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Garak Market Electronic

Garak Market Electronic. Auction System. Seoul Agricultural & Marine products Corporation(SAMACO). Table of Contents. 1. Introduction of SAMACO. 2. Changes in Transaction System. 3. Electronic Auction. 4. Future Operating Plans. 5. Questions & Answers. 1. Introduction.

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Garak Market Electronic

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  1. Garak Market Electronic Auction System Seoul Agricultural & Marine products Corporation(SAMACO)

  2. Table of Contents 1 Introduction of SAMACO 2 Changes in Transaction System 3 Electronic Auction 4 Future Operating Plans 5 Questions & Answers

  3. 1. Introduction To manage and operate public wholesale markets founded by Seoul Metropolitan Government Directing and supervising auction company, intermediary wholesalers and related traders in market Maintaining the markets’ facilities and supervising distributors Training distribution specialists and improving the distribution structure Operating Seoul Organic Food Center for School Meals 1984.4.10(Capital : 693.6 mil USD, Land & Goods : 669.3 mil USD, Cash : 24.3 mil USD ) Established Markets Managed Garak Market, Gangseo Market, Yangjae Market(3 markets) Organizations Headquarters and 1 branch, 1 business office Staff 302(2 executives, 184 office staffs, 74 field/ technical staff, 42 clerical assistants) 1

  4. 2. Changes in Transaction System Electronic Auction System 2000 All products auctioned through finger signal auction system 1995 Finger signal auction system for certain products started(apples, pears) 1991 Garak market(SAMACO) opened 1985 All agricultural products sold by clients (consignment sales) ~1985 2

  5. 2. Changes in Transaction System Changes in Auctioning Electronic Auction System Finger Signal Auction System 3

  6. 2. Changes in Transaction System Problems with Auctioning by Raising Hands Unfair transactions (Collusion by Intermediary wholesalers and the auctioneers) 1 Difficult to understand the Finger signal auction system, suspicions of unjust transactions 2 Lower bid than the maximum due to mistakes by auctioneer 3 4

  7. 3. Electronic Auctioning Why we choose the electronic auction system electronic auction system Elimination of unfair transactions Rapid and Simple 5

  8. 3. Electronic Auctioning Goals in pursuing The Electronic Auction System Fair and transparent transactions Fast transmission of auction results Open Prices Prevent transactions from collusion 6

  9. 3. Electronic Auctioning Progress of Electronic Auction System 2003 Sales ledger correction system implemented Sep 2000 Began executing electronic auctioning for 14 items May 2000 Governmental subsidies for auction company to support electronic auction system Sep 1998 Auction results distributed via internet 1997 Initiation simulation of electronic auction system 1994 Electronic auctioning principle legislated 7

  10. 3. Electronic Auctioning Progress of Electronic Auction System Auction company Intermediary wholesaler Category Samaco Producer Buyer Shipment Shipping agreement Shipment Product Shipping Bid Auction Physical Flow Auction & non-auction transaction system Bid selection Move to intermediary wholesaler Cash Flow Verify invoice, Register invoice Register shipping doc information Move to intermediary wholesaler Register sales detail Sales Sales Product Shipping Report sales details Settle payment Bill payment Settlement Verify sales other than listed Confirm payment 8 Send payment Confirm payment

  11. 3. Electronic Auctioning Composition of the Electronic Auctioning System Shipping Registration Auction Company Shipping Information Verify Invoice Prepare sales ledger Shipper Shipping Site Electronic Auctioning System Sales settlement System Wireless receiver Response Information Transmission Server Electronic auctioning resources DB Display Panel Display Panel Real-time auction data Settlement data Correction data Intermediary Wholesaler Samaco Relevant organization Real-time auction settlement data Intermediary Wholesaler Consumer Wholesale market Department store Retailer Large scale buyer who does business outside the market Korea agricultural and marine products educational cultural information center Shipping information System Distribution information System 9

