The tough competition and varying customers’ needs make inevitably companies convert into small production system based on many items. As the supply of the goods exceeds their demand and the quality is equalized, companies are regarding logistics management as an important means for heightening competitiveness. Logistics management is being considered an important strategy and new revenue source because it brings companies cost reduction and customer service improvement.
Information revolution creates competitive advantage by giving companies new ways to outperform their rivals. Cost reduction and service improvement, which are competitive means, are conflicting concepts but companies can get two concepts with the development of information technology.
The role and function of logistics is a very important sector in Korea Tobacco and Ginseng Corporation(KT&G). However, KT&G regards logistics as just storage and transportation and does not invest into logistics facilities. Logistics system of foreign cigarette companies is built up effectively by making information flow in real time based on data cumulated in distribution steps. But in case of KT&G, point of sale information, which is core in supply chain management, is not collected in real time and not used.
KT&G has special system from production to sales offices. The establishment of information infrastructure such as bar code and point of sale system is very important for cigarette marketing as well as for the diversification of KT&G.
The present bar code system of cigarette is required to standardize into bar code containing logistics and distribution information. Based on standardized bar code, point of sale system should be established. Bar code standard is a requirement for distribution information system as well as for integrated logistics management system such as supply chain management.
The establishment of bar code and POS system makes stock management and production plan effective, and makes the management of the goods and retailers easy. Also it changes the sales person work of just ordering and delivery work, makes them concentrate into marketing, and reduces sales office work. In addition, it is expected to prevent goods loss and sales persons’ error. Especially at a time to proceed diversification such as distribution business, POS system is an important and necessary infrastructure.
