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Executive Summary of the Final Report

A. Background B. Overview C. Expected Results

SECTION: Technical Cooperation COMPONENT III

D. Feasibility Assessment

1. Supply and Demand: Geographic Technologies and Workforce Capacity 2. Return on Investment Discussion

E. Program Design Elements for a Proposed GIS&T Center 1. Strategic Articulation

a. National Strategic Plan of Panama b. National Strategic Plan for Science, Technology and Innovation c. Other Relevant Plans / Projects d. International / Regional Linkages

2. Business Model 3. Capacity Building Approach

F. Research Agenda

1. Consultation Meetings and Identification of Key Partners 2. Results from Consultations 3. Strategic Research Directions

SECTION: Technical Cooperation COMPONENT IV

G. Implementation Plan for the Establishment of the Center (Phase II) 1. Organizational Structure 2. Plan for Research / Educational Outcomes and Indicators of Success 3. Cost Proposal 4. Financing Strategy

1. Key Concepts Related to GIS, GIS&T, and Cyberinfrastructure Appendices and Supplemental or Reference Materials

2. Additional Prospective Center Network Institutions 3. Korean National GIS Project Report 4. GIS&T Body of Knowledge and Geospatial Technology Competency Model 5. Knowledge Partnership List of Experts and Institutions Consulted 6. Sector Example Case Study

FINAL REPORT TABLE OF CONTENTS

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EXECUTIVE SUMMARY

A. Background The Association of American Geographers (AAG) has been involved since 2006 in discussions with colleagues at the Inter-American Development Bank (IDB), particularly the Knowledge Partnership Korea Fund (KPK), and the National Secretariat of Science, Technology and Innovation in Panama (SENACYT), on the feasibility and potential benefits of creating a Geographic Information Science and Technology (GIS&T) Innovation Center in Latin America for economic development, environmental protection, and other needs. These organizations have engaged the AAG to help explore this idea and to develop a feasibility study and proposed plan for addressing this concept. This document represents a culmination of consultations and studies conducted towards the aim of preparing a framework for how best to enhance GIS&T research and educational capacity in Latin America. This effort has received funding from the IDB KPK managed through and with SENACYT and implemented with the expertise and support of the AAG. The Knowledge Partnership Korea Fund for Technology and Innovation (KPK) was first established in July 2005 by the government of the Republic of Korea. The purpose of this fund is to promote project preparation and implementation in the area of technology and scientific innovation. The objective of the Fund is to support the development of technological and scientific capacities, as well as institutional strengthening, based on the application of ICT. The KPK is the major IDB funding source solely dedicated to the application of science, technology and innovation. By sponsoring this effort, the IDB-KPK is poised to make a significant contribution to the development of geographic technological and GIScience capacities in the region. SENACYT’s mission is to convert science and technology into tools for sustainable development for Panama and its vision is to advance the development of science, technology and innovation as an integral part of national policy development, strengthening cultural identity and promoting the dissemination of knowledge within Panamanian society. By hosting this effort, the ministry has recognized the importance and potential that geographic sciences and technologies hold for advancing sustainable development.

The Association of American Geographers (AAG) is a nonprofit scientific and educational society founded in 1904. For 100 years the AAG has contributed to the advancement of geography. Its members from more than 60 countries share interests in the theory, methods, and practice of geography, GIScience and geographic technologies, which they cultivate through the AAG's conferences, scholarly publications, specialty groups of experts, special programs and networks. AAG is comprised of members who are geographers and related professionals working in public, private, and academic sectors from all over the world. AAG’s role as facilitator and expert advisor organization throughout this effort has both drawn from significant international experience and contributed to the AAG’s engagement around promoting the discipline and its tools for addressing sustainable socioeconomic development internationally.

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This document serves as a final cumulative report on this collaborative effort. It also presents a number of specific deliverables defined by the technical cooperation while previous deliverables already submitted and approved are referenced. Namely, the following pages comprise additional information about the Capacity Building Delivery Approach (which supplements previously submitted deliverables under Component II); a Feasibility Assessment and Design Study for a Latin American Center of GIS&T Innovation for Economic Development, a Research Agenda, Identification of project participants; Articulation with strategies of sectional development, in particular the National Strategic Plan of the Government of Panama and other national plans and pertinent regional programs, a Discussion of the Supply and Demand of GIS&T in the region (Component III); and a Plan derived from the results and recommendations of all of the above for a Second Phase of Carrying out the Establishment of a Center, which incorporates both a Financing Plan and a Budget Plan (Component IV).

B. Overview In recognition of the roles of technology and innovation for improving the social and economic development of the Latin American and Caribbean (LAC) region, we have undertaken this technical cooperation effort within the high-growth field of GIS&T. Key concepts related to GIS and cyberinfrastructure are presented in Appendix 1. Advances in GIS&T have transformed markets and economies at all scales but have not been taken full advantage of by Latin American countries to advance sustainable social and economic development goals because R&D capabilities, particularly with regard to regional-scale systems development are weak, because workforce development efforts are nascent and not systematic, technology transfer is slow and sporadic, and educational programs often do not align with priority development needs. To address this need and opportunity, the effort espouses the long-term goal of enhancing GIS&T capacity and cyberinfrastructure within the LAC region. GIS&T offers an exceptional focus for development efforts, because, among other reasons, it offers tools which enable economic growth, foster e-government and is widely used in high-growth industries, governmental management and for social development programs. Indeed, advances in GIS&T have transformed markets and economies at all scales, due in large part to the increased efficiency and effectiveness that they have enabled. The planning and operations made possible by an enhanced GIS&T capacity and cyberinfrastructure offer a unique opportunity to create sustainable social and economic development by channeling and maximizing productive growth and improving regional competitiveness. These include a broad range of applications such as transportation and logistics, city planning, environmental and natural resource management, tourism, water and sanitation, energy, agricultural and rural productivity, health, sustainable urban development, and other important sectors. The prospect of establishing a Latin American GIS&T Center is concluded as being feasible for three main reasons, as elaborated below in Section D. First, although the availability of existing GIS&T data, infrastructure and workforce capacity in the region lacks full standardization, integration, and coordination, there is sufficient activity among public, private and academic sectors combined to support the establishment of a Center focused on geographic technologies. Secondly, the demand for better infrastructure and more human resources that will provide technical services in GIS, particularly those relevant to the megaproject investments now in execution by the

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federal government of Panama, warrant the establishment of a Center of excellence to help define and guide not only short term training and studies, but also longer term education and research, preferably simultaneously. Third, the Return on Investment (ROI) for the relatively small outlay required for a GIS&T Center with respect to the scope of these megaproject investments represents a potentially cost-effective way to improve efficiency and effectiveness of major development efforts across priority sectors. In Section E, the design elements for such a GIS&T Center are presented. These elements are strategically and explicitly articulated with the National Strategic Plan of the Government of Panama and especially the National Strategic Plan for Science, Technology, and Innovation of SENACYT. Three other relevant synergistic initiatives are highlighted, namely, the information system infrastructure efforts of the Authority for Governmental Innovation, the digital geographic data upgrades underway at the National Geographic Institute (Tommy Guardia), and the human resource capacity building efforts in technology skills that the National Institute for Vocational Training and Capacity Building for Human Development (INADEH) has planned and is implementing. Beyond these national considerations, the design calls for strong regional and international integration by clear consensus of the Knowledge Partnership, in recognition of the unavoidably international character of research innovation, higher education, and economic development in a globalized society. They focus on a multi-sectoral approach across public, private, and academic spheres and could be envisioned as a hub of networks and organizations sharing mutual interests. In particular, recommendations for the Center design derive from successful models identified by the partnership, including the National Center for Geographic Information and Analysis (NCGIA), the US National Science Foundation’s Industry/University Cooperative Research Centers (I/UCRC), and also from the Korean National Geographic Information System Program (NGIS). The capacity building approach recommends a framework of the components of the widely used and recognized GIS&T Body of Knowledge, and features activities that are not only oriented toward building capacity of individuals but also of institutions. Likewise, the Research Agenda has been developed in close consultation with experts and colleagues in public, private, and academic sectors in the United States, Panama, Latin America and Korea. It relates GIS&T to the strategic priority sectors identified explicitly by Panama, which also are highly relevant across the region and demonstrate particularly promising areas of application for geographic sciences and technologies. It also includes reflective themes to better understand the status of the regional geospatial sector and scientific workforce as well as standards and interoperability topics (Section F). The plan for Phase II to establish the Center in Section G outlines a suggested organizational framework to be led by SENACYT, estimates the basic costs, and identifies a multi-faceted financing strategy.

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C. Expected Results

Among the expected results of the creation of a GIS&T Center are cumulative outcomes to enhance GIS&T research and educational capacity in Latin America. Many anticipated outcomes directly relate to SENACYT’s Strategic Plan. These include:

• support for the creation and installation of an international center of excellence for GIS&T Innovation in Panama

• strengthened GIScience and geographic technological cyberinfrastructure in Panama and the region

• geospatial expertise identification and tracking • strengthened geospatial technical training in applications related to priority

sectors • strengthened universities to augment GIS education • support for the advancement of GIS professional Master’s level and advanced GIS

certificate programs oriented toward priority sectors • increased GIS&T R&D innovation activities targeted toward specific issues

related to socioeconomic development • support for GIS&T research excellence clusters, and • the execution of strategic GIS&T projects in priority areas of socio-economic

development. The following pages present a discussion and plan for how best to achieve these results that culminate in enhanced GIS&T research and educational capacity in Latin America.

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D. Feasibility Assessment

1. Supply and Demand: Geographic Technologies and Workforce Capacity

GIS&T is an engine for both job creation and economic development. The worldwide market for GIS is forecasted to grow 50% over the next five years, representing a compound annual growth rate of 9.3%. This is attributed to the growth in users for electric power, oil and gas distribution, and divisions of federal governments. Growth over this period will be driven by increased adoption of GIS in emerging markets such as Asia, Latin America, and the Middle East (Perkins 2009).1 Global GIS sales of software, services and data grew an impressive 10.3 percent in 2010 and are expected to reach $5 billion with an annual growth rate of 8.3 percent in 2011 (Keating 2011).2

In 2009, the public sector accounted for 40 percent of this market, exceeding $2 billion, mostly within national / federal governments. Over the last 8 years, this growth has reached a compound annual rate of 7.2%.

In the US, GIS&T has been identified as one of the three most important high-growth technology industries by the U.S. Department of Labor and Department of Education, along with biotechnology and nanotechnology. The scientific journal, Nature (2004)3

noted the demand for trained workers in GIS&T related to this high-growth industry has been increasing dramatically.

In Panama, GIS&T was introduced in the late 1980s through remote sensing projects undertaken by the National Geographic Institute Tommy Guardia (Martinez 2007).4

In 1992 the first seminar in Remote Sensing and GIS held at the University of Panama was attended by both professional geographers and geography students, and has since become a major degree program at both Bachelor’s and Master’s levels, housed in the Department of Geography. The Technological University of Panama also offers coursework and workshops and conducts research using geospatial technologies. An agreement with UNEP for creating a joint GIS Laboratory within the UTP Office of Research is pending. In recent years, the Autonomous University in Chiriqui has also established a GIS training laboratory and the private Latina University now offers a Master’s in GIS.

GIS and related technologies have become increasingly important and increasingly present in all sectors in Panama. Private sector use of GIS and related technologies include important businesses in the country such as Cable Onda Communications Company, La Prensa Newspaper, Bonlac Dairy, and the National Brewery, which utilize

1 Susan Perkins; Geospatial Systems Market to grow 50% over next five years; ARC Press Center, September 2009. 2 Michael Keating; GIS/geospatial sales projected to grow 8.3 percent in 2011; GOVPRO, January 27,2011. 3 Virginia Gewin; Mapping Opportunities; Nature, January 22, 2004. 4 Raúl Martínez: Los SIG en Panama y su impacto en la labor del Geógrafo Panameño; 2007.

