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					   Using ICT to reach the people

             (November 14, 2006)

                                Joong-Yeon HWANG
                             President of Korea Post

                                    KOREA POST
KOREA POST                                             1

         Korea Post and Changes in Environment
           Korea Post at a Glance
           Changes in Postal Business Environment
           The Management Strategy of Korea Post

         Customer Satisfaction and ICT
             Changing Needs of Postal Customers
             3 Innovation Strategies for Customer Satisfaction
             The Applications of ICT for Customer Satisfaction
             The results of application of ICT

         Future of Korea Post

 KOREA POST                                                       2
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Korea Post and Changes in Environment

                           KOREA POST
                                 KOREA POST
Korea Post at a Glance (2005)

         Business Scale
                                                                                  (Unit : Billion USD)
            Postal Service                        Postal Financial Service (Monetary Fund)
        Volume              Revenue               Total               Savings          Insurance

       4.8 Billion              1.9                57                    37                 20

  Earnings and Expenses                                     Organization and Personnel

739                                                 Postal outlets
              Postal Banking                             858       General
                 Service     Total                                 offices      Full time staff
                                                     Special        2,054           36,295     Part time staff
                     73.9                            offices                                        6,317
                                  67.4                770

- 65                                                    Post offices : 3,682     Employees : 42,612
       △6.5                 (Unit : Million USD                                  (Postmen : 15,776)

       KOREA POST                                                                                         4
Changes in Postal Business Environment

       • Changes in main consumers
       • Diversification of service channels
       • Necessity of quick response to customer   Diversified &
         needs                                       advanced                 • Increase in alternative communication
                                                     Customer                   tools
                                                                              • Rapid growth of electronic commerce
                                                      Needs                   • Increased use of electronic banking

                                 Postal                Demand             Diffusion
                                 Market              alternatives             of
                             Liberalization           in order to        the Internet
                                                    to strengthen
• Decreased monopoly on letter mail
• Expanded strategic alliance between
  Posts and private couriers
• Trend of low interest rates in financial         Competition
  market                                              with
                                                     private       • Rapid growth of home delivery market
                                                     sector        • Increase in demand for EMS
                                                                   • Expansion and diversification of financial

   KOREA POST                                                                                                           5
The Management Strategy of Korea Post                                               u-POST 339

  Vision                   Postal Service, the People’s Love

                       Universal Service                           Managerial Autonomy

                                            3 Innovation Strategies

3 Execution
                 Welfare Enhancement       Labor-Management Cooperation   Performance-based Compensation

 9 Policy     Enhancing Competitiveness       Improving Quality of               Establishing
   Tasks           of Postal Service         Postal Financial Services     Management Accountability

     KOREA POST                                                                                      6
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Customer Satisfaction and ICT

                                KOREA POST
Changing Needs of Postal Customers

 Diversity and complexity of customer needs in postal service

                                       Stability                        Convenience

                                                         +          Diversity


 Use as opportunities to create added value
     Development of customized products and services for various and segmented
    customer needs
     Continuous change and innovation for CS : Postal office call center, compensation
    system for customer dissatisfaction, operation of voice of customer(VOC) system etc.

  KOREA POST                                                                               8
3 Innovation Strategies for Customer Satisfaction

  Customer Service Innovation → Until it satisfies Customers

   Service Standization         Service Education     Customized Service Collecting of Customer
                                   Service academy    Real-name system    Meeting of customer
    Customer contact point
     and situational response      Educational        Post office call     representatives
                                    facilities          center              Compensation system
                                                                             for customer dissatisfaction

 Business Model Innovation → Customer-Wanted Service
      Shopping malls and online postal service through e-POST (]
      Focused on promising strategic products such as door-to-door delivery,
      international express mail (EMS), electronic banking etc.

