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LG CNS to build Malaysia’s first automatic logistics processing center

LG CNS is set to build the Integrated Parcel Center of PosLaju, a leading parcel delivery service company in Malaysia

LG CNS will build the first automatic logistics processing center in Malaysia using a Korean logistics processing solution.

말레이시아__LG_CNS

LG CNS will build the first automatic logistics processing center in Malaysia with the VivaSorter, a cross-belt sorter solution that was developed for the first time in Korea by LG CNS. This photo shows a complete view of the VivaSorter demo line for the final logistics solution test that was held in Korea before establishment of the system in Malaysia.

LG CNS competed with its global European competitors and received the best technology score, demonstrating its prowess

LG CNS (CEO Kim Dae-hoon) won a contract to build the Integrated Parcel Center (IPC) of PosLaju[1], the largest parcel delivery service company in Malaysia that was privatized. LG CNS will fully commence the establishment of the system soon. Last week, LG CNS completed in Korea a final logistics solution test before system construction in Malaysia. The test was attended by COO Ahmad Najmi Bin Mahfodz of PosLaju and officials from the two companies. This project amounts to 20 million ringgit (around 7 billion won), and completion is slated for May 2015.

The PosLaju IPC will be Malaysia’s very first automated logistics processing center. In Malaysia, all parcels have been categorized manually. A decision was made to build an automatic logistics processing center to more efficiently handle the sharply increasing volume of parcels[2] stemming from the spread of electronic commerce and other factors, and to overcome the high-cost and low-efficiency of manual processing. PosLaju plans to build around ten logistics network systems throughout Malaysia, starting with this project.

viva

LG CNS will build the first automatic logistics processing center in Malaysia with the VivaSorter, a cross-belt sorter solution that was developed for the first time in Korea by LG CNS. Officials of PosLaju in Malaysia are testing the driving area of the sorter.

LG CNS applied VivaSorter, a key logistics processing solution that the company successfully localized, and proved its world-leading technological prowess. LG CNS ranked first in the technology score in this tender, participated in by global logistics solution providers from Europe, and proudly won the contract for the project.

The VivaSorter of LG CNS is a Crossbelt Sorter (CB Sorter) solution that was successfully localized for the first time in Korea. The CB Sorter is a key next-generation logistics processing solution that maximizes freight-processing efficiency of a logistics processing center through high-speed, automatic categorization of freight. The VivaSorter of LG CNS is expected to bring about import-replacement effects of at least an annual 50 billion[3] in the Korean logistics processing market, which is 100% dependent on foreign-made CB Sorters.

LG CNS is the first Korean firm to localize the CB Sorter, a key logistics processing solution, and expects an annual import-replacing outcome of KRW 50 billion

LG CNS has, through various projects, actively contributed to Malaysia’s development as an Asian business hub, including the ▲ establishment of a monorail platform screen door system in Kuala Lumpur in 2011, ▲ establishment of an urban railway communication system in Kuala Lumpur in 2012, and ▲ export of VIVAPOST, a postal logistics information management solution, in 2013. This is in line with the overseas business strategy of CEO Kim Dae-hoon which involves expanding the company’s business through major bases in different regions. LG CNS plans to further advance into overseas markets, including the rapidly growing parcel delivery service and logistics market in China[4] and the market in Southeast Asia by effectively leveraging the VivaSorter. Korean logistics centers are dependent on foreign-made CB Sorters, whose technologies were first proven overseas. Korean logistics centers are now expected to actively use the VivaSorter.

CEO Kim Dae-hoon of LG CNS said, “LG CNS has fully established itself as a reliable partner for logistics companies in Korea and abroad by offering total IT services and solutions for logistics centers. Through the VivaSorter, LG CNS will do its best to bolster the competitiveness of the Korean logistics industry and take the lead in exporting Korean logistics IT.”

With Malaysia at its base, LG CNS is expanding into Southeast Asia, including the rapidly-growing Chinese parcel delivery service & logistics market

The VivaSorter of LG CNS was an outcome of joint growth between a large corporation, small- to mid-sized company, and a public organization. LG CNS accumulated logistics IT through various projects, including the postal logistics system and the Jeonju Mail Center project, as well as active support from Korea Post. Based on these technologies, LG CNS worked closely together with Hankook C&S (CEO Kim Tae-yeong, www.hcns.co.kr), a company specialized in conveyor facilities, to develop and export a globally competitive Korean CB Sorter solution. LG CNS took charge of investment and software development, while Hankook C&S handled hardware production.

[Reference] Significance of the successful localization of the CB Sorter, an essential solution for a logistics processing center

The CB Sorter is a cutting-edge automatic freight categorization solution. Most of the newest freight processing centers in Korea use the CB Sorter. The older tilt sorter drops freight by tilting a tray that runs on a belt. If a foreign substance gets stuck on the tray, there can be many errors and problems when discharging freight, and the tray requires frequent cleaning. Two belt trays need to be used to process one large piece of freight, which compromises processing performance. The tilt sorter, obviously, has many shortcomings. In contrast, the CB Sorter has another belt (cross belt) that is embedded and turns left and right. This belt forcibly drops freight. The CB Sorter has none of the shortcomings of the tilt sorter, thus allowing quicker and quieter freight classification.

All of the CB Sorters presently used in Korea are foreign-made. Some of the tilt sorters in Korea are made in the country. However, it is difficult to use these Korean-made tilt sorters at places that require processing of heavy freight, such as parcel service terminals and mail centers. Several Korean companies attempted to localize CB Sorters but failed because of their lack of facility control software technology and source technology for hardware production. For this reason, Korea was dependent on foreign-made facilities and, thus, incurred high import costs. In addition, considerable time and funds were needed for facility maintenance and performance improvement. Being so dependent on foreign technology, Korea suffered a significant outflow of foreign currency.

By commercializing the VivaSorter and successfully exporting it to Malaysia, LG CNS has made two accomplishments at once in that it has achieved CB Sorter import-replacement effects and has launched overseas exports of a Korea-made solution. The VivaSorter of LG CNS has brought together several benefits of previous CB Sorter products, including the application of a general-purpose PLC (Programmable Logic Controller), minimization of cables through wireless communication, and a self-diagnosis function. Its real-time web-based monitoring function is assessed to be more advanced than that of other products.

The arrangement of all components of a logistics processing center depends on the CB Sorter. The CB Sorter is the so-called ‘killer solution’. The effects of localization in the logistics processing center facility and system market, which is worth an annual KRW 1.2 trillion[5], are expected to be significant.

Written by LG CNS PR Center

[1]: PosLaju is a parcel delivery service company under Pos Malaysia Berhad, which corresponds to the post office in Korea. Pos Malaysia Berhad was once a government-run enterprise but was privatized. [back to the article]

[2]: PosLaju is a parcel delivery service company under Pos Malaysia Berhad, which corresponds to the post office in Korea. Pos Malaysia Berhad was once a government-run enterprise but was privatized. [back to the article]

[3]: According to the logistics industry, logistics processing centers in Korea imported around KRW 300 billion worth of CB Sorters. Annual new demand for import is estimated at KRW 50 billion.
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[4]: China’s parcel delivery service and logistics market was the world’s third largest in 2012, following the US and Japan. The nation’s daily number of parcels handled reached 13 million in 2012, indicating annual average growth of 27%. The annual number of parcels handled in 2015 is forecast to exceed 6.1 billion. (Jinghua Times, 2012)
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[5]: Outcome of analyzing sales of major logistics facility companies in Korea (As of 2012, Internal analysis of LG CNS)
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