SECTION: Technical Cooperation COMPONENT III

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geographic databases in their everyday operations. Public entities that rely on GIS&T include the Panama Canal, the General Comptroller of the Republic, the National Land Administration Agency, and many others. However, the supply of human resources is not keeping up with the high growth and current demand for a skilled geospatial workforce. Position announcements may go unfilled or filled with underskilled workers who require further training. With greater awareness and adoption of GIS&T in all sectors in Panama, the estimated hundreds of GIS&T specialists and geographers would need to grow to thousands to provide the data, technical support, analysis, and research services necessary. There are many initiatives which exist in Panama that call for the development of GIS&T activities or that would be enhanced by incorporating these technologies into their implementation. To illustrate, current or future projects from the 2009-2014 National Strategic Plan of Panama for national infrastructure will total approximately $9.6 billion over the next few years, accounting for approximately 70% of overall public investment for the period. Many of these “megaprojects” demonstrate either explicit need for or potential use of GIS&T. Examples are presented below in section E1a.

2. Return on Investment Discussion Increasingly public institutions seek ways to improve transparency and accountability to their constituents, which implies they must also seek ways to determine to what extent benefits outweigh the costs of adopting or investing time or financial resources with a particular set of technologies. Particularly, multi-institutional efforts such as enterprise GIS initiatives are dependent on obtaining organizational buy-in and delivering measurable results. One useful concept for understanding the potential impact of geospatial technologies, widely used by public sector GIS units, is the Return on Investment methodology. The purpose for discussing ROI is to consider the feasibility of this proposed plan for a center with respect to benefits, because to be successful, it will require seeking investment by various partners, not only of financial resources, but also commitments of effort, time, data-sharing, policy coordination, and so on.

Many times the benefits of utilizing GIS can be hard to quantify, particularly with a proposed initiative such as this one that focuses on its benefits for social as well as economic development. Nonetheless, a body of case studies and research conducted with municipalities and private enterprises can inform a discussion of a bottom-up ROI model, linking operational drivers and financial benefits that can provide a foundation for decision-making. This ongoing comprehensive study of government agencies (cities and states) and utility companies in the US started in 2003 has yielded the following insights (Samborski 2006)5

A common and valuable organizational benefit from geospatial projects is access to information that was previously inaccessible due to time constraints or political boundaries. Capability is provided for ad hoc presentation of maps, map production by non-technical staff, and communication of decisions using maps. Data accuracy and completeness are improved.

:

5 Robert M. Samborski; Geospatial Information & Technology Association Business Case Development and Return on Investment Research Project for Geospatial Information Technology, GIS Development, September 2006.

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Making workflow management more efficient by having seamless end-to-end business processes, better public service through remote access to property information, tax information, and tax payments, and improved outage reporting and statistics.

Provision of better information for improved decision making, shared data and services, more consistent access to data, improved services to citizens and/or customers, ability to integrate data among other systems, the ability to generate new ‘understandings’ from the data, and overall easier access to data.

Enhanced provision of capabilities for emergency preparedness and preplanning, for training scenarios, and for reporting to the state or province.

Large geospatial projects, such as enterprise-wide efforts throughout a metropolitan area, have large costs and accompanying large benefits. In many cases, productivity benefits are dominant.

Mature geospatial implementations enable the return of substantial benefits from the development of new applications based on the existing technology at marginal additional cost.

Other public and private case studies specify tangible measureable outcomes, financial figures and percentage savings, such as: an internal rate of return of 37% by the fifth year and a total 216% ROI for the enterprise GIS system in the City of Springfield, Illinois; savings of $2 Million for the Finance Department of the City of Saco, Maine; routing optimization, workflow sequencing, decreased response time, improved productivity, reduced costs, and actual lowering of the need for technical support for Sears, Inc.; improved performance at the Star Tribune in Minneapolis-St.Paul, Minnesota using GIS with a ROI complete by 2.5 months and a 16% ROI in the first five years. One of the most relevant benefits related to integrating GIS within a multi-sectoral partnership is the retention of human resource capacity that the technology actually enables. The City of Hudson, Ohio relates that they were able to use geospatial technologies to address a major problem arising from the loss of “institutional knowledge” when long-time employees retire or leave the job. GIS enabled them to capture a significant portion of this knowledge into an electronic, retrievable format. In conclusion, the prospect of establishing a Center is deemed feasible for the above reasons. There is sufficient activity among public, private and academic sectors combined to support the establishment of a Center focused on geographic technologies, but at the current trajectory this will not produce enough human resources to meet demand for technical or professional services in GIS&T, particularly given the prospect of applications related to numerous megaproject investments of the federal government of Panama. The positive outlook for a rapid and sustained ROI for the relatively small outlay required for a GIS&T Center represents an opportunity for protecting the current investments by the Panamanian government and engaging the private and academic sectors in executing, operating, and utilizing them.

E. Program Design Plan for a Proposed GIS&T Center

The recommended program design elements should be explicitly articulated with broader strategic efforts, should link up with synergistic national and international initiatives, should consider and adapt relevant successful models and experiences, and

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should be based upon a widely-used and recognized approach for building individual as well as institutional capacity. This section provides details on each of these proposed design elements.

1. Strategic Articulation Broader strategic efforts that are relevant to the creation of a Latin American GIS&T Center of Excellence for Innovation include the National Strategic Plan of the Government of Panama; the National Strategic Plan for Science, Technology and Innovation of SENACYT; ongoing efforts within the public sector towards geospatial infrastructure, data, and capacity; and international region-wide linkages.

a.

National Strategic Plan of Panama

The National Strategic Plan of the Government of Panama 2010 – 2014 was approved by the Cabinet Council on December 29, 2009. The document includes a comprehensive strategy for economic and social development for the country, a financial schedule and a corresponding public investment plan for the five year period. The plan sets the framework and establishes the criteria for channeling public expenditures towards priority sectors, programs, and projects nationwide. Among other assumptions, the plan recognizes that “the development and strengthening of … information systems which would guide decision making will improve management in the social sectors.” Logistics, Tourism, Agriculture, and Financial Services were identified as major motors for growth in which the country has or could develop a sustainable competitive advantage, in which the global forces are favorable, in which government actions could be used more efficiently, and upon which the government should concentrate its initial attention. The proposed center’s focus on consolidating and strengthening geographic data, infrastructure and capacity would prove to be of value for a number of projects, even megaprojects of significant investment, which form part of the implementation of this National Strategic Plan, including:

− Housing: $535 million will provide 80,000 housing solutions to benefit about 391 thousand Panamanian families; GIS&T will be needed for floodplain identification, siting and planning for construction areas; it could be used to manage beneficiary portfolios by address; etc.

− Utilities: $111 million for the construction of an Energy Interconnection transmission line between Panama and Colombia; $26 million for mini hydroelectric plants in Chiriquí and Veraguas; $530 million for rehabilitating and expanding drinking water and drainage services; GIS&T will be needed for locating and routing, delivery, and later, operations management over service spaces, etc.

− Transportation: $250 million for a third bridge over the Panama Canal (Colon) as part of a total of approximately $2 billion for transportation planning across the country, whereby 60% is allotted to the creation and implementation of new mass transportation system assets and 40% in the “Gas Bus System” and

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optimization of city transit; part of these funds have already been invested in the new Metrobus System; 128 production roads (some exceeding one million dollars) will also either be constructed or rehabilitated to improve the accessibility of many isolated communities in Panama as well as reduce the time that it takes transportation trucks to travel across the country; GIS&T is already being used for designing parts of these efforts, although additional capacity would improve the efficiency and quality control on their development, and then their later operations and maintenance.

− Logistics: The $5.25 billion Panama Canal Expansion Project, referenced in the plan, is crucial in maintaining Panamanian competitiveness in the global market. With completion scheduled for 2014, this megaproject will increase shipping traffic significantly through Panama. GIS and other spatial tools have already played an integral role in the development and execution of this project, particularly through contributions of professional geographers at the Panama Canal Authority. The National Strategic Plan synergistically dedicates approximately $1 billion to stimulate logistics activity that would capture this increase in trade passing through the country for economic development within national borders. GIS&T activities form part of early logistics studies and research in government-sponsored centers, but capacity is not yet sufficient to fully utilize these technologies for innovation nor capture potential economic development benefits within the private sector.

− Health: $314 million for expanding and strengthening the Primary Care Network by constructing various new hospitals including a New Children’s Hospital in Panama and remodeling and expanding other hospital centers; GIS&T has already been used within the Gorgas Institute for creating a National Atlas of Health as well as other analytical projects and represents a promising area for further attention; strengthening GIS&T will be needed to improve understanding about the population service area needs for the planned expansion, for location analysis, site selection, and later, ongoing service provision, public health monitoring and adjustment of the health care provision system in places where needs are identified, etc.

− Tourism: $150 million for the planning and construction of a new convention center to allow Panama to host more frequent and larger scale international events; funds will also be invested in other tourism projects such as road infrastructure to make travel into isolated places easier for tourists to access; a new zoning strategy will be defined to make tourism planning more efficient; GIS is already being used in the tourism sector through research sponsored by the competitive SENACYT grants, in order to identify the historic route of the Camino Real, and other archeological sites; GIS&T, particularly within the tourism agencies, will be needed to help organize information spatially, aid in decision making for places for tourism development investment; zoning management; etc.

− Education: $45 million to construct 946 pre-school classrooms. In order for this construction to be useful efforts must assure that more pre-school children will have access to them where they live (at the present, only about 40% of pre-school aged children have access to pre-school education); $58 million will be invested in building and equipping 1,070 new middle school classrooms and hiring 7,825 new employees. Both of these projects are planned to benefit regions with high

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density populations. The Ministry of Education (MEDUCA) is also coordinating to deliver books, uniforms, and school supplies totaling $200 million to districts to benefit students in their basic education. GIS&T is needed to manage the distribution of goods to public school students or to optimize services according to school district, identify locations of targeted beneficiaries and guide site selections. In addition, geographic analysis could be used to coordinate school busing systems across Panama City (such as has been done in New York City and hundreds of other cities resulting in significant cost savings and service efficiencies).

− Security: $28 million for constructing 11 aero naval stations will be established along the Pacific and Atlantic coasts in order to increase national security. An Information Analysis Center will also be created in order to better manage and analyze information coming from security organizations around the country and attempt to reduce criminal activity. GIS&T will be needed to manage and analyze the spatial dimensions of such information, which could significant reduce crime in target areas (such as has been done in the City of Lincoln Nebraska, by as much as 67% in the first seven weeks of their system).

b.

