 If a region overlaps both direct delivery and courier delivery, 442 00:28:45,264 --> 00:28:48,284 then the requested method can be accepted 100% 443 00:28:48,484 --> 00:28:50,724 In the delivery process by type, 444 00:28:50,724 --> 00:28:54,704 both direct vehicle and courier regions follow the same picking and packing 445 00:28:54,704 --> 00:28:57,484 After packing, direct vehicle regions go through loading inspection, 446 00:28:57,484 --> 00:29:00,224 while courier regions proceed with invoice issuing 447 00:29:00,664 --> 00:29:05,563 A special case is when capacity in a direct vehicle region is exceeded, then an extra chartered vehicle is arranged 448 00:29:05,563 --> 00:29:10,823 For courier regions, if they refuse collection, a chartered vehicle is also arranged to complete delivery 449 00:29:11,323 --> 00:29:13,903 Courier companies may refuse collection 450 00:29:13,903 --> 00:29:17,703 for hazardous materials, flammables, aerosols, 451 00:29:17,703 --> 00:29:21,063 unpackaged items, or bulky goods 452 00:29:21,403 --> 00:29:25,623 Finally, all deliveries must be completed by D+1 453 00:29:25,623 --> 00:29:29,123 Direct vehicle delivery is based on on-desk delivery 454 00:29:29,323 --> 00:29:32,964 Thank you for listening to this lecture on delivery 455 00:29:33,264 --> 00:29:35,524 If you have any questions after the lecture, 456 00:29:35,524 --> 00:29:40,104 please feel free to contact me anytime 457 00:29:40,264 --> 00:29:41,184 Thank you