‘gloB,’ a program that compressed Lotte’s 35-year know-how of logistics management
Handling volumes that almost doubled in the past few years without any problem
The current systems and infrastructure of Lotte Duty Free Shop resulted from its employees’ know-how based on long years of experience. In particular, this advantage stands out in logistics management. Interestingly, ideas from field staff, not instructions from top, are directly reflected. If any inconvenience or inefficiency is detected at work, they immediately find another method and implement it. They never miss details, e.g. the order of putting items and changing the arrangement order, and keep modifying them.
Photograph=Kim Seon-ho/ A logistics center employee stacking the warehoused bonded goods
‘gloB’ is the integrated logistics data processing program of Lotte Duty Free Shop that resulted from this process. As its sales sharply increase every year due to the inflow of Chinese tourists, Lotte spent about KRW20 billion two years ago to revamp the overall system. Lotte improved efficiency by linking its own duty free shop inventory management system (inventory management using the business accounting system, management of in/out records between storage warehouses and shops, etc.) and the customs’ bonded goods inventory management system. What used to basically go through two or three steps, such as in/out records of bonded goods and the customs declaration procedure can now be applied to all parts at once with single data entry thanks to the introduction of gloB.
The name of this systematized program comes from ‘global duty free shop+business.’ It reflects Lotte Duty Free Shop’s will to build an advanced logistics system necessary for its advance into the global market. As its name was selected through an internal contest, employees are very proud and fond of it. A Lotte Duty Free Shop insider said, “As the logistics volume sharply increased because our sales increased by 20~30% every year, it is difficult to accurately compare efficiency numerically. Compared to a few years ago, however, the new system can handle the explosive increase of logistics volume, proving its high efficiency.”
Photograph=Kim Seon-ho/ Bonded goods are sorted by item in the depot.
Meanwhile, the Lotte Duty Free Shop Logistics Center vendors are also lavish with their praise of the gloB program. What Lotte Duty Free Shop introduced in logistics is always most up-to-date. They say that Lotte Duty Free Shop’s infrastructure stands comparison with any other in Korea and the world. “As the existing ERP system had many conflicts with the customs’ inventory management system, there were many errors. In charge of logistics management, we were embarrassed on many occasions,” said an official from a vendor that directly participated in system implementation. “Since the introduction of the gloB program, however, all data, such as ordering, sales volume, inventory of the logistics warehouses and in/out records, were linked, and thus errors were drastically reduced, and work efficiency was greatly improved.”
Like this, the strength of gloB is that field workers were directly involved in the program development. In general, we apply what program developers made, check errors, make modifications and supplement. However, Lotte implemented the program based on employees’ opinions from the development stage, and established an efficient system for logistics from the basic frame. It was an essential choice for improving the convenience of employees who manage the logistics center that handles over 230,000 items. A Lotte Duty Free Shop Logistics Team insider said, “As a result, we could greatly reduce the test period, and drastically reduce the degree of change felt by field workers after actual application.”
On the other hand, it is pointed out that the gloB system needs to be more flexible and scalable to handle more logistics. It is an important task to establish the duty free distribution system in logistics in order for Lotte Duty Free Shop to be in the global top class earlier than planned. If Lotte makes a logistics system guide that can be used throughout the world, it may be expected that Lotte can export the logistics system, the basic infrastructure of the duty free industry, beyond the marketing aspects. A Lotte Duty Free Shop Logistic Team insider said, “To implement a perfect logistics system that employees themselves can be proud of, we will listen to the voice of employees more attentively,” declaring the will to make a more advanced model.