National Strategic Plan for Science, Technology and Innovation

SENACYT has developed a Strategic Plan for Science, Technology and Innovation for the period 2010-2014. The specific objectives of the actions envisaged in the plan rests on the development of human capital needed to build a society whose development is supported by knowledge; the development of innovation, as much in business as in social terms; and the potential of applied science to find solutions to the country’s social and productivity problems. Six strategic lines of action were elaborated, which are 1) High-impact Initiatives in Priority Sectors; 2) Strengthening Human Resources and Scientific & Technological Infrastructure; 3) Generation and Dissemination of New Knowledge with High Potential for Application to Panama’s Development; 4) Strengthening and Promotion of Business Innovation Activities; 5) Improvements in Teaching, Dissemination and Popularization of Science, Technology and Innovation; and 6) Strengthening Public Institutionalization of the Panama System of Innovation for Competiveness. SENACYT’s implementation of the strategic plan addresses the following key priority sectors for science, technology and innovation development: Biosciences and Health Sciences; Agriculture and Livestock, Aquaculture, Fisheries and Forestry; Basic Sciences; Social Sciences; Education; Industry and Energy; and Logistics and Transportation. The SENACYT plan outlines sets of initiatives developed under the framework of each key sector strategy which include not only strategic projects in those priority sectors but also the support for the creation and installation of international centers of excellence in Panama. A number of specific initiatives are proposed which would benefit from enhanced GIS&T capacities. These include the planned biodiversity Gene Bank, which would be physically distributed in various places given the very different climatic and geographic requirements of species, whereby GIS&T could contribute to the optimization of locations for operations. For basic sciences, the plan promotes training in the management of geographic information systems, development of databases, data

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mining, and technologies for networking. In the energy sector, proposed initiatives include a national level survey to gather, update and collect and map data on renewable energy potential to help attract international power generation projects and support improved access to electricity in remote villages. The plan also claims that “it is necessary to create a geographic information system, especially for monitoring forest resources and addressing issues of vulnerability and risk.” Similarly, GIS&T would support a spatial system for environmental information by geographic area as a reference tool for evaluators of environmental impact studies and ecosystem services valuation. SENACYT’s strategic plan also calls to “establish monitoring systems, early warning and geographic information systems in major coastal and marine areas of the country (Bocas del Toro, Panama Gulf, Gulf of Chiriqui Gulf of Montijo, aquaculture development area and fishing areas and industrial)” with a target of installing five such networks for monitoring coastal and marine areas.

c.

Other Relevant Plans / Projects

Significant other plans and projects are in place that directly relate to, support, and could draw from the establishment of a Latin American GIS&T Center for Innovation in Panama: The country’s National Geographic Institute (known as “Tommy Guardia”) is investing $3 million in digitalizing its cartographic information. This modernization of Panama’s national mapping data is part of a project called the National Geographic Information System (Signal) which also seeks to enable the country’s cartographic data to be accessed via a web interface. The goals of the project are to make mapping technology available for scientific research, resource management, archaeology, environmental impact assessments, urban planning, cartography, sociology, geographical history, logistics and publicity, to name a few applications. A budget request of another $20 million by 2011 is key to the implementation of higher level data projects included in the plan, which focus on poverty maps, detailed population distribution and the visualization of urban and rural structures, among others. Tommy Guardia’s efforts require professionals trained in technical and professional disciplines such as geography, GIS, and also agrology, soil science, and others. Tommy Guardia has proposed institutional agreements with internationally renowned universities to support professors and senior researchers to come to Panama and train students under the framework of visiting professors or to conduct short training programs in institutions who will serve as nodes in the national data infrastructure, such as at Tommy Guardia, the Comptroller General of the Republic, the Environmental Authority, SENACYT, and others. Beyond demand, the effort represents one significant enabling piece for this proposed GIS&T Center: digital spatial data. High level staff at Tommy Guardia have participated in the consultations and the Knowledge Partnership and are supportive of this center’s concept. The National Authority for Government Innovation (AIG) has put forward a preliminary proposal to consolidate information and create a National Geographic Information System (GIS) among public institutions to benefit all entities. The system provides for integrating and storing all geographic information collected, maintained, and used by public institutions. Their proposed plan will allow the government to consolidate detailed digital spatial information available for national level planning and decision-making. AIG states that the “project will allow us to maximize the investment that the

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state is doing in the purchase, renovation and maintenance of the 17 existing geographical information systems … avoid individual efforts of institutions, which will allow us to unify efforts, reduce costs and improve the effectiveness of the system.” Among the activities are to develop protocols to make and share GIS information systems among public institutions, while setting out mechanisms for use by third parties or the public. Among other institutions, the project is being initially implemented with the National Geographic Institute Tommy Guardia, the Comptroller General of the Republic, the Public Registrar, the National Land Administration Authority, the Ministry of Agriculture, the Ministry of Public Works, the Ministry of Economy and Finance, the Tourism Ministry, the National Police, the Cadastral Office, the Ministry of Housing, and the President’s Council for Sustainable Development. This effort represents at least two significant enabling elements for this proposed GIS&T Center: national spatial data infrastructure and the engagement of public institutions around an enterprise GIS concept. The Director of Projects at AIG, Octavio Garcia has participated in consultations and is supportive of the creation of a GIS&T Center of Excellence and is enthusiastic about the prospect of collaboration with international participants around these emerging efforts. The National Institute for Vocational Training and Capacity Building for Human Development (INADEH) has developed a special effort around a National Development Plan for Technical and Professional Training in response to potential needs arising as part of the planned megaprojects in Panama. These explicitly include the work for the Panama Canal expansion, construction of the Cinta Costera Bay Sanitation works, the construction of large buildings in Panama City, Hydroelectric projects in Bocas del Toro, tourism projects, construction of highways, ports, megaports, airports, and others. The objective is to ensure technical education with quality requirements demanded by the productive sectors that will participate in the implementation of these megaprojects at the national level. An estimated 20,000 people are slated to be trained nationwide in various programs for skill training. High level staff from INADEH indicate that in all relevant areas of technology, training needs have been identified and training programs have commenced, except for geospatial technologies. While it is clear to INADEH that geospatial skills will be necessary and are included in their strategic plan, neither the precise needs nor training mechanisms to accomplish this have yet been identified. Beyond demand, this effort represents one significant enabling piece for this proposed GIS&T Center: a training platform (less expertise) for capacity building in geographic technologies. High level staff at INADEH have participated in the consultations, are supportive of the establishment of the center, and anticipate collaboration with their efforts. In sum, a number of critical enabling elements are in place within Panama for establishing a Latin American Center for GIS&T Innovation for Economic Development, including modern digital spatial data, national spatial data infrastructure, support from the public sector, and a training platform for capacity building in geographic technologies. Through SENACYT, the Center could provide the impulse, coordination, expertise, and direction for studies, advanced capacities, international linkages, and research directives that take full advantage of this momentum.

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d.

International / Regional Linkages

The vision for enhancing GIS&T capacity in Latin America is inherently and necessarily an international one. Within the context of a globalized economy, economic development within any particular country cannot be considered in isolation and requires consideration of international trade linkages, global competition, and regional cooperation. For example, the Panama Canal itself is an international asset which is integral to development in many other countries besides Panama, while Canal users contribute significantly to Panama’s national economy. Social and environmental problems do not always end at country borders. For instance, the impacts of natural hazards such as hurricanes or earthquakes do not respect national boundaries, as seen too frequently in the Caribbean Gulf. In this context, internationalization has become a priority for both government and higher education. Organizations such as the OECD understand that the “talent-catching and knowledge-producing capacity of higher education has become a vital sign of a country’s capacity to participate in world science and the global economy” (Hazelkorn 2009).6 Moreover, student mobility is one of the main forms of internationalization and countries with high levels of international students benefit from the contribution they make to domestic research and development, while those with low numbers find it “more difficult to capitalize on this external contribution to domestic human capital production” (OECD 2007).7

Likewise, the geospatial industrial, public, and academic landscape is a worldwide phenomenon. There are many regional and global organizations which use and promote GIS&T activities and coordination at these scales, although none are specifically designed to operate like this proposed center. While this document is not intended to comprehensively inventory all of these international linkages, in this section, some of the key international organizations that have participated in consultations and the Knowledge Partnership are briefly described. A few other important organizations where linkages with these key players are strong are also mentioned. These linkages are also important for the long-term sustainability of a potential GIS&T center, whereby multiple national and international institutions with a stake in the center may provide a diverse portfolio of resources and can withstand ups and downs due to economic, social or political cycles of change. The Association of American Geographers (AAG), as described above, is an individual member-based academic and professional society focused on geography and GIScience. AAG has initiated and collaborated on many research, education, and policy programs across the region, with academic, governmental, non-governmental, and private sector entities. The more than 10,800 AAG members hail from all sectors in virtually every country in the Western Hemisphere and its conferences and publications engage scholars and practitioners from Latin America, including some events and materials in Spanish. AAG has a significantly large group of specialists in Geographic Information Science and Systems, as well as other groups that specialize in Remote Sensing, Spatial Analysis, Latin American studies, and many other topics. For this Center, the AAG’s

6 Ellen Hazelkorn, 2009. “Higher Education Rankings and the Global ‘Battle for Talent’” in Higher Education on the Move: New Developments in Global Mobility. New York: IIE. 7 Organization for Economic Co-operation and Develompent, 2007. Education at a glance. Paris: OECD.

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experience particularly with capacity building and research directions, as well as its ability to facilitate and coordinate large-scale collaborations in an agile manner proves valuable. Established in 1928, with headquarters in Mexico City, the Pan American Institute for Geography and History is the oldest specialized agency of the Inter-American System and the one responsible for the spatial component for the Organization of American States (OAS). PAIGH consists of 21 Member States and four Commissions: Cartography, Geography, History, and Geophysics. PAIGH’s close ties with the national mapping agencies of virtually every government in Latin America and the Pan-American Agenda, which includes important geospatial study and policy directions, proves valuable in the potential establishment of a GIS&T Center. PAIGH organizes technical assistance projects and workshops in member states. In addition, PAIGH has particular expertise and involvement with data standards development and interoperability activities in the region, including around national and international spatial data infrastructure development efforts. The United Nations Environment Programme for the Latin America and Caribbean Region (UNEP-LAC) is headquartered in Panama City. Its mission is to provide leadership and encourage partnership in caring for the environment by inspiring, informing, and enabling nations and peoples in the LAC region to improve their quality of life without compromising that of future generations. Geographic technologies are utilized at UNEP-LAC across many functions, activities, and initiatives. Their medium term strategy 2010-2013 outlines thematic priorities of an environmental agenda that promotes the coherent implementation of the environmental dimension of sustainable development within the United Nations system. This new strategy places emphasis on capacity building and technology transfer, ensuring UNEP’s interventions are based on sound science. UNEP-LAC is also working with the UTP in Panama on a convention for hosting GIS infrastructure and providing support for related study and training activities. The International Geographical Union (IGU) brings together national organizations of scientists from throughout the world in order to promote the study of geographical problems; initiate and coordinate geographical research requiring international cooperation, and promote scientific discussion and publication of such research. It provides for the participation of geographers in the work of relevant international organizations, especially the International Council of Scientific Unions. Its committee system offers research directions and structures of value for a GIS&T Center. Other organizations in geography and GIScience that are active in the region and relevant to the establishment of a GIS&T Center of Excellence include but are not limited to: The Global Spatial Data Infrastructure Association (GSDI) which promotes international cooperation and collaboration in support of local, national and international spatial data infrastructure developments and has a Latin American regional component; The Open GIS Consortium which is an international, voluntary consensus standards organization; The Committee on Earth Observation Satellites (CEOS) which aims to enhance international coordination and data exchange among 50 member space agencies, national, and international organizations; SERVIR Regional Visualization and Monitoring System for Mesoamerica which uses data collected by NASA and by countries throughout Mesoamerica to produce real time and near real-

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time products that relate to a number of environmental applications; CentroGeo Mexico, a public research and educational center supported by the Mexican National Science Foundation that is focused on integral solutions for sustainable development of public, private, national and international organizations through Geomatics and contemporary Geography; the PanAmerican Center for Geographical Studies and Research (CEPEIGE) an autonomous program of PAIGH which pursues academic activities in the discipline of geography. Within the business sector, new companies are emerging throughout the region, while an important long term private sector relationship remains with ESRI, including their Latin American distributors network. See also Appendix 2 for further information.

