Ceva Korea seeks core values of integration to the industry

"Trying to get over simply providing logistics service"

cheol min, Kim / young il, Hahn

 

[CLO] Ceva Logistics Korea, a total logistics company led by Kim Myung, Country Managing Director, has been keeping annual average growth rate of over 20% despite the sharp fall in cargo traffic caused by global economic recession.

 

The company was formed in 2007 through merger of EGL(Eagle Global Logistics Inc) and TNT Logistics.  Recently we had an opportunity to interview Mr. Kim and asked some questions about Ceva.

 

Q. Ceva is known to have unique customer management skill and you developed your own programs, Century Accounts and Century Digest. What are these all about?

Ceva's vision is to become the most admired company in the logistics industry exemplifying Unity, Growth and Excellence. Certainly the object should be the customers. Century Accounts signifies that the very best logistics solutions are provided to about 100 selected customer companies by means of Ceva's specialized business competency. To achieve this, Ceva formed a task force team and supports their customers so that they can create best quality and value. Furthermore, Ceva is providing their 'Century customers' with useful information such as industrial trend, news from logistics industry and Ceva's activities and so on by publishing 'Century 100'.

 

Q. We've heard of your 'ZDS' program. We imagine it should be done based on the trust between customers and service providers. What process is to be followed?

ZDS literally means 'Zero Defect Start-up', which is a typical customer management program controlled by the Global head office. Once a contract is made with a new customer, the program generates the customer-oriented service level and work process in the way of matching up customer's work with Ceva's main checklists, which are standardized to the global level.

As for a new customer, Ceva determines whether ZDS should be applied or not considering its annual sales and service regions. If ZDS is positive, there will be a check on ▲Global/Regional ▲ZDS Project Sponsor by country ▲Work Stream Leader. Every item will be checked in detail at least for a month through weekly conference call. That is to complete all SOP(Standard Operating Procedure) before the beginning of their business.

Even after inauguration of the business, SOP that was drawn up through ZDS as well as the changes will be monitored for the next couple of months and its weekly reports should be checked by project managers of each region and country.

 

Q. Ceva has introduced Toyota's 'Lean' methodology to the process of logistics service, but Toyota's SCM, particularly JIT seems to have reached the limit. Do you still think 'Lean' management style is the best way?

Ceva might be the only global logistics provider to integrate 'Lean' methodology into logistics industry. Certainly JIT(Just in time) concept is revealing the limit in many ways, for instance, disclosure of a series of Toyota's quality and production control problems.

Although quality control and JIT delivery are the important elements, the core of Toyota's 'Lean' system that Ceva is seeking focuses on the work and productivity improvement over the whole business process meeting customers' demands.

 

Q. When John Pattullo, a CEO of Ceva group, visited Korea last July, he expressed his interest in M&A of Korea Express Co. and transport of supplies for Pyeongchang Winter Olympics. Are you thinking about M&A aiming at North East Asian market including Korea?

Having grown through M&A, Ceva still leaves room for further M&A. But for the moment, we are putting the emphasis on solidifying our sales base as a global logistics service provider.

 

Q. Ceva is famous for its specialization in automobile logistics. What do you think is the background of getting such competitiveness?

Ceva has been recruiting the experienced staff and training them to be more specialized experts. It is not an approach to the industry of automobile and auto parts simply from the logistics point of view, but a sort of nurturing specialists throughout the auto industry by participating in diverse conferences in the world and thus collecting related data and information.

For now Ceva Korea is concentrating on air, sea and inland transport of auto parts as well as operation of sea export cargo consolidation centers. However, we plan to expand our service areas to manufacturing, procurement logistics and automobile logistics in the future.

 

Q. Ceva is considered to be one of the typical non-asset based enterprises like Kuehne & Nagel, Agility etc. In this case, I think it is important to have partnership with global sea & air carriers, not to mention shippers.

Ceva is not considering transformation into asset based compound enterprise even in the years ahead. We are going to strengthen partnership with global carriers though. It is because both sides(companies) would be able to seek win-win strategy and to provide customers with a high quality service through such partnership.

 

Q. Could you give us your opinion about overall trend in logistics market, for example, UPS's merger of TNT?

Recent case of UPS's merger of TNT is being spotlighted in the sense of establishing a bridgehead in European market. This merger might pave the way for sharp increase in the weight of UPS's overseas business sales within Europe. Even if such a change in market share could attract the attention of main competitors, it is hard to expect rapid market change for the moment.

Its impact on Korean market may not be big as well because rival companies will tighten caring for their shippers as much. I predict such market reshuffling could continue to some degree, even though it is not that easy to anticipate it will be done by who and when. "Ceva Korea is concentrating on air, sea and inland transport of auto parts as well as operation of sea export cargo consolidation centers for now. However, we plan to expand our service areas to manufacturing, procurement logistics and automobile logistics in the future."

 

Excellent choice of industries!

A winning strategy for Ceva Korea?

This is the 5th year since Ceva Logistics Korea emerged as a total logistics company by merger of EGL(Eagle Global Logistics Inc) and TNT Logistics in 2007.  

 

The company name 'Ceva' is originated from Italian mathematician 'Giovanni Ceva', whose theorem is quite well known to the students working at math. His theory about triangle figure combined with corporate philosophy led to the name Ceva.  

 

The Netherlands-based group has a world-wide logistics network at more than 1,200 offices over 170 countries with 51,000 staff. In Korea, there are offices in Seoul Mapo(head office), Inchon airport, Busan and Koje as well as logistics centers in Gimpo airport, Ansong and Jinhae newport, where total 140 staff are working.

 

Ceva Korea was even awarded 'Country of the Year', a prize given by the AP head office. Ever since the global recession, domestic freight forwarders' sales result have been in deficit whereas Ceva Korea has been showing outstanding growth.  

 

Analysts say it is because Ceva concentrated on service and sales after strategic selection of the industry groups. Actually Ceva Korea focused on electric & electronic industry in 2010 and the next year transferred their service competency to auto parts. It was the result of the strategy towards selection of target industries while monitoring economic and industrial situations every year. Another success factor might be the expansion of business activities to contract logistics area along with the growth of bulk cargo transport and energy related industries.  

 

Service sectors Ceva provides are divided into Freight Management and contract logistics services. Freight Management service includes global sea & air transport service, customs clearance service and inland transport service. Contract logistics service covers warehousing, delivery, distribution, stock management and hub control of vendor managing inventory(VMI) etc. Meantime, Ceva Group is reported to have recorded 1,712 million euros of sales revenue in the first quarter of 2012 in spite of difficult market conditions, up 2% compared to the same period of the previous year(1,686 million euros in 2011), based on good performance in ocean business and particularly in contract logistics service driven by excellent performance from the automotive and industrial sectors. 

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