Expert Column Supply Chain Risk Management through Global Control Center

In the global logistics field, situations that can hinder logistics efficiency and causes economic losses can occur at any time due to various supply chain risks such as natural disasters, geopolitical issues, strikes and bankruptcies, and pandemics. Recently, these risks have become more diverse and complex, increasing the factors that threaten the stability of supply chains.

Therefore, proactively addressing these risks is essential for the sustainability and competitiveness of businesses. To effectively manage these diverse risks, companies must enhance supply chain visibility, build resilient supply chain structures, and establish comprehensive risk management strategies. In order to effectively manage cascading global supply chain risks, it is important to have a system to quickly identify and respond to events occurring around the world. This is essential to ensure the continuity of logistics operations and to equip companies with the ability to respond swiftly to unforeseen situations. GCC-based Risk Monitoring The Global Control Center (GCC) of Samsung SDS is its risk management infrastructure built at the headquarters to monitor shipping status around the world and quickly respond to unexpected events. Since the early years of logistics business of Samsung SDS, GCC has been the key part of its global logistics operation.

The GCC currently plays a crucial role as a control center that integrates and manages global logistics anomalies in real-time. This center detects global logistics risks in advance to minimize them and quickly disseminates automatically detected risks. Additionally, it monitors ship anomalies to effectively manage accidents or arrival delays. By observing port congestion and information on storage and entry/exit of containers through global port monitoring, it supports optimal logistics operations. These integrated control functions enhance the stability and efficiency of the global logistics network and enable smooth operations even in emergency situations through rapid response.

1. Logistics Risk Management
The risk types are categorized into 3 major categories (19 subcategories) and further subdivided into 5 transportation modes, resulting in a total of 47 Risk Category Maps. These maps define and classify the risks that can arise from unexpected natural disasters and incidents/accidents in logistics operations. First, incidents include political/social issues or economic factors that adversely affect the logistics operating environment and conditions. For instance, political/social issues like the recent Russia-Ukraine war or the Red Sea crisis, strikes by logistics related personnel, bankruptcies of clients or logistic service providers, and port/airport system failures fall under this category.

Risk sensing is conducted based on predefined risk types and keywords. It begins by collecting 60,000 news articles and RSOE disaster information daily from around the world. Using machine learning technology for sentence similarity analysis, approximately 750 articles with a high likelihood of leading to logistics risks are selected. From these 750 articles, around 70 risks that require focused management are further filtered, and the severity of each risk is assessed.

The severity assessment is conducted by training a language model with approximately 20,000 past risk incidents and their severity levels, enabling the AI to automatically evaluate the severity of current risks. The risk sensing system categorizes potential logistics risks into three levels for management.

Level 1 includes situations where logistics emergencies are imminent or already occurring, such as airport closures or rail/port strikes. Level 2 encompasses cases where there may be an impact on logistics, such as typhoons or floods, but detailed review is required to determine the actual impact. Finally, Level 3 includes temporary logistics disruptions expected due to factors like anticipated strikes from labor disputes or port congestion due to structural issues. This categorization allows for effective resource allocation and more efficient management of logistics operations based on the severity of the risks.

The analyzed risks are promptly communicated through the 24-hour operational Control Tower. This 24/7 integrated control system plays a role in comprehensively monitoring logistics operations and detecting any operational anomalies. The risk system manages incidents based on their risk level and calculates the impact on logistics volumes by risk type. It also swiftly responds to anomalies based on predefined scenarios, implementing standard processes to manage field and customer responses, and shares global supply chain risks with customers.


2. Ship Irregularity Management
The Samsung SDS GCC’s vessel anomaly monitoring system focuses on minimizing logistics disruptions by automatically detecting and preemptively addressing anomalies through real-time analysis of vessel positions and movement paths. For instance, if the vessel suddenly stops, where it does not move for a set period (12 hours), the system detects this anomaly. Once detected, the information is immediately relayed to the relevant department, and the shipping company is notified. If the situation is confirmed as an anomaly, a response plan is formulated and shared with the customer.

In addition, if there is an urgent position movement of more than 180 degrees during a certain period of time (within 3 hours), this is detected as a quick turn of the ship. The detected information is then communicated to the relevant department and the shipping company for verification. Upon confirmation of the anomaly, a response plan is developed and shared with the customer. This system contributes to minimizing logistics disruptions and providing transparent and reliable service to customers by identifying potential issues early and responding swiftly. Through this approach, companies can proactively detect and minimize logistics risks, ensuring stable logistics operations.