2. Business Model

In extensive consultation with local and regional participants, the structure, operating framework, and business model for the center was discussed at length by the participants in the Knowledge Partnership of this project to determine how best to simultaneously serve the Panamanian case and address regional needs. To identify models that could be combined and adapted to fit the present need, three factors emerged as major considerations. Because there was strong consensus about the importance of engaging different universities, both nationally and internationally, around the research and educational agendas, the NCGIA multi-university consortium model was recommended as a successful example to contemplate. Because there was strong consensus about the importance of engaging all sectors, public private, academic, and non-governmental, in the creation and support of the center, the I/UCRC model emerged as a highly salient framework for successfully structuring the engagement of the suite of multi-sectoral actors. Because of the unique moment in time that Panama as a country finds itself with respect to consolidating and transforming existing GIS&T activity and resources, the experience of the Republic of South Korea proves insightful and offers potential pathways for successfully moving this current effort forward. The National Center for Geographic Information and Analysis (NCGIA)

is an independent research consortium dedicated to basic research and education in geographic information science and its related technologies, including geographic information systems (GIS). The three member institutions are the University of California, Santa Barbara; the University at Buffalo; and the University of Maine. The consortium was formed in 1988 to respond to a competition for funding from the National Science Foundation, and continues to receive much of its funding from that source. Total funding to the consortium amounts to approximately $5 million per year. Today, NCGIA stands as an international focus for basic research. Its three sites attract short- and long-term visitors from around the world, and its educational programs address the needs of students at all levels. The NCGIA’s lean organizational structure is a strength and provides the advantage of a flexible and agile platform for collaboration among its many affiliates and participants.

The National Science Foundation's (NSF's) Industry/University Cooperative Research Centers (I/UCRC) have led the way to a new era of partnership between universities and industry in the US, featuring high-quality, industrially relevant fundamental research, strong industrial support of and collaboration in research and education, and direct transfer of university developed ideas, research results, and technology to U.S. industry

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to improve its competitive posture in world markets. With industrial and other support totaling 10 to 15 times the NSF investment, I/UCRCs are a premier example of leveraged funding—a model for the Federal Government in how to develop cost effective synergy with the nation's research and development process. Indeed, this model has directly influenced several other centers programs that were subsequently established by NSF and other Federal agencies. Placed in this context, the I/UCRC Program is a distinctive driver of the growing NSF industry-university partnership. The emphasis in the past few years has been the establishing of nearly 30 multi-university I/UCRC centers. The benefits from this pooling of resources are numerous. The structure of a typical I/UCRC includes a Center Director hosted within a participating university. The various research programs usually consist of several projects with a strong focus on an industrial interest. These projects will often involve graduate students under the direction of faculty researchers. The partnership consists of one or more universities and typically a number of private sector organizations, taking full advantage of the strength of each participant. University faculty contribute their skills in research and their understanding of the knowledge base; industrial researchers contribute their knowledge of both the technical needs of industry and the challenges associated with competing successfully in the marketplace. The partnership is formalized in each Center's Industrial Advisory Board (IAB), which advises the Center's management on all aspects of the Center, from research project selection and evaluation to strategic planning. It is important to note that all IAB members have common ownership of the entire I/UCRC research portfolio; however, individual firms can provide additional support for specific “Enhancement” projects under separate arrangements with the respective university. The Experience of the Republic of South Korea is insightful for the aspects of this Center that engage with the national level strategies and initiatives in Panama to develop GIS within the country. In Korea, public institutions and local governments began to use GIS in the early 1980s. Applications were gradually extended, and the need for national standards and criteria essential for data compatibility began to emerge. Korean officials and scientists discovered that “with multiple GIS projects being conducted by separate institutions, problems arose such as duplicated data implementation, lack of compatibility and quality deterioration. It soon became evident that it was necessary to formulate national standards and present a diversity of standards so as to prevent waste and improve data interoperability.” Thus a well-structured National GIS Master Plan was established and developed by the Korean government in May 1998 that created, among other improvements, a National Spatial Information Infrastructure (NSDI) and lead to the development of the National GIS (NGIS) Project in 1995. Under this initiative, the nation has “expanded infrastructure for national spatial information through various efforts including framework data construction, standards setting-up, technology development, GIS education and distribution network construction. During the first five years of the project (1995~2000), the infrastructure for fundamental spatial information was constructed, which included converting existing paper topographic maps into digital maps, and digitizing cadastral maps, underground facilities maps and road network maps. The next 6 years of the project (2001~2005) set up the institutional infrastructure such as establishment of related laws. Also, a GIS-based administrative information system was established and applied for each individual sector.” On this basis, public institutions have improved their administrative efficiency and public services. Also, private enterprises have contributed to activating the service industry

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exploiting geospatial information. The present status of Korea’s National Spatial Data Infrastructure includes activities around Framework Data, NGIS Standards, a National Geographic Information Clearinghouse, and NGIS Technology Development. In addition, the Korean government has launched national level activities for promoting GIS Training and Education, for strengthening institutions and organizations for and through the use of GIS, and undertaking significant Research Projects for the NGIS. Some of the featured emphases include projects for Korea Land Information Systems, Roads and Underground Facilities Management Systems and Korea Planning Support. Further information about the Korean experience is available in Appendix 3.

3. Capacity Building Approach The need for skilled knowledge workers in Panama and throughout Latin America to develop and implement GIS&T management systems in industry and government is critical to the development and regional competitiveness of these economies. The sections above discuss this demand. However, many countries in Latin America have not yet taken full advantage of these technologies for advancing their own economic and social development goals. Two key obstacles to implementing these technologies are 1) Research and Development (R&D) capabilities, particularly with regard to regional-scale systems development, as well as technology transfer pathways, that are weak; and 2) workforce / professional development efforts that are either nascent and/or not systematically linked to either key strategic sectors or socioeconomic demands. An important key step in addressing these obstacles is to advance GIS&T capacity and cyberinfrastructure for innovation and economic development within Latin America. The recommended approach for building and enabling capacity is focused on fundamentals as applied to an initial set of strategic themes. With Panama’s commitment to participate, beginning capacity would center on Panamanian priorities, which are also relevant throughout the region, and would include participants from through the region as well. This would serve as both a model to be replicated in other places and also as a hub or networks that concentrate an international set of resources directed towards GIS&T oriented toward a range of social and economic development applications that are most relevant to the hemisphere. The recommendations for a capacity-building framework is based in part upon the AAG’s experience with designing and implementing geographic technological capacity building events and programs around the world, from past programs in Panama that engaged 7 countries of Central America; the Philippines, Singapore, and other nations in Asia; Tunisia and 11 other countries in the Middle East; Kenya and 9 other countries across Africa; and many others over the past decade. Drawing from this work and the collective work of AAG member experts and partners, the recommended capacity building approach goes beyond mere “training” to engage with the fundamentals of geosciences and geography. Successful pedagogy and curricula ensure that human resources know the “why of where” and not simply learn how to operate computer software: in other words, they receive skills training plus knowledge building. This recommended framework is the GIS&T Body of Knowledge which is a document that specifies what aspiring geospatial professionals need to know and be able to do. First published in 2006 by the Association of American Geographers (AAG) with the University Consortium for Geographic Information Science (UCGIS), and developed by the UCGIS and others, the GIS&T Body of Knowledge is a comprehensive approach to

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understanding the basic skills and knowledge relevant to the rapidly growing GIScience and technology fields. It includes ten knowledge areas, 73 units, 329 topics, and over 1,600 formal educational objectives. There are teaching modules and other companion materials in development by the geospatial community that can also be adapted to fit the needs of the region. The GIS&T Body of Knowledge is:

• A resource for course and curriculum planning for academic and professional programs at four-year and two-year institutions.

• A basis for comparison of educational programs by prospective students • A basis for professional certification (the GIS&T Body of Knowledge used by

the GIS Certificate Institute to adjudicate applicants’ educational achievement point claims)

• A basis for program accreditation • A basis for articulation agreements between and among two-year and four-

year higher education institutions • A resource for human resources professionals seeking guidance in employee

recruiting, selection, and continuing professional development. The main topics of interest to a Latin American Center for GIS&T for Innovation and Economic Development relate to:

• Analytical Methods • Conceptual Foundations • Cartography and Visualization • Design Aspects (system design) • Data modeling • Data Manipulation • Geocomputation • Geospatial Data • GIS&T and Society • Organizational and Institutional Aspects

Further illustrations can be found in Appendix 4. As for the kinds of capacity building activities that utilize this GIS&T Body of Knowledge content, the Center would encourage and foster the development of collaborative training and education through a multiple set of delivery mechanisms that are appropriate to Panama and the Latin American regional situation. Because this Center is strategically oriented, activities would be tailored in relevant ways to the respective social / economic development goals. These include workshops that are focused on specific applications (multiple competencies) as well as those that are focused on specific competencies (multiple applications). Particularly for applications at advanced levels and engaging with international collaborators, conferences and symposia would present appropriate mechanisms for technology transfer and knowledge sharing. The AAG’s Space-Time Integration in GIScience Symposium (Seattle 2011) and the Institute for the Integration of Research on Climate Change and Hazards in the Americas (Panama 2010) are two recent examples. In addition, online or distance learning offerings may supplement especially where international collaborators figure in. Support for development of particular University curricula or additional degree

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offerings that are strategic, would not only include financial considerations but also the networking platform that facilitate design at a world-class level. Sandwich degree programs which are promoted in SENACYT’s Strategic Plan would also be models that could be encouraged with long-standing GIScience departments. Short-term faculty and/or professional exchanges would form part of many of these programmatic mechanisms or could become stand-alone activities. Finally, the AAG’s experience with mentor networks and especially peer-to-peer mentoring indicates that such models should also be incorporated into the capacity building approach for the Center.

F. Research Agenda

The research agenda presented in this section derives from the above discussion which reflects a process of collaboration that has unfolded over the course of the establishment of the Knowledge Partnership. As such, it has necessarily evolved over time as discussions have shaped its scope and focus. Over the course of this process, original attention to a single sector or one priority area as an initial application area has justifiably transformed into the realization that the opportunity for a GIS&T center should be oriented around fundamentals of GIS&T, where the starting point are fundamental datasets, geospatial competencies, geographic technologies and GIScience, as opposed to one specific application such as environment, transportation, health, logistics, tourism, etc. This will permit the possible establishment of a Center that is better articulated with the range of socioeconomic development demands and better enhances the integration of activities across priority sectors, since the human and infrastructure needs in the region at present require fundamental geospatial enhancement. As an agenda, it is intended as an overarching framework for not only advanced research activities that could lead to innovation, but also more applied studies that immediately relate to socioeconomic development needs. It integrates a capacity building perspective that privileges education of fundamental geospatial concepts as well as competencies and skills. It draws from and seeks to build upon the strengths of the respective participants in the GIS&T Knowledge Partnership.

1. Consultation Meetings and Identification of Key Partners Information about many of the consultations has been included in previous reports or deliverables. The culmination of consultation activity took place with a formal planning meeting for “Enhancing Latin American GIS&T Capacity for Innovation and Economic Development” held on December 1-2, 2010 at the Hotel Country Inn Amador, Salon Las Americas in Panama City, Panama. This meeting gathered approximately 40 representatives of universities, government agencies, research centers, mapping agencies, the Panama Canal Authority, international geography organizations, and others from Panama, Latin America, the U.S. and Korea (see also Appendix 5). In the course of the first day, attendees heard presentations which illustrated the current state of activities and expertise among national and regional/international organizations based in Panama in the field of geospatial science and technology, and were able to learn about other high-level international experience and efforts in this field that might serve as useful examples for the region. Discussions identified gaps and needs in both the education and research areas for GIScience in Panama and Latin

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America, and also pointed out the gaps in the preparation of a workforce with geospatial and capacity. During the opening session, Dr. Rubén Berrocal, the Secretary of SENACYT, also shared with all those present SENACYT’s support of this meeting and its purpose: to discuss the establishment of a center to further facilitate and coordinate development of research, education and workforce capacity building in geospatial science and technologies in Panama for the country and for other Latin American countries. On the second day, more in-depth planning discussions ensued, and focused around structure, function, and activities, but also topical applications that inform this research agenda.

