Episode 54: The Pallet Pool System
Lee Chang-jin presented the proposal related to the pilot project of the pallet pool system to the county governor. After reviewing the proposal, the Ik-san county governor showed a fairly positive reaction.
“Hmm, this is quite a realistic proposal. We were short on manpower anyway, so this is great timing. Related companies will also welcome this with open arms.”
Topsoil is the term used to describe the soil used for transplanting seedlings into fields before they sprout. The biggest task for topsoil companies was packaging and shipping this soil because the weight and quantity of topsoil and fertilizers were enormous.
These companies usually resolved this by hiring laborers through employment agencies, but loading and unloading work with fertilizers and topsoil was notoriously known as a 3D job (dirty, dangerous, and difficult), making it the least popular job back then. Moreover, as urbanization progressed, much of the rural workforce had moved away. However, companies were initially hesitant to adopt the unfamiliar system.
“Well, although I’m trying it out because the county governor recommended it, I don’t have much money to give. Due to the oil shock, sales have dropped, and the budget has been significantly reduced.”
“Don’t worry about that. This time, it’s a free service. Try it out as a pilot, and if it’s useful, we can discuss it again then. We can cover it with the Saemaul Undong (New Village Movement) fund once.”
Once the companies to participate in the pilot project of the pallet pool system were persuaded by Lee Chang-jin, wooden pallets stamped with the Daese Industrial logo in oil-based paint were promptly delivered.
The pallets were made using non-commercial wood, so they were inexpensive. The products were completed with pest control and heat treatment in a high-temperature vacuum dryer before external shipment.
Since it was Lee Chang-jin’s first time actually operating and establishing a logistics system, he paid close attention to ensuring a seamless and organic flow.
“Everyone, just follow the manual as instructed.”
To implement the logistics system, Lee Chang-jin sought help from logistics associations and research institutions in Japan, the U.S., and Europe.
Among them, Kanemitsu Yoshihiro, the secretary-general of the Japan Logistics Management Council, was of great help. A Korean-Japanese born in Busan, he had developed logistics equipment, hosted exhibitions, and was the one who introduced the pallet pool system to the Japanese government. At Lee Chang-jin’s request, Secretary-General Kanemitsu readily agreed.
“Of course, I should help. It’s an honor to assist my father’s country.”
He personally came to Korea on a business trip, directing the field and generously passing on his knowledge.
Shortly after about a month of the pilot project, a person in charge of the field inspection review ran into the president’s office, astonished.
“President! President!”
“What’s the matter? Acting like an amateur?”
“Well… the results of the pallet pool system implementation are out. They’re shocking.”
“Why? Are they not good?”
“No, it’s the opposite. Don’t be surprised. The average work speed has increased by five times, and the processing speed has increased by four times.”
The executives murmured as they looked at the statistical table.
“What? Is this figure real?”
The pilot project results were at an astonishing level.
The time it took for a single forklift to unload a total of 14 pallets was around 60 minutes.
When calculated simply by cost, it achieved more than a tenfold cost reduction.
Surprised by the tremendous efficiency, the fertilizer companies quickly changed their minds.
Encouraged by the results, Lee Chang-jin accelerated the establishment of a system to manage pallet positions, usage counts, usage history, and inventory status based on the pilot project. While preparing tirelessly for several days, he suddenly received a call from Yeo Jin-joo.
“President, it’s a call from Gyeongun Ilbo.”
“Gyeongun Ilbo? Put them through.”
As Lee Chang-jin answered the phone, a familiar voice came through the receiver.
“Hello?”
“Hello, this is Joo Young-mi. How have you been, Mr. Lee?”
“Ah, Reporter Joo, hello. I heard you got promoted, congratulations. I’m flattered that you called despite being busy.”
“Haha, not as much as you, President. I’ve been hearing rumors that your business is booming recently. I heard you’re introducing a pallet pool logistics system with your forklift business. Is that true? It sounds like a good story for an article. Could you spare some time for an interview?”
Having previously enjoyed a successful exclusive interview with Lee Chang-jin, Joo Young-mi was quite proactive.
“Ah, I was just about to contact you. We’re planning to host a seminar on logistics innovation in about a week. I was going to invite you then.”
“Oh, really? That sounds exciting. Given our past connection, you’ll surely give me an opportunity for some exclusive questions, right? I’d be disappointed if you left me out.”
“Of course. How could I do that? I’ve arranged a separate front-row seat for journalists, a special royal seat just for you.”
A few days later, a seminar was held targeting media outlets, including Gyeongun Ilbo, government agencies like KEPCO, Anyang Steel, Nonghyup, and the Rural Development Administration. The seminar was held at the Songdo Hotel near Yeouido. Yeo, the manager from Daese Industrial, was in charge of reception.
“Reporter Joo, this way, please.”
There was a lecture hall at the front of the conference room, with a designated area for journalists.
As Reporter Joo sat at the table, she heard a familiar voice from somewhere.
“Hey, Reporter Joo. We meet again? Why do we see each other so often these days?”
Joo Young-mi frowned as she confirmed the person waving cheerfully. It was Reporter Choi Tae-seop from Hansung Ilbo, her nemesis.
“Why are you here, Reporter Choi?”