  12. 3. Electronic Auctioning Process of Electronic Auctioning Verify Invoice and prepare sales ledger Shipping to Auction Hall 2 1 10

  13. 3. Electronic Auctioning Process of Electronic Auctioning Display the successful bid on electronic bulletin board 4 Place a bid 3 11

  14. 3. Electronic Auctioning Process of Electronic Auctioning Move the bid products to intermediary wholesaler 5 12

  15. 3. Electronic Auctioning Process of Electronic Auctioning Send message to shipper on their bidding results Open to the public of product’s price and quantity on Samaco’s homepage 6 7 13

  16. 3. Electronic Auctioning Process of Electronic Auctioning Open to the public of product’s price and quantity on Samaco’s homepage Send message to shipper on their bidding results 9 8 14

  17. 3. Electronic Auctioning Electronic Auctioning Method Auctioneer Provide the standard price to start auction Electronic Auctions Place a bid Intermediary wholesaler shipper Ship agricultural and marine products, prepare invoice 15

  18. 3. Electronic Auctioning Video Clip of Electronic Auctioning 16

  19. 3. Electronic Auctioning Finger signal auction system vs electronic auction system Electronic Auctions Finger signal auction system Takes 14’ per transaction Takes 22’ per transaction Needs 2 persons Needs 3 persons Information disseminated Immediately after auction Takes more time to distribute the auction results/ immediately distribute the auction results 17

  20. 3. Electronic Auctioning Strengths and Weaknesses of Electronic Auctioning Strengths Weaknesses More trustworthy Faster operation Participate in auction without being influenced by others Service improvement Easy understanding by auction participants Resistance from Intermediary wholesalers Lower bid than finger signal auctions system Cost for settlement program Maintenance and repair costs will incur Aged Intermediary wholesalers will not easily adapt to the new system 18

  21. 3. Electronic Auctioning Implementation Cost of Electronic Auctioning System Implementation details of electronic auctioning system Implementation cost : 550,000$~650,000$ per 400wholesalers Details Development cost : Electronic auctioning system implementation, homepage build out, linkage with other systems such as sales management system Solution purchase : Database management system, Reporting tool, WAS etc. Equipment purchase : Server, bidding machine, controlling machine, electronic bulletin board, communication facilities, etc. Others : Bidding table, etc 19

  22. 3. Electronic Auctioning Electronic auctioning percentage at Garak Market Electronic Auctioning Rate Vegetables Fruits 100% 98% 90% 94% 88% 85% 85% 80% 82% 81% 76% 70% 67% 60% 60% 50% 40% 30% 20% 10% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20

  23. 3. Electronic Auctioning Factors in the success of electronic auction system Governmental Acts and Subsidies Nov. 1994 : Legislated “For auctioning or bidding, in principle it should be done Electronically” the Distribution and Price Stabilization of Agricultural and Fishery Products Act May. 2005 : Subsidies from the government for the electronic auction system(603,636$) Thorough advanced preparation and strong will to execute Implementation cost : 550,000$~650,000$ per 400wholesalers Feb. 1998 : Performed demonstrations and test operations by auction company Feb. 1999 : Strengthened evaluation management such as the rate of electronic auctioning In evaluating auction company 21

  24. 3. Electronic Auctioning Results of Electronic Auctioning Secure transaction transparency and fairness Auction results are provided on a real-time basis through the internet Increase task efficiency By implementing electronic auctioning system, looking up the bidding prices and payment settlement are done rapidly and accurately The intermediary wholesaler can buy the proper quantity to sell 22

  25. 3. Electronic Auctioning Results of Electronic Auctioning Technical Problems Frequent Interruption in auctioning As there are differences in electronic auctioning systems by auction company, it is difficult to control auction details Sensitive system that can be changed by climate and deterioration Due to uneven surface at the auction house, when moving the auction block, the system may become instable due to shocks 23