 Process Innovation → In a Way Customers Want
      Enterprise-wise implementation of 6-sigma, launch of e-delivery notice,
      advanced electronic banking channels
      Increased productivity though improvement of working environment

  KOREA POST                                                                                        9
The Applications of ICT
    for Customer Satisfaction (A)                                         Postal Logistics System

 Development and Operation of Postal Logistics System (PostNet)
    Informatization of end-to-end mail handling process
    Web based postal logistics system enabling connection to internal/external

 Effects of Development
       Diversified      • Providing environment that enables reception of bulk mail through system-
       Reception          to-system connections or the internet
        Channels        • Operating unmanned mail reception and Internet reception system

      Real-Time         • Providing more than 8 stages of track & trace information in real time
     Mail Tracking      • Real-time monitoring of mail handling status and unexpected incidents

      Reduced           • Digitalization of delivery : All postmen equipped with a PDA
     Workload for       • Shortened time taken to fill out form of delivery notice and to enter delivery
      Postmen             results by one hour a day

      Customer          • Instant notification of expected delivery time and delivery results to
      Satisfaction        customers’ mobile phones using SMS

        Driven          • The ability to automatically compute the total mail volume in real time

    Korea Post : The first public institution to have been certified CMMI level 3, an international quality
                 certification for IT (August, 2006]
  KOREA POST                                                                                                   10
The Applications of ICT
    for Customer Satisfaction (B)                                    Internet Post Office

 Deployment and Operation of Internet Post Office (

     Operating shopping malls
     Supporting online postal service (door-to-door delivery, EMS, e-mail
      reception system)

 Effect of Deployment
     Customer    • Providing internet users [34 million) with postal services environment
                 • Boosting image of Korea Post as e-biz enterprise
                 • Contributing to national economy by promoting regional economic

     Enhanced    • Achieving competitive advantage in door-to-door delivery and EMS though
     Products      pick-up reservations and internet tracking service

     Increased   • Online postal service : 2.6 million USD
      Revenue    • Shopping mall : 41.2 million USD                     (As of December, 2005 )

  KOREA POST                                                                                      11
The Applications of ICT
    for Customer Satisfaction (C)                                                Mobile Banking

 Deployment and Operation of Mobile Banking
   • Mobile banking service : Various kinds of banking (transaction inquiry, transfer account,
     bill payment, cash withdrawal) and postal (track & trace, request for door-to-door delivery)
     services are available anytime and anywhere by using mobile phones

 Mobile Banking Service

                                               Deposit                      Deposit
                                               Details                      Inquiry
                                                Menu                         Result

 Effects of Deployment
       Expanded      • Increasing electronic banking customers through mobile banking
   Customer Channels   services

     Strong Brand         • Strengthening innovative, future-oriented brand Image using advanced
         Image              ICT

      Competitive         • Selling more financial products and generating revenues through various
      Advantage             customer channels

  KOREA POST                                                                                          12
The Applications of ICT
    for Customer Satisfaction (D)                           Post Office Call Center

 Deployment and Operation of Postal Office Call Center
  • Operating a centralized post office call center based on CTI (Computer
    Telephony Integration) since 2003, and now staffed by 320 agents handling
    customer complaints

 Effects of Deployment

    One-Stop     • Standized and immediate handling of
     Service       customer complaints

    Reflecting   • Improvement of business process
                   through segmented analysis of customer
   VOC in work     needs

                 • Maximized management efficiency of
   Handling of     dealing with customer dissatisfaction
   Complaints      through evaluation and feedback based
                   on VOC system

  KOREA POST                                                                     13
The Applications of ICT
    for Customer Satisfaction (E)                        Strategic Enterprise Management (SEM)

    Deployment of IT-Based Enterprise Resource Planning (ERP) System
                                     Executive Information
                                         System [EIS)

     Cost Management System               Management               Performance Management
             [ABM)                        Information                    System [BSC)

             Accounting Management                            Human Resource
                     System                                  Management System

   Effects of Deployment
       Basis for     • Real time acquisition of management information
      Management     • Speedy and active strategic management

      Management     • Providing information regarding efficient and transparent budget
      Transparency     management and financial performance

                     • Distributing objective management evaluation information between post
       Evaluation      offices

    KOREA POST                                                                                 14
The Applications of ICT
    for Customer Satisfaction (F)                          The Others

   Internet plazas as local information centers at 2,780
   post offices nationwide
    To bridge the information gaps existing between
   regions and social classes

   ‘My Own Stamp’ service
    To offer customized services, which prints what
   customers want including personal photos, corporate
   logos and advertisements etc.