2. Results from Consultations The assessment and analysis by the meeting participants and also the consultations prior to the December culmination event emphasized the following special needs, among others, for enhancing GIS&T capacity:

• The need to achieve continuity in university programs around capacity and knowledge in GIS&T, and to enhance individual as well as institutional capacity in public and academic sectors. This implies finding ways to sustain developed capacity and to ensure that it is not lost when administrations change or new personnel replace existing skilled staff.

• The need to engage policymakers in understanding the key roles of geography and GIScience in addressing environmental protection, urban development, sustainable tourism, public health, social justice, transportation and logistics, and other national and regional development goals.

• The need to encourage sharing of geographic data and information as well as geographic expertise and knowledge more broadly across disciplines and sectors. This implies public access to geospatial data and mechanisms to engage local populations in the design and development of national mapping programs.

• The need to encourage central repositories of fundamental geospatial datasets at national levels including maintenance and updates. Linkages to regional level geospatial portals facilitate sharing across national borders, to foster trade and cooperation on environmental protection and economic development programs throughout Latin America.

• The need to coordinate data collection procedures, comply with metadata standards, ensure interoperability and follow online data dissemination protocols to permit multiple applications by a multitude of organizations, researchers, educators, and individual citizens. Data standards coordination is already underway and many countries of the region are participating, but further progress is needed.

• The need to create curricula for geography, GIScience and GIS in the education system, and to emphasize fundamental principles of GIScience and technology, rather than only applications.

• The need for articulating research, studies, education, and capacity building with strategic plans at the national and international levels.

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• The need to multiply the geospatial workforce at various levels, from technical to advanced, without replacing existing institutional mechanisms, filling in gaps and niches that vary across sectors and application areas.

3. Strategic Research Directions The priorities for strategic research that emerged from this effort can be summarized as follows: Geographic technologies applied to leverage innovation in key sectors for

economic and social development • Environmental and Biosciences • Health • Agriculture and Forestry • Education • Natural Hazards, Climate Change, Vulnerability, Disaster Reduction and

Humanitarian Response • Energy • Logistics and Transportation (see also Appendix 6 for case study example) • Tourism • Security

Research related to GIS&T, Geography, and GIScience in the region • Research on how online spatial databases, mobile mapping, GeoCloud

computing, GPS technologies, geospatial crowdsourcing, and similar technologies and processes contribute to social and economic development in the Latin American context, particularly given their potential impact and rapid inclusion for development applications

• Further assessment and understanding of consolidation and expansion pathways for geocyberinfrastructure in the hemisphere (and beyond)

• Finer scale identification of geospatial information technology and workforce capacity requirements

• Interoperability and standards development and implementation status • Comprehensive analyses of geographic / geospatial educational offerings,

related academic mobility, and educational needs across the region • Follow-up studies on international research collaboration among

geographers/GIScientists in the Americas

“Enhancement” topics as urgent opportunities and/or specified funding arises

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Proposed Implementation Plan for the Establishment of a Latin American Center of Excellence in Geographic Information Science and Technology (GIS&T) Innovation for Economic Development

G. Implementation Plan for Center Establishment (Phase II)

Based upon the design considerations that emerged from the study and consultations as reported above, this section provides a recommended implementation approach for establishing a Latin American Center of Excellence in Geographic Information Science and Technology Innovation for Economic Development. The center would be hosted in Panama with the National Secretary for Science, Technology and Innovation (SENACYT) and would engage organizations from the public, private, non-governmental, and academic sectors internationally. The mission of the center would be to enhance GIS&T research and educational capacity in Latin America through innovation that leads to development that addresses social, political, economic, and environmental needs in the region. To achieve this mission, the center would establish specific short-term objectives that support the development of cyberinfrastructure and capacities of individuals as well as institutions. It would promote directions for measurable research and educational outcomes in GIS&T to be pursued collectively through distributed collaborations among the existing Knowledge Partnership and other participants or networks. It would provide unique mechanisms for overcoming traditional barriers to GIS&T collaboration across national and institutional boundaries in the region. It would present an international platform for realizing innovation in priority sectors according to standards of excellence.

1. Organizational Structure

The proposed organizational structure is adapted from relevant features of the models of the NCGIA and I/UCRC as described above. The example chart below shows how the relationships among participants could be structured and provide a framework for the efficient and effective administration of resources.

SECTION: Technical Cooperation COMPONENT IV

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Sample Organizational Chart

The Center itself would be implemented by SENACYT as the entity responsible for fiscal and administrative functions. From consultations, clear consensus emerged that SENACYT would serve as the most appropriate and effective host for the center, at a minimum for the initial establishment period, given that this institution currently enjoys productive working relationships across all sectors in the scientific community, has established ties with international academic and research organizations, and has demonstrated an ability to sustain successful programs over periods of administrative change. The location of the center would be distributed, as a network of organizations, although three center personnel could be hosted within the offices of SENACYT or a location determined by SENACYT. The physical location of activities that the center undertakes would vary according to the type of activity and the partners involved in any particular effort. For example, a university may host training events in existing

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computing laboratories, symposia may take place at conference centers, and research exchanges at the respective study site, all under the rubric of the GIS&T center. The digital presence of the center may be mirrored with any of the partners with sufficient computing resources and technical support. The center would be governed by a Board of Directors that includes nine members: one from SENACYT, 2 from governmental agencies, 3 from academic or nonprofit institutions, 2 from private enterprises, and at least one regional or international organization representative. The Board of Directors would be responsible for setting policy and overseeing the center’s mission. It would also solicit candidates and select the position of Executive Director. The Executive Director would be responsible for executing the mission of the center according to the policies established by the board. The Executive Director would also be responsible for administering the financial resources according to the board-approved budgetary framework and lead development of additional resources for sustaining the center. The director would manage center staff and oversee the integration of research, education, and extension along strategic directions. A call for candidates would be developed by the board of directors. We recommend that the knowledge and skills for the position include an advanced degree such as a doctorate in a related field (although not necessarily GIScience), international experience in science and technology, and ideally demonstrated skill in establishing and leading new efforts similar to the size and scope of this center. Other center staff would initially include two positions. The Director of Capacity Building would be responsible for developing and executing the educational agenda and would supervise contracted training and workshop instructors, contracted materials development experts, and contracted temporary events support staff, when applicable. This person would also liaison with universities and educational institutions as well as organizations collaborating with, contributing to, or receiving benefit from the capacity building activities. The hiring profile for this position should consider a person with a higher degree in a field related to GIScience and Technology, such as a Master’s degree, as well as practical experience in initiating and organizing workshops, courses, learning programs, and/or curriculum. The Director of GIS&T Applications for Development would be responsible for developing and providing facilitation, support, promotion, and monitoring of activities oriented toward innovation, linkages, and development among sectors. This would necessitate engaging organizations both internal and external to the center in public, private, and NGO sectors. This may include responsibilities for specific linkages within and among the national government, such as relationships with AIG and Tommy Guardia, research groups within national and international universities, R&D units in industry and private enterprises, and other key actors for economic development driven by geospatial technologies applications. Tasks would include managing the calls for participation in studies and enhancement activities promoting GIS&T. The hiring profile for this position should take into account a person with a higher degree in a field related to GIScience and Technology, such as a Master’s degree, as well as formal training plus practical experience in project management / administration. The individual should possess international experience and communication skills that the collaboration warrants, including foreign language skills.

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The functional operations of the center, including office services such as web, legal, or accounting; contracted facilities services if not provided directly; and possible ad hoc research support services on an as-needed basis, might be met directly with existing units within SENACYT or by another participating institution, or outsourced by subcontract. The respective institutions engaged currently in the Knowledge Partnership would be joined by other relevant participating institutions and organized into consortia by private, public, and academic sector. The Consortium of Center Members would provide guidance and contributions of financial and/or institutional nature to the center operations. Researchers from any sector coming from these member institutions would be eligible to participate in funding competitions or calls for participation issued by the center. Competitively-selected or appointed researchers working on center-directed studies would be identified as Research Affiliates whose time and/or expenses could be supported by center resources and whose work would be overseen by the Executive Director. The Board of Directors may also appoint three committees to assist with Strategic Planning, Budgeting and Finance, and Technical Advisory matters. The committees would respond to board directives. Once the center is functioning, the need for additional legal or autonomous status that might be needed to enable performance toward center objectives could be considered. For instance, seeking either creation of nonprofit status in Panama and/or as a 501(c)3 in the US may prove advantageous for acquiring funding source eligibilities; alternatively such services could be provided by member organizations.

2. Plan for Research / Educational Outcomes and Indicators of Success The establishment phase of a Latin American GIS&T Center is expected to occur over the course of a three-year period to permit sufficient time for results to materialize from efforts to procure sustained resources. The Board of Directors should initially meet at least twice per year to oversee the establishment process. An event to launch the center with members of the Consortia should occur within the first quarter of activity. A more detailed annual schedule of activities and deliverables should be presented at that time, in conformance with the eventual scope of resources available for the center and taking into account the timing needs of committed organizations. This schedule should aim towards particular outcomes that are linked to indicators of success in enhancing GIS&T research and educational capacity in Latin America. Many of these anticipated outcomes would directly relate to SENACYT’s Strategic Plan. The table below maps a set of recommended outcomes to target and also indicates example indicators which could be used as tangible, concrete measures of success.

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Anticipated Outcome Example Indicators of Success

Support for the creation and installation of an international center of excellence for GIS&T Innovation in Panama

• a Functioning Center

Strengthened GIScience and geographic technological cyberinfrastructure in Panama and the region

• Engagement of geographic technologies in at least 2 major planned infrastructure projects

• 3 annual competitive solicitations / calls for proposals for GIScience cyberinfrastructure projects and/or geospatial data standards development projects 3 selected institutional projects

Geospatial expertise identification and tracking • at least 200 persons identified from across the

hemisphere with highly relevant GIS expertise and/or talent

Strengthened geospatial technical training in applications related to priority sectors

• Completion of a focused training needs assessment on GIS technical education

• Curriculum enhancement support for at least 2 geospatial competency areas (GIS&T Body of Knowledge)

• 2 short term professional GIS expert exchanges

Strengthened universities to augment GIS education

• 1 workshop with international experts from the Knowledge Partnership focused on a specific application (multiple competencies)

• 1 workshop with international experts focused on a specific competency (multiple applications

• Identification of at least one potential “sandwich degree” program collaborator

• 3 short-term GIScience faculty exchanges

Support for the advancement of GIS professional Master’s level and advanced GIS certificate programs in Panamanian universities, particularly oriented toward priority sectors

• 1 new online/distance learning course in GIS offered by a Panamanian university to the region

• 1 new GIS course oriented toward a priority sector within the professional GIS program

Increased GIS&T R&D innovation activities targeted toward specific issues related to socioeconomic development

• 3 annual competitive solicitations / calls for proposals for international collaborative GIScience innovation projects 5 selected projects targeted at specific problems

Support for GIS&T research excellence clusters

• 1 international research group/peer network created or supported

• Continued existence of the GIS&T Knowledge Partnership created through this effort

• At least 1 conference or symposia

Execution of Strategic GIS&T projects in priority sectors

• 3 strategic GIS&T projects related to national priority sectors and drawing from this effort’s Research Agenda

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3. Cost Proposal

At the December 2010 consultation meetings, the group recommended that initial funding be divided according to the following guidelines: 60% to develop the activities of the multi-university, inter-sectoral consortium center; 30% to fund research grants allocated on a competitive basis to address strategic national and regional priorities with GIS&T applications; and 10% to cover administrative costs and standards development activities. Estimates for an initial three-year center establishment budget to accomplish a scope similar to that described above totals $2,250,000. The draft budget spreadsheet on the following page elaborates the expected start-up expenses following the above design and activity plan. The breakdown for this estimate includes center salaries for the three positions described above at competitive rates to attract talent to those positions, plus fringe benefits at a 25% percent rate. Personnel costs also include a number of budget line items for outsourcing work and accommodate support for expert research affiliates to work on core center strategic projects. Travel for staff plus participant support for exchanges or events is included in the center establishment portion of the budget which totals 60%. The funds allocated for competitive grants amount to 30% for each year. Three categories correspond to the calls for participation as described in the recommended research and educational activities above. The remaining 10% is distributed for a small portion to cover personnel expenses related to data standards development activity or training, plus direct administrative costs for equipment, software, supplies, communications, publications, and related expenses. Additional costs may be incorporated into the budget of expenditures in accordance with specifications of additional funding revenue contributed by participating organizations, or “enhancement” investment, similar to the I/UCRC model.

