[Special Stock] MRO Accelerates Synergy with Samsung SDS Acquisition... Managing Supply Chain Risks with AI

Emro, the leading AI-based supply chain management software company in Korea, is showing strong performance. The news that Samsung SDS decided to apply generative artificial intelligence (AI) to logistics solutions to reduce supply chain risks appears to be influencing the stock price.

As of 10:45 a.m. on the 21st, Emro is trading at 74,100 KRW, up 9.29% from the previous day.

Samsung SDS held the ‘Cello Square Media Day’ at its Jamsil Campus in Seoul the day before, announcing plans to use generative AI to detect and respond to supply chain risks in real time. The core idea is to use AI to address geopolitical risks such as the Russia-Ukraine war.

O Gu-il, Vice President and Head of Samsung SDS Logistics Division, demonstrated a scene where he searched for ‘Cello Square Logistics’ on the GPT Store and interacted with a chatbot.

Previously, managers had to check customer-specific cargo information and settlement data separately in the system, but by using generative AI, they can now extract customer-specific cargo volume and logistics cost data all at once through conversation. The time taken to detect supply chain risks and establish response strategies has been reduced from one day to two hours.

In fact, last month Samsung SDS detected the conflict situation between Israel and Iran and classified it as a risk. They then informed customers about the impact on air logistics scheduled to arrive in Israel and proposed an alternative of transporting cargo by sea through adjacent regions. The number of companies using Samsung SDS’s digital logistics service, Cello Square, increased from about 3,000 in December 2022 to about 13,000 last month. The strength of this service lies in the ability to check quotes and estimate the number of containers needed simply by conversing with generative AI.

Samsung SDS, together with its subsidiary Emro, participated in the ‘Gartner Supply Chain Symposium·Expo 2024’ held over four days from the 6th to the 8th. They attracted attention by introducing the SRM SaaS solution and various application cases to global customers.

Emro achieved its highest-ever first-quarter sales. On a consolidated financial statement basis, sales in the first quarter of this year increased by 2.4% year-on-year to 14.6 billion KRW. Investments to build stable supply chains are increasing due to rising geopolitical instability from the Middle East and the global inflation impact. Demand for cloud-based supply chain management systems that can be easily and quickly introduced has increased. Revenue from cloud service usage fees rose 14.3% year-on-year to 1.4 billion KRW. Technology fees, which are steadily generated annually from customers, also increased by 10.8% year-on-year to 2.8 billion KRW.

As of March this year, Emro’s order backlog reached 61 billion KRW, up 31.2% year-on-year, marking an all-time high. Recently, it secured large projects from leading domestic companies. In addition to steadily expanding its AI software lineup this year, Emro is also preparing to launch a new version v10.0 of its supply chain management software ‘SMARTsuite.’

Emro plans to continue its growth through ▲ a rich sales pipeline ▲ the release of a new version of supply chain management software ▲ strengthening AI business ▲ and expanding sales through overseas market entry.