“What do you mean? I came to see if there’s any news. Don’t you see this?”
Showing his ID badge, Reporter Joo grumbled as she said.
“Aren’t you tired of following me around all the time? You’re not a stalker, are you?”
“Haha. Don’t misunderstand. It’s just a coincidence that our paths crossed. Rather, seeing you here means this place must be a hotspot for issues. I should keep an eye on it.”
“Stop talking nonsense and get lost. I’ve already claimed this story.”
“Haha, is there such a thing as your story or my story in journalism? The one who writes it better is the winner. Let’s share it amicably. Ah, here comes the star of the show.”
In the meantime, as Lee Chang-jin entered after finishing his preparations, everyone’s attention turned to one place.
Standing at the podium, Lee Chang-jin began his opening remarks.
“Hello. I’m Lee Chang-jin from Daese Industrial. Today, I am here to explain the somewhat unfamiliar pallet pool system to you. Shall we start with the prepared materials?”
As the beam projector started, Lee Chang-jin showed the prepared slides and spoke.
“As you can see from this graph, logistics account for up to 10% of the overall GNP. The pallet pool system, being the core of logistics, should be discussed from the perspective of national economic activities rather than just cost savings.”
Lee Chang-jin explained in detail the cases of pallet pool system adoption in Europe, the U.S., and Japan, the necessity and prospects of the pallet pool system in logistics, and the economic effects of its adoption. After the briefing, a Q&A session was held.
“This is Kim Young-sik, an officer from the Agricultural Policy Division of the Ministry of Agriculture. I have a question about something you mentioned. You said the pallet pool system contributes not only to logistics development. Could you explain specifically which fields it is related to?”
“Ah, great question. The pallet pool system is related to many businesses such as forklift rental, folding container business, and other subsidiary material sales. It can be used in rice purchase centers, grain warehouses, briquette factories, brick, textile, oil, food, daily necessities, agricultural and fishery products, fertilizers, as well as petrochemical, food processing, building materials, automobiles, electronics production bases, and distribution and consumption processes wherever there are forklifts.”
Then, Reporter Choi, sitting next to him, raised his hand and asked.
“This is Reporter Choi Tae-seop from Hansung Ilbo. I enjoyed your talk. But it seems more appropriate for the government to take the lead in promoting the pallet system rather than private entities. What do you think about that? Considering the current logistics flow, isn’t it premature for Korea?”
“I agree that structural reform should be carried out at the government level. However, isn’t it also meaningful for private entities to take the lead? Industries that emerge organically tend to have greater competitiveness.”
At that, Reporter Joo added a supplementary question.
“One more thing, you mentioned Japan earlier, and I understand that in Japan, forklifts under 2 tons account for 90% of all forklifts. Isn’t the situation different in Korea?”
“If there is no demand, we can create it. Japan didn’t initially have a developed market for small forklifts either. By establishing a national logistics network that multiple companies can use jointly, the pallet system can help reduce costs and enhance national competitiveness.”
The discussion continued for about 20 minutes. Listening to Lee Chang-jin’s logical explanations, the audience felt naturally convinced. Reporter Choi from Hansung Ilbo muttered to himself.
“Wow, he’s a good speaker. He could go into politics someday.”
“Don’t talk nonsense. What would we do if someone like him went into politics? Don’t waste such a valuable talent and do your job properly.”
“Geez, our Reporter Joo is unusually prickly today. Alright, alright. Can’t I even make a joke?”
A few days later, when Lee Chang-jin arrived at the office, Gu Chang-dong brought him a newspaper.
“President, look at this. You’re in the newspaper again.”
“These days, you’re quite photogenic. You could be a movie star.”
With Seo Yo-han’s joke, they opened the economic section of Gyeongun Ilbo, where a large article titled “Innovation in Logistics Management” covered the seminar topic. The article was written by Reporter Joo Young-mi.
“Wow, it’s the top article on the economic page? Reporter Joo worked hard.”
“Hansung Ilbo is also quite favorable. Although critical, they seem to have put in an effort.”
Hansung Ilbo, led by Reporter Choi, published a column. The tone was critical of the outdated logistics system rather than the pallet pool system itself.
Although it clearly opposed the establishment of a private-led system, it agreed on the necessity of establishing a logistics system.
Inquiries flooded in from related parties who read the articles. They called the office to express their support, saying they realized the importance of logistics and how to proceed with it. The NBS broadcasting team also came by to request filming.
“If you permit, can we shoot a special feature? We also agree with the purpose of introducing the pallet pool. But it’s more effective to see with our eyes than just hearing about it, right?”
“Of course. We welcome it.”
With the media’s cooperation, they filmed the scenes of the fertilizer company using pallets.
The fertilizer company had no reason to refuse the opportunity to shoot a promotional video for free.
As the news was followed by a broadcast, inquiries skyrocketed. Companies, realizing the utility of pallets, rushed to apply for contracts.
The government’s support was also significant. The government, interested in logistics innovation, backed the initiative. It was thanks to Section Chief Seong-cheol from the Central Intelligence Agency working behind the scenes.
As a result, forklift sales also soared rapidly. The volume of rented forklifts surged by 500% in just a few weeks.
However, the joy was short-lived, and soon, a new problem arose.
- To be continued in Episode 55 -