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DRAFT BUDGET SPREADSHEET YEAR ONE YEAR TWO YEAR THREE

60% center establishment subtotal $450,000.00 $450,000.00 $450,000.00

Staff         Executive Director $75,000.00 $75,000.00 $75,000.00

Director Capacity Building $55,000.00 $55,000.00 $55,000.00 Director of GIS&T Applications for Development $55,000.00 $55,000.00 $55,000.00

Fringe estimate @25% $46,250.00 $46,250.00 $46,250.00

Outsourced Personnel         Research Affiliates $80,000.00 $80,000.00 $80,000.00

Training Instructors $45,000.00 $45,000.00 $45,000.00

Support functions $20,000.00 $20,000.00 $20,000.00

Training Venue Expenses $10,000.00 $10,000.00 $10,000.00

Accounting/Auditing $7,500.00 $7,500.00 $7,500.00

Legal Services $5,000.00 $5,000.00 $5,000.00

Facilities $2,000.00 $2,000.00 $2,000.00

Personnel Travel         Domestic $2,250.00 $2,250.00 $2,250.00

International $12,000.00 $12,000.00 $12,000.00

Participant Travel / Events/ Exchanges $35,000.00 $35,000.00 $35,000.00

30% grants subtotal $225,000.00 $225,000.00 $225,000.00

GIScience cyberinfrastructure projects $75,000.00 $75,000.00 $75,000.00 international collaborative GIScience innovation $75,000.00 $75,000.00 $75,000.00

other strategic research grants $75,000.00 $75,000.00 $75,000.00 10% administrative/data standards subtotal $75,000.00 $75,000.00 $75,000.00

Personnel for data standards activities $18,000.00 $18,000.00 $18,000.00

Center Operations         Office Rental, Furnishings, or Venues $10,000.00 $10,000.00 $10,000.00

Standards Training Venue Expenses $7,500.00 $7,500.00 $7,500.00

Computer Equipment or Support $15,000.00 $15,000.00 $15,000.00

Software, Upgrades, Licenses $5,000.00 $5,000.00 $5,000.00

Supplies $1,500.00 $1,500.00 $1,500.00

Direct Expenses

Internet & Phone $1,000.00 $1,000.00 $1,000.00

Communications $3,000.00 $3,000.00 $3,000.00

Materials & Publications $7,000.00 $7,000.00 $7,000.00

Dissemination & Website $7,000.00 $7,000.00 $7,000.00

SUBTOTAL $750,000.00 $750,000.00 $750,000.00

TOTAL (3 Years) $2,250,000.00

enhancement investments TBD TBD TBD

30

4. Financing Strategy

This planning and feasibility phase has had the support of the IDB’s Knowledge Partnership Korea Fund (KPK). This fund supports projects in areas related to e-learning, e-government, information management, institutional strengthening through technology, innovation, communication network integration, and other topics. The KPK is fully untied for procurement and all IDB borrowing member countries are eligible. KPK financing is available for technical cooperation and other supporting activities that have high priority in the IDB’s institutional strategy or in its programming. Funding is also available for studies and projects in science, technology, and information and communications technology. From 2006 to 2008, the KPK supported 40 projects totaling US$ 8.7 million. The top priority sectors supported by the KPK are information technology, telecommunications, science & technology, education, private sector development, trade and transportation. The maximum amount per project is US$ 1 million. The financing strategy for the implementation of this proposed Latin American GIS&T Center of Excellence in Innovation for Economic Development includes presenting this plan for consideration by the IDB-KPK for maximum project support. In addition, given the significant investments by the Panamanian government in megaprojects and the demonstrated relevance of strengthening Panamanian GIS&T capacity for effectively implementing or optimizing these efforts, it is expected that the public sector in Panama will be interested in contributing towards the remaining funds necessary for establishing the center. These funds may come from additional budget allocations, requests for proposals, or from expressly orienting the center’s activities in ways that can directly fulfill requirements already budgeted within these megaprojects, essentially filling in gaps for expertise or training in existing plans. Such investment is permitted by Panamanian Law (#13:1997, amendment #50:2005) such that: “The Panamanian government recognizes its duty to continuously and permanently foster activities of scientific and technological research, as well as the transfer and dissemination of the results of these activities as legitimate and fundamental tools for social advancement and economic development of our country. It also recognizes that financial support to science, technology and innovation is an essential part of this obligation.” The Center design calls for the development of linkages to other universities in the region, research centers, non-governmental agencies, as well as the private sector. (See again Appendix 2). To participate as a Consortia member, these organizations would make contributions to the Center, which may come in the form of significant in-kind services that can cover portions of the proposed budget (such as dedicating travel support for a workshop), etc., or as direct financial contributions. In addition, the Center may generate additional revenue to cover expenses by charging reasonable workshop or conference fees for cost recovery. It is anticipated that there will be additional need for equipment, software and data beyond what is included in the above budget, and that these could be donated “in-kind” by participating organizations. Additional sources of public/private monetary investment could be identified for developing “Enhancement” projects, much like the I/UCRC model that leverages further resources and expands the portfolio of relevant GIS&T activity within the center.

▀

31

Appendices

32

Appendix 1 Key Concepts Related to GIS, GIS&T, and Cyberinfrastructure Excerpted from earlier draft

A. What is GIS?

A geographic information system (GIS) integrates hardware, software, and data to capture, manage, analyze, and display all forms of geographically-referenced information (information identified according to location), regardless of the source of the data. A GIS can efficiently relate and display different layers of information in a spatial context to help better understand the relationships found within these layers. A GIS, therefore, can reveal important new insights that lead to better

decision-making. For example, with spatial data about variation in soil type, elevation, slope, rainfall, and temperature stored in a GIS, it is possible to calculate the most efficient or optimal vehicle transportation route between two warehouses using information about the most desirable conditions for each data layer.

Geographic information systems are now used for land use planning, utilities management, ecosystems modeling, landscape assessment and planning, transportation and infrastructure planning, market analysis, visual impact analysis, facilities management, tax assessment, real estate

analysis and many other applications.

B. What is GIS&T

Since the early emergence of GIS in the 1960s, "computing power has increased, data has become more plentiful, software has become easier to use, and the scope and complexity of questions that GIS is capable of addressing has expanded dramatically. GIS and related technologies are now widely used in government agencies, private businesses, citizens groups, and research institutions. As the demand for these technologies has

33

grown, as their applications have diversified, the field concerned with the development and use of technologies has also evolved. Today, GIS software is only one component of a broad domain of three interrelated subdomains" (GIS&T Body of Knowledge, p. 5). These subdomains are Geographic Information Science (GIScience), Geospatial Technology, and Applications of GIS&T.

C. What is Cyberinfrastructure and GIS&T Cyberinfrastructure

Cyberinfrastructure (also known as e-research, e-science, and e-infrastructure in Europe, Australia, and Asia) encompasses computing systems, data, information resources, networking, digitally enabled-sensors, instruments, virtual organizations,

observatories, interoperable software services and tools, and sophisticated applications (e.g., modeling, simulation, and visualization). Interdisciplinary teams of professionals are responsible for its development and use for discovery, learning, and scientific breakthroughs (NSF 2007, Educause 2007).

GIS&T have "today become critical components of the global cyberinfrastructure, both in the university and in society.

The integrative capabilities of these and related technologies have extended research frontiers across many fields, in areas ranging from biocomplexity to epidemiology to transportation engineering…GIS&T cyberinfrastructure also plays a central role in the larger society. A transformational feature on the GIS&T landscape, and a significant opportunity for our society, for example, will be the widespread continued development and implementation over the next several decades of interactive Geographic Management Systems (GMSs)…Currently evolving examples of GMSs range from simple applications, such as real-time management of vehicle fleets or delivery companies, to the continuous interactive management across space and time of the extensive fixed and mobile assets and workforces of highly complex operations, such as those of major electric utility companies, most modern military organizations, governmental emergency response agencies, national park agencies, automated transportation and logistics systems, and international disaster and humanitarian relief operations…" (Richardson in GIS&T Body of Knowledge, pps vii-viii).

34

Appendix 2 Additional Prospective Center Network Institutions The AAG maintains directories of organizations of interest to geography and GIScience in Latin American on its Spotlight Latin America pages of the website. Lists of additional prospective center network institutions can be found by sector:

•

•

Academic Departments

•

Non-Governmental Organizations

Governmental Organizations

www.aag.org/cs/projects_and_programs/developing_regions_programs/spotlight_latin_america

35

Appendix 3 Korean National GIS Project Report

2. AN OUTLINE OF THE KOREAN HOUSING MARKET

Establishment of National GIS of Korea

Korea RResearch IInstitute ffor HHuman SSettlements

KRIHS SPECIAL REPORT2007

Geospatial Information Research Center

Copyright 2007 Korea ResearchInstitute for Human Settlements

All rights reserved. Printed in theRepublic of Korea. No part of thispublication may be reproduced inany manner without writtenpermission from KRIHS except inthe case of brief quotationsembodied in critical articles andreviews. For more information,please address inquiries to: KoreaResearch Institute for HumanSettlements, 224 Simin-ro, Dongan-gu, Anyang-si, Gyeonggi-do, 431-712, Korea.

Anyang: Korea Research Institutefor Human Settlements, 2007

p.cmIncludes bibliographical referencesISBN 978-89-8182-528-7

113

Establishment of National GIS of Korea

Supply and use of computers have become widespread since the mid 1980's inKorea. In line with this, public institutions and local governments began to useGeographic Information Systems (GIS), and as GIS application was graduallyextended, the need for national standards and criteria has been raised that areessential for data compatibility. GIS also became spotlighted as a means by which onecan accurately identify and effectively manage underground facilities, following twotragic events: an underground storage tank explosion that occurred in Seoul in 1994,and an explosion at a Daegu subway construction site which occurred in 1995. Underthis backdrop, the need for the National GIS (NGIS) was actively discussed,culminating in the initiation of the NGIS Project in 1995. Under the NGIS Project, aMaster Plan has been established every five years. Also, under the initiative, thenation has expanded infrastructure for national spatial information through variousefforts including framework data construction, standards setting-up, technologydevelopment, GIS education and distribution network construction.

During the first five years of the project (1995~2000), the infrastructure forfundamental spatial information was constructed, which included converting existingpaper topographic maps into digital maps, and digitizing cadastral maps,underground facilities maps and road network maps. The next 6 years of the project(2001~2005) set up the institutional infrastructure such as establishment of relatedlaws. Also, a GIS-based administrative information system was established andapplied for each individual sector. Since 2005, the nation has been promoting a projectof advancing the National Spatial Data Infrastructure targeting informatization of thenational territory to accommodate the ubiquitous information environment.

Korea has expanded infrastructure for national spatial information over the past 12years, successfully implementing the NGIS Project. On this basis, public institutionshave improved their administrative efficiency and public services. Also, privateenterprises have contributed to activating the service industry exploiting geospatialinformation. It is my wish that this report, which summarizes the progress, will befrequently referred to by GIS experts overseas who are interested in the NGIS Projectof Korea. In particular, I hope that this report will be useful for developing countriesin Asia, who wish to learn from experiences and know-hows on NGIS construction ofKorea.