  26. 3. Electronic Auctioning Problems with Electronic Auctioning Operational Problems Price variation by shipper More severe competition Problems in processing products when Intermediary wholesalers do not bid Intermediary wholesalers’ resistance for decreases in sales margin 24

  27. 3. Electronic Auctioning Problems with Electronic Auctioning Problems following shipping from production location type Inadequate shared selection and condition by produce location Difficult to adjust shipping considerations Other Issues Relatively limited and confined facilities due to inadequate preparations for auctioning Inadequate circumstances for sample auctioning 25

  28. 3. Electronic Auctioning Efforts to improve transparency And fairness in electronic auctioning Real time distribution of the results of electronic auctioning executed through the internet Distribute 2 hours after auction close(Sept. 26, 2000 ~ Mar. 31, 2002) Distribute immediately after auction close(Apr. 1, 2002) Customized information service implemented(May 2004) : Settlement price Real-time text message service Improving the Electronic Auctioning System Corporate internal search system for auction results implemented(Oct – Dec 2002) Real-time sharing and search function of auction results prepared between the SAMACO and auction company(June 2003) 26

  29. 3. Electronic Auctioning Shipping Shipper Display Panel Distribution Information Receiver Auctioning system Bidding information Auction Block Other Institution Successful bidder selected Transmit successful bid information Distribution Information Service Retailer Distribution Information System Price information Transaction records Managing Transaction order Information User Bidding information text service Large discount store, Department store Intermediary wholesaler Samaco Shipping Information Shipper Consumer 27

  30. 4. Future Operating Plans Wholesale market trusted by farmers and consumers Establish a transparent and fair wholesale market transaction order Assess whether the results of the transaction reflected any unfairness Establish transaction order at transaction sites Constant monitoring of transaction courses RFID type Transaction participation certificate Fair transaction detection system Recording system of the auctioning process 28

  31. 4. Future Operating Plans RFID type transaction participation certificate Preventing those unauthorized from participating participate in transactions and substitution participations Goals Effective screening of improper auctioning participation using IT devices Prevent customer complaints Utilizing RFID type transaction participation certificates Establishing site transaction orders at auctioning sites through inspection of RFID cards on site Verifying transaction participants at wholesale market corporations 29

  32. 4. Future Operating Plans RFID type transaction participation certificate Establish order in the auctioning process Expected Impact Efficient auctions enabled through RFID reader device Easy verification of suitability to participate in the auctions 30

  33. 4. Future Operating Plans Auctioning progress Recording system Establish internal/ external reliability over fairness and transparency of the auctioning process Goals Improper activities over auctioning prevented in advanced from the auctioning company and participants by recording the entire auction process 1 camera recording the auctioning computer, 1 camera recording the auction Recording Method 31

  34. 4. Future Operating Plans Auctioning progress Recording system Prevention of unjust acts towards the auctioneer and participants Expected Impact Verifying auctioning rejection, collusion, as well as unauthorized or substitute participants during the auctioning process Checking the auctioning process when there is complaint from the producer 32

  35. 4. Future Operating Plans Auctioning progress Recording system Implement a detection system for improper auctioning activities through data mining of auction data Purpose Used as a method to prevent reoccurrence when unjust acts such as improper bidding or fixing of bidding price are suspected for verification and to prevent further occurrence. Establish transaction data collection system Establish rule management system Report & Dash Board Fair transaction detection system diagram Rule Management Bidding information Winning bid information Detect abnormal transactions /improper data Settlement information Analyze abnormal transactions /improper data Correction information 33

  36. 4. Future Operating Plans Fair transaction detection system Efficient detection and prevention of unjust transactions Expected Impact Establishing fair transaction orders in distribution of agricultural and marine products Secure transparency in and improve reliability of transactions of agricultural and marine products Securing basis for providing data for rapid statistical analysis 34

  37. 4. Future Operating Plans Fair transaction detection system Fair transaction detection system Global Leader in Agro-distribution Auction recording system Advancements in distribution Information analysis system 35

  38. Questions & Answers

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