   Launch of Post Guide Robot trials
    To install one uPostmate robot in the Kangnam post
   office, Post Guide Robot in the Buchun post office
    Supporting Services : greeting, reception windows
   guidance, zip code guidance, promotion of postal and
   financial products etc.

   KOREA POST                                                      15
The Results of the Application of ICT (A)

   Competitive advantage in strategic products(registered parcel and EMS)
                                                                          (Unit : Million USD)

                                             1,620                            237
         Total Revenue                      (15.6%)
  (Ratio of Strategic Products)    1,417                                              Parcel
                                                                 200                 (registered)
                 (11.3%)                               168
                70                  88

                  2000            2001      2002      2003      2004         2005

  KOREA POST                                                                                        16
The Results of the Application of ICT (B)

   Results of Management for CS

   Ranked 1st for eight years in a row in the public service sector of KCSI
    (Korean Customer Satisfaction Index) surveys (’99-’06)

   Ranked 1st for four years in a row in the field of door-to-door delivery
    service in a survey conducted by KCSI (Korean Customer Satisfaction
    Index) (’03-’06)

   Won the 1st prize for the 6-sigma management Awards in Korea(’06)

   Received prizes for 2006 World Mail Awards : PostNet (Technology),
    ePOST (e-Commerce)

   Supporting postal IT companies to enter foreign markets.

  KOREA POST                                                                   17
     마스터 제목 스타일 편집
The Future of Korea Post

                           KOREA POST
The Future of Korea Post                                                      Realization of RFID Based u-POST

                                                2006. 2           Foundation for Total Logistics Service

                2004. 7        Increased Competence for 3PL                          u-POST

Informatization of Postal Logistics
                                               c-POST                            4
                                                       3            Intelligence
                                                        Advancement   u-Logistics                           II RFID/
                               2                                                 •Realize RFID based
                                                       • Improved postal                                    Mobile-Based
        1                          Settlement            network
                                                                                 ubiquitous business
                                                          - Optimized            •Development of
            Stability        • Strong foundation for        transportation         basis for 4PL
                               logistics performance        planning               - Logistics agency ASP
        • Continuous
                               management                 - Postal delivery      •Expanded global
          improvement of                                                           partnership
                               (planning/gauging            network
          business process                                                       •Vehicle/parcel control    I
                               performance)                 management                                           Barcode
        • Strengthen                                                              (TMS)
                                                       • Development of                                           Based
                             • First phase in postal
          connection with                                basis for 3PL
                               information DW
          related systems                              • Warehouse Mgt. Sys.
          such as ERP        • Strategic customer        (WMS)
                               management (CRM)

           Set up a RFID test-bed (March, 2005)
           A pilot program of pallets RFID system (5 Post offices, December, 2006)

      KOREA POST                                                                                                           19
The Future of Korea Post

                       Realizing Universal Postal and Financial
                      Services Based on Healthy Profit Structure

        Best Logistics Solution                        Total Financial Services
             Ranked 1st in                                          6-sigma
         Customer Satisfaction       Revenue           ↑         Productivity ↑

                       12 years                 $ 5.0 bil.                  $ 30 mil.
             7 years                                            $ 12 mil.
                                   $ 3.7 bil.

                                                                     ’05     ’ 10
                ’05     ’10             ’05     ’ 10

   KOREA POST                                                                           20
         Thanks for your attention!

                Joong-Yeon HWANG
                President of Korea Post
                   MIC Korea Post

KOREA POST                                21

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