Korean heavy industries going big on e-commerce

Korea's heavy industries are working toovercome an image of smokestack industry by pursuing electroniccommerce, according to an industry source.

Heavy industries are working to overcome an image of smokestack industry by pursuing electronic commerce, an industry source said.

SEOUL (Asia Pulse) – Doosan Heavy Industry, formerly known as HANJUNG, has been operating "e-Sourcing" for material procurement and "e-Sales" for casting and forging sales since last May. The entire procedure, from giving out orders, registering bidding price and making selections, takes place on the Internet.

Last year its e-Sales division reported 29.7 billion won (US$22.9 million) in transactions and this year the amount increased to 39.4 billion won ($30.4 million). e-Sourcing now accounts for half of all procurements taking place in the company this year, estimated at 600 billion won ($463 million) worth.

HSD Engine, a ship engine manufacturer, is running a joint network COVAN system which has 200 member companies doing deals worth 300 billion won ($231 million) annually on the Internet.

The system services procurement and provides information on order placement, blue prints and inspection requests. The company said the system contributed to lowering procurement costs as well as its defective ratio.

Daewoo Heavy Industries & Machinery is aiming for a transparent procurement procedure through its ez-Purchasing site (www.dhimpur.co.kr) which began in January.

The ez-Purchasing system is able to be accessed by all machinery parts manufacturers. Until now Daewoo has dealt only with its subcontractors or affiliated partners in making parts purchases.

The deeper pool of competition will improve product quality and lower costs, the company said. "Heavy industries are trying to combine e-commerce in information technology with their business, which will raise productivity and lower purchasing prices, so it would be difficult to call them just smokestack industries," an industry source said.