3. Port Congestion Monitoring
Congestion at U.S. ports has increased during the pandemic, significantly impacting supply chains. This congestion caused extreme delays and disruptions in logistics operations. Samsung SDS’s port congestion monitoring plays a crucial role in predicting congestion based on the number of vessels near the port, thereby minimizing disruptions in container pickups due to berthing delays. This system uses AIS information to analyze in real time the number of container ships within the geo-fence (outer port/berthing area) and intensively monitors highly congested ports. For this, it considers the number of arriving and departing vessels, the number of waiting vessels, and the average waiting days for the outer port. For the berth area, it considers the number of berthed vessels and the average berthing days.

Managing congestion levels for global ports involves monitoring the port congestion index and the number of arriving and departing vessels. This system helps optimize logistics flow and allows for early prediction and swift response to potential delays at ports, thereby minimizing logistics disruptions. Port congestion monitoring plays an essential role in enhancing the stability and efficiency of global logistics operations, establishing itself as a crucial tool for maximizing the efficiency of logistics management

Making Timely Decisions through GCC 1. System-Based RISK Timely Response
To manage delays in international transportation, the most fundamental task is to continuously monitor the In/Out bound ETD/ETA delay status. Additionally, by utilizing the 'My shipment' feature for each global branch, operator, and customer, we can check tracking data and prevent missing data. This allows us to quickly identify delays and provide timely guidance and responses to our clients.

It is not easy to extract meaningful data from the information and data that pours out every day. This is because the process of selecting and purifying data sometimes involves a lot of manual work. To minimize manual work in logistics operations and increase work efficiency, Samsung SDS is utilizing generative AI technology. Samsung SDS' digital forwarding platform stores a vast database and logistics expertise. By connecting DB and logistics expertise stored in the digital forwarding platform as well as external information to generative AI, logistics operators can perform necessary tasks through a single generative AI interface without going through multiple channels and systems.


2. Emergency Standard Process
Samsung SDS divides response situations into five stages, considering the risk progress and impact on logistics operations. This Emergency Standard Process consists of a total of 5 steps, 8 tasks, and 18 activities.

- [Step 1] Sensing (White): This step involves recognizing the possibility of incidents or accidents occurring. A decision must be made to raise the level of interest within 24 hours of recognition.
- [Step 2] Watching (Yellow): In this step, logistics operation disruptions are anticipated due to incidents or accidents, but there is no direct impact on current operations. After being upgraded to the level of interest, the risk-impacted cargo is identified and verified. Additionally, the operators continuously check and monitor risk situations and report them to customers.
- [Step 3] Caution (Orange): This step indicates that logistics operation disruptions are imminent or have already occurred. Establish a war room to identify impacted cargo, deadlines, and lead times, establish alternative plans, and propose them to customers.
- [Step 4] Serious (Red): This step involves complex and long-term logistics operation disruptions. Extensive response measures are required, and long-term solutions are developed.
- [Step 5] End (Blue): In this step, logistics operation disruptions are no longer occurring. We deactivate the war room and report the stabilization of operations to the customer. Subsequently, to respond more quickly to similar situations in the future, we compile and disseminate case studies of the response, and conduct training sessions.

Risk management is essential in today's complex global supply chains. Through End-to-End global supply chain risk management, seamless visibility can be achieved, allowing for the optimization of the global supply chain. It is impossible to completely eliminate risks from the supply chain, as risks can occur at any time. The key is to detect risks as quickly as possible and to respond promptly and effectively at every stage of the supply chain.

To this end, Samsung SDS manages supply chain risks through a response system through an immediate detection and response system that utilizes abnormal situations, a system-based operational status dashboard, key indicators related to operations, and a visibility portal. Samsung SDS's GCC (Global Control Center) centrally monitors and manages risks and anomalies occurring worldwide. The GCC system supports real-time identification and response to issues in any part of the supply chain. This allows companies to minimize the impact of risks and maintain the stability of their supply chains. In the face of rapidly increasing global risks, the flexibility and resilience of the supply chain will be the foundation and core of a company's stable growth

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