Byung-Sun Choe, Ph. D.President

Korea Research Institute for Human Settlements

FOREWORD

Establishment of National GIS of Korea

3

7

9

1010111414

1717222833394449

565661

65

Foreword

Authors

Acronyms and Abbreviations

1. Outline of Korea National GIS Sakong, Ho-Sang

1) Background and Purpose2) Process and Status of NGIS Project3) Functions and Roles of Korea Research Institute for Human Settlements4) Future Plan

2. Present Status of National Spatial Data Infrastructure 1) Framework Data Shin, Dong-Bin

2) NGIS Standard Kim, Mi-Jeong

3) National Geographic Information Clearinghouse Shin, Dong-Bin

4) NGIS Technology Development Chung, Moon-Sub

5) GIS Education Han, Shun-Hee

6) Institutions and Organizations Lee, Young-Joo

7) Research Projects for NGIS Seo, Ki-Hwan

3. Major NGIS Projects1) Korea Land Information Systems Choe, Byong-Nam & Kim, Kirl

2) Roads and Underground Facilities Management SystemsKim, Jung-Hoon & Han, Jay-II

3) Korea Planning Support Systems Kim, Kirl

Contents

117

Authors

Authors

Choe, Byong-Nam Research Fellow of KRIHS. Ph.D. in Management Information Systems, KoreaAdvanced Institute of Science and Technology. Major research fields are National GIS policy and analysis, anddesign of GIS applications. Recent research works include 「A Study on the Basic Framework of the NationalTerritorial Policy Decision Support Systems」(2007), 「Development of Korea Planning Support Systems」(2006~2007), 「Strategies for Creating Cyber National Territory toward the Ubiquitous World(II)」(2005),

「Integrated Spatiotemporal Simulation Model for National Territorial Policy(I, II)」(2005~2006), 「Strategies forImplementation GIS-based Local e-Government」(2004), 「Development of Land Information Systems」(1998~2004), 「Methods and Strategies for Construction Land Use Monitoring System」(2003), and 「A Study onthe 2nd(2000) and 3rd(2005) National GIS Master Plan」. (bnchoe@krihs.re.kr)

Chung, Moon-Sub Research Fellow of KRIHS. Completed Ph.D. course in Geomatics, Inha University.Major research fields are National Territorial Information System and GIS policy. Recent research worksinclude 「Strategies for Building Disaster Prevention Territory Using GIS」(2006), 「Strategies of DigitalNetworked Territory for Ubiquitous World」(2005), 「Vision and Policy Issues for National GeographicInformation System in Korea」(2004), 「Strategies for Integrated National Territorial Information System」(2003),「A Study on the Strategies for National Spatial Data Infrastructure」(2003), 「A Study on the Appraisal forNational Geographic Information System」(2002) and 「A Study on Strategies for Local GovernmentInformatization Using GIS」(2000). (mschung@krihs.re.kr)

Han, Jay-Il Assistant Research Fellow of KRIHS. Master of Science in Civil Engineering, MyongjiUniversity. Major research fields are National Geographic Framework Database, National GeographicInformation Standards, and Roads & Underground Facilities Database management. Recent research worksinclude 「R&D on Intelligent Urban Underground Facilities Management」(2007), 「Strategies for NGISStandards」(2006), 「Methods to Integrate and Manage National Framework Data」(2006), and 「A Study on thePromotion of Integrated Management Plan of Roads and Underground Facilities Database」(2003).(jihan@krihs.re.kr)

Han, Shun-Hee Associate Research Fellow of KRIHS. Bachelor in Computer Engineering, DonggukUniversity. Major research fields are National GIS policy and statistics. Recent research works include「Methods to Survey on the Status of Use of Territory in North Korea」(2006), 「Strategies for Creating CyberNational Territory toward the Ubiquitous World(II)」(2005), 「A Study on the 3rd NGIS Master Plan」(2004),

「Assembling Geographic Information in North Korea : Focusing on Non-Field Survey Methodology」(2004),「The Study on the Accuracy Measurement Methods of Geographic Information」(2002), 「Cyber TerritoryConstruction in Digital Age」(2001), and 「Land Use Interpretation Using High Resolution Satellite Imagery ofKaeseong, North Korea」(2001). (shhan@krihs.re.kr)

Kim, Jung-Hoon Research Fellow of KRIHS. Ph.D. in Town and Country Planning, University ofNewcastle-upon-Tyne, UK. Major research fields are National GIS policy and u-City. Recent research worksinclude 「The Study on the Planning System for the Realization of u-City」(2007), 「The National Strategies forthe Realization of u-City」(2006), 「A Study on the Application of Land Form Standards for the Rational Choiceof Available Lands For Developmen」(2005), and 「A Study on Implementation Strategies of Urban InformationSystem Based on Common-Use Program for facilities Management」(2004). (junghkim@krihs.re.kr)

Kim, Kirl Associate Research Fellow of KRIHS. Ph.D. in Geography, Florida State University. Majorresearch areas are urban geography, quantitative geography and GIS. Recent research papers include 「AStudy on the Basic Frameworks of the National Territorial Policy Decision Support Systems」(2007), 「KoreaPlanning Support Systems」(2006~2007), 「The Strategies of Developing the Korea Planning Support Systems」(2007), and 「The Causes and Factors Generating Gentrification in Seoul」(2007). (kirlk@krihs.re.kr)

128

Authors

Kim, Mi-Jeong Associate Research Fellow of KRIHS. Ph.D. in Geography, Konkuk University. Majorresearch fields are National GIS policy and analysis, and land information system. Major research worksinclude 「Methods and Strategies for Land Use Regulation Information System」(2005), 「3rd National GISMaster Plan」(2005), 「Development of Land Information Systems」(1998~2005), 「Strategies for ImplementationGIS_based Local e-Government」(2004), and 「Methods and Strategies for Construction Land Use MonitoringSystem」(2003). (mjkim@krihs.re.kr)

Lee, Young-Joo Associate Research Fellow of KRIHS. Ph.D. in Media and Governance, Keio University.Major research areas are National GIS policy and business GIS. Major research projects and studies include「Assessment and Establishment of Action Program for National GIS Projects」(2006), 「A Study on a WhitePaper of the 2nd National GIS Project」(2006), and 「A Study on the 3rd National GIS Master Plan」(2005).(leeyj@krihs.re.kr)

Sakong, Ho-Sang Director of the Geospatial Information Research Center of KRIHS. Ph.D. in UrbanPlanning, University of Seoul. Major research projects and studies concerning national policy of GIS/RemoteSensing include 「NGIS Strategies for Preparing Paradigm Shift of Geospatial Information」(2007), 「SupportStudy of NGIS Policy and Implementation」(2006), 「A Study on the 3rd NGIS Master Plan」(2004), 「Strategiesfor Integrated National Territorial Information System」(2003), and 「Urban Analysis through Integration ofRemotely Sensed Data and GIS」(2002). (hssa@krihs.re.kr)

Seo, Ki-Hwan Associate Research Fellow of KRIHS. Master in Geographic Information Systems,Kyungpook National University. Major research fields are spatial decision support and GIS. Recent researchworks include 「Strategies for NGIS in Preparation for Paradigm Shift in Geospatial Information」(2007),

「Methods to Survey on the Status of Use of Territory in North Korea」(2006), 「Assembling North Korea'sGeographic Information to Promote Cooperation between South and North Korea」(2005), 「A Study on the 3rdNational GIS Master Plan」(2004), and 「Strategies for Integrated National Territorial Information System」(2003). (khseo@krihs.re.kr)

Shin, Dong-Bin Research Fellow of KRIHS. P.E, Ph.D. in Civil Engineering, Yonsei University. Majorresearch fields are National GIS policy, Geographic Information Circulation and Quality Control of GISDatabase. Recent research works include 「Strategies for Enhancing National Geographic InformationClearinghouse」(2006), 「A Study on the Promotion of Integrated Management Plan of Roads and UndergroundFacilities Database」(2003), 「A Study on Implementation Strategies to Build Framework Database」(2002), 「AStudy on the Audit of Underground Facility Database」(2002), 「A Study on a White Paper of the 1st NationalGIS Construction Project」(2002), and 「A Study on the Unified Management for Roads and UndergroundFacilities Database」(2002). (dbshin@krihs.re.kr)

119

ACRONYMS AND ABBREVIATIONS

ACRONYMS AND ABBREVIATIONS

GIS Geographic Information Systems

KLIS Korea Land Information Systems

KOPSS Korea Planning Support Systems

KRIHS Korea Research Institute for Human Settlements

LBS Location Based Service

LMIS Land Management Information System

MCIE Ministry of Commerce, Industry and Energy

MIC Ministry of Information and Communication

MOCT Ministry of Construction and Transportation

MOGAHA Ministry of Government Administration and Home Affairs

NGIC National Geographic Information Clearinghouse

NGIS National Geographic Information Systems

NSDI National Spatial Data Infrastructure

PBLIS Parcel-based Land Information System

WAMP Widely Applicable Management Program

1210

1. Outline of Korea National GIS

1) Background and Purpose

In Korea, the concept of a Geographic Information System (GIS) was introduced in thelate 1980's. On an independent basis, some local governments, public institutions andprivate sector companies began to carry out GIS projects. With multiple GIS projectsbeing conducted by separate institutions, problems arose such as duplicated dataimplementation, lack of compatibility and quality deterioration. It soon became evi-dent that it was necessary to formulate national standards and present a diversity ofstandards so as to prevent waste and improve data interoperability. That is, a well-structured arrangement and planned promotion was required.

In addition, Korea was faced with a range of problems that includedenvironmental pollution, traffic jams, and a lack of basic infrastructure, as a result ofrapid industrialization and urbanization that had occurred in the past 20 years (fromthe beginning of the 1990s). The necessity of new analysis and a managementtechnique for solving it became conspicuous. Specifically, the occurrence of a city gassupply base explosion in Ahyeon-dong, Seoul in 1994, and a subway construction sitegas pipe explosion in Sangin-dong, Daegu in 1995 became decisive moments for theintroduction of the NGIS.

Accordingly, the Korean government established the ‘NGIS Master Plan’ andbegan to actively execute the NGIS Project in May 1998, in order to establish theNational Spatial Information Infrastructure (NSDI) systematically and consistently.

2) Process and Status of NGIS Project

The first NGIS Project (1995~2000) was intended to construct spatial information, withthe goals of strengthening national competitiveness and improving administrativeproductivity. In order to realize these goals, the government constructed spatial infor-mation DB and established NGIS standards and developed GIS software. In this peri-od, the government concentrated on the computerization of the national basemap,which was the basis of national spatial information. That is, it computerized the topo-graphic map published by the government at the scales of 1/5000, 1/25000, and

1111

1. Outline of Korea National GIS

Description 1st NGIS Master Plan 2nd NGIS Master Plan 3rd NGIS Master Plan

Vision

To construct national spa-tial data, to strengthennational competitivenessand to improve ministrativeproductivity

To realize a digital nationalterritory by expanding theNSDI

To create infrastructure forrealization of ubiquitouscountry

Objectives

Spatial DB constructionNational standard accep-tance and GIS S/W devel-opmentEstablishment of basicspatial DB standard

Development of digitalnational territory founda-tionInternet utilization andapplication of geographicinformationCore technology develop-ment and industry promo-tionContinuous developmentof infrastructure environ-ment, such as standardiza-tion and GIS education

Realization of GIS-based e-GovernmentImprovement of quality oflife through GISCreation of new business-es by using GIS

Strategies

Construction of basic spa-tial DB infrastructureSpatial data standardiza-tionGovernment GIS applica-tion system developmentImprovement of relatedregulations

Expansion of the NSDIImprovement of distribu-tion systemStrong support from gov-ernment Strengthening of mutualpartnershipMaximization of public-centered service

Expansion and substantial-ization of fundamental geo-graphic informationMaximization of GIS usePromotion of developmentof GIS core technologyEstablishment of NGIS stan-dard systemAdvancement of GIS policy

〈Table 1〉Vision of NGIS Master Plan

1212

1/50000, and also computerized the Cadastral Map, Land Use Map, and the road net-work. In addition, the government formulated the standards required for data con-struction, and developed the related technologies. In 2000, it laid the groundwork forthe NGIS, through formulating and executing the 「Act on the Implementation andUtilization of the National Geographic Information System (NGIS Law)」.

The second NGIS Project (2001~2005) was aimed at realizing a digital nationalterritory through the expansion of the NSDI. In order to actualize this, theinfrastructure environment was continuously constructed through a range ofinitiatives, and this included the arrangement of the foundation of the digital nationalterritory, the distribution of geographic information via the Internet, core GIStechnology development & industry support, standardization and manpowercultivation. In this period, the government concentrated on establishing theapplication system with the framework data. The framework data includedadministrative districts, traffic, marine & water resources, cadastre, geodetic controlpoints, topography, facilities, satellite images and aerial photos: geographicalinformation that became the most basic framework of the nation. In addition, thegovernment executed the application system construction project in each ministryusing the implemented geographic information. It also established an infrastructurethat enabled public institutions to share information each other and acquiregeographical information easily, which was the national geographic informationdistribution network.

The third NGIS Project (2006~2010) set the goal of building up the infrastructurefor the realization of Ubiquitous territory. To achieve this goal, the government hasexpanded, reinforced, and maximized GIS utilization, developed GIS's coretechnologies, established a NGIS standard system, and advanced GIS policy. Theconcept of ubiquitous territory refers to an environment in which everyone canacquire and utilize spatial information easily, anytime and anywhere. To achieve this,the government plans to complete the framework data construction, to build theintegrated GIS DB, and to develop the Intelligent National Territorial InformationTechnology before 2010.

For the first NGIS Project, a budget of approximate 280 billion won wasinvested, including national expenses and the local government's expense. For thesecond NGIS Project, a budget of approximate 550 billion won was spent(onlynational expense). Finally, a total budget of 1.5 trillion won is scheduled to be requiredfor the third NGIS Project.

1113

1. Outline of Korea National GIS

Description 1st NGIS Project 2nd NGIS Project 3rd NGIS Project

Topographical map andcadastral map computeri-zationConstruction of ‘special’maps, such as land utiliza-tion status map

Construction of frame-work data by sector, suchas road, river, building andcultural heritage

Inclusion of StatisticalDistricts in framework dataCompletion of frameworkdata construction by 2010

Underground facilitiesmap construction

GIS application systemdevelopment, such as landutilization, environment,agriculture and marineand GIS education

Linkage and integration ofindividual GIS applicationsystems

Formulation of DB con-struction-related standards,such as national basemapand ‘special’ mapsFormulation of geographi-cal information exchangeand distribution-relatedstandards

Formulation of 1 standardfor framework data, 13standards for geographicalinformation construction, 5standards for distribution,and 4 standards for theapplication system

Re-establishment of frame-work data standardModification and supple-mentation of existing stan-dardsStrengthening of standardapplication PR

Mapping technology, DBTool, GIS S/W technologydevelopment

Technology developmentsuch as 3-dimensional GIS,and high-precision satelliteimage processing

Intelligent National TerritorialInformation TechnologyDevelopment project

Manpower cultivationthrough informatizationlabor projectOff-line GIS education

Off-line and On-line GISeducationEducation materials andpractice program develop-ment

Operation of 15 GIS educa-tion universitiesProduction of On-line edu-cation contents

Pilot NGIC project promotion NGIC establishment: Atotal of 139 types andabout 700,000 cases regis-tered

The same

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ph

ic d

ata

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atio

n sy

stem

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tabl

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ent

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〈Table 2〉Accomplishments of NGIS Project

1214

3) Functions and Roles of Korea Research Institute for Human Settlements

Because the NGIS Project has involved the active participation of many ministries,including the Ministry of Maritime Affairs and Fisheries, the Ministry of GovernmentAdministration and Home Affairs (MOGAHA), the Ministry of the Environment, theMinistry of Information and Communication (MIC) and the Ministry of Commerce,Industry and Energy (MCIE), as well as the Ministry of Construction and Transportation(MOCT), the role of the NGIS Management Agency is very important. As the NGISManagement Agency of the NGIS Promotion Committee, the Korea Research Institutefor Human Settlements (KRIHS) has taken the initiative in executing the NGIS Projectby developing related policies and by monitoring the project. The KRIHS establishedthe 1st, 2nd and 3rd NGIS Master Plan, and has constantly developed NGIS policies andstrategies through its research. In particular, the KRIHS has directly executed the frame-work data, standards, distribution, and GIS education project, which are the core factorsof the NSDI, and has developed the related policies. That is, it has played the role of apolicy brain.

The KRIHS planned the NGIS Project conducted by the government, and took theinitiative in developing the technology and system while executing the policy functions.Its representative project is the Korea Land Information Systems (KLIS). For this project,the KRIHS conducted basic research, experimental research and a pilot project. Theproject was then implemented by the MOCT. In addition, the KRIHS has established theGIS analysis technique and analysis model through basic research, and has recentlyconcentrated on the Decision Support System using GIS.

4) Future Plan

As shown in <Figure 1>, the Korean government has resolved 'infrastructure develop-ment for the realization of ubiquitous national territory’ as the policy principle behindthe currently-implemented third NGIS Project. The goal of the project encompasses thepublic sector, the civil sector and industrial sector. The public sector goals target the cen-tral government and the local governments, and include realization of GIS-based e-gov-ernment. The civil sector goals include the promotion of civil safety and conveniencethrough the utilization of GIS. Also, the industrial sector will research new industrialdevelopments, such as the service utilizing GIS and g-Contents development. Strategiesfor the third NGIS Project are as follows;

Firstly, strengthen the NSDI, such as the framework data, standard, distribution

1115

1. Outline of Korea National GIS

technology development, and GIS education. It is necessary to modify, supplement andupdate the NSDI continuously, not simply execute for a certain period. Accordingly, thethird NGIS Project will concentrate on reinforcing and enhancing the NSDI.

Secondly, maximize the application value of the NGIS. It intends to executenational territory informatization, to enable active responses to changes in theinformation environment. It will also establish the Integrated Land Information System,which links or integrates individually operated information systems, to easily applyspatial information anytime and anywhere. In order to develop the technology toconnect the GIS with the ubiquitous information environment, the korean governmentis expected to execute the Intelligent National Territorial Information TechnologyDevelopment Project, for 5 years starting from this year.

Thirdly, construct a user-oriented NGIS. In the beginning of the NGIS Project, thefocus was on building the NSDI. However, in this stabilization phase, the NGIS Projectaims to construct custom-made geographic information, or an application systemdesired by users.

Lastly, because the NGIS is one part of national information infrastructure, theNGIS Project will not independently execute the project, but collaborate with othernational informatization-related projects. For example, it is effective to maintain acooperative relationship with e-government projects and IT-based projects.

The NSDI is the important national infrastructure required for continuousterritory development, support for the nation’s economic activity, development of a safeand convenient living environment, and efficient & productive administration. Untilnow, the focus has been on the GIS establishment of the public sector, by the central andthe local governments. However, a course of development must be pursued that allowsfor the activation of GIS-based private industry, and the expansion of GIS contents in thepublic service.

1216

〈Figure 1〉3rd NGIS Master Plan Schema

MainProjects

Strategies

Realization ofGIS-based

e-Government

Improvement ofquality of lifethrough GIS

Creation ofnew businesses

by using GISObjectives

Creation of Infrastructurefor Realization of Ubiquitous Country

Vision

Expansion andsubstantiation

of NGIS infrastructure

Construction ofuser-oriented national

spatial information

Expansion and substantiation offundamental geographic information

Maximization of GIS use

Promotion of development ofGIS core technologies

Establishment of NGIS standard system

Advancement of GIS policy

Maximization ofNGIS use value

Cooperation with nationalinformatization project

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2. Present Status of National Spatial Data Infrastructure

2. Present Status of National Spatial DataInfrastructure

1) Framework Data

(1) Outline of Framework Data

As the information society has developed, the demand for applied geographic data inthe private sector and public sector has substantially increased. This demand for geo-graphic data has continuously increased on all fronts; from individuals, public institu-tions, and industry. To effectively respond to this increasing demand, while ensuringreliability and preventing waste from overlapping construction, geographic data mustbe constructed and supplied at the national level. Most countries around the worldhave constructed the most basic geographic information and supplied it to the public.This can be referred to as framework data. Recognizing the importance and necessityof framework data, Korea has been also promoting framework data construction as apriority task of the NGIS Project.

In Korea, a definition for framework data and the items of framework data isprescribed in the NGIS Law. According to the NGIS Law, there must be geographicinformation that becomes a basic framework in construction and application of theNGIS as requisites of framework data. Secondly, there must be basic geographicinformation, which is extensive and is required by a range of users. Thirdly, theremust be many types of geographic information that add or overlap, diagrammaticallyor spatially.

Also, the object of the framework data is specified in the 「Enforcement Decree ofthe Implementation and Utilization of the National Geographic Information SystemACT」. Framework data, as specified by the president, means administrative districts,transportation, marine & water resources (including the sewer system), land register,geodetic control points, topography, facilities (including national cultural heritage andthe designated cultural heritage of Si & Do), satellite images & aerial photos, andother geographic information designated by the head of the related centraladministrative organ by the committee’s review. As the Statistical District is includedin the above framework data, it has been adjusted into 10 fields.

As prescribed in the NGIS Law, because the framework data is the informationthat provides the most basic framework, and is the NSDI that is commonly used inextensive and varied fields, the framework data must be built according to strictstandards and guidelines.

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(2) Framework Data Construction to Date

In the period of the first NGIS Project (1995~2000), the framework data constructionproject was not conducted in a strict sense. This was because there was a fundamentalcondition required prior to constructing the framework data. At that time, there wereno existing standards with regard to construction of geographic information in digitalform. Accordingly, in this period, research was performed to determine a plan for con-structing framework data that was suitable for our needs. Also, we carried out taskssuch as construction of framework data of an experimental level for a project areaprior to fully promoting the project.

〈Figure 2> Framework Data Items

OverlappingUtilization

Administrative district

Transportation

Facilities

Water resources

Ocean

Cadastre

Geodetic control point

Topography

Spatial imagery

Statistical district

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2. Present Status of National Spatial Data Infrastructure

For the second NGIS Project period (2001~2005), the framework data wasactively constructed. In 2004, the framework data model standards of administrativedistrict, transportation, facilities and water resources fields were formulated. In 2005,the framework data construction for the transportation, facility and water resourcesfields were completed. In addition, the framework data-related DB constructionproject has been constantly executed for the ocean, spatial imagery, geodetic controlpoint and cadastre.

(3) Method of Framework Data Construction

Because the framework data are composed of 10 different items, it is difficult for oneorganization to implement completely. For this reason, it is desirable that a legally oroccupationally related public institution should implement and continue to maintainthe framework data. Therefore, as shown in <Figure 3>, the boundary of the adminis-trative district is the responsibility of the MOGAHA, while transportation is the

〈Figure 3> Institutions in Charge of Framework Data Construction

Administrative district

Transportation

Facilities

Cadastre

Water resources

Ocean

Topography

Geodetic control point

Spatial imagery

Statistics

Ministry of Government Administration and Home AffairsMinistry of Construction and Transportation

National Geographic Information Institute

National Geographic Information InstituteCultural Heritage Administration

Ministry of Government Administration and Home AffairsMinistry of Construction and Transportation

National Geographic Information InstituteKorea Water Resource Corporation

Ministry of Maritime Affairs and FisheriesNational Oceanographic Research Institute

National Geographic Information Institute

Korea National Statistical Office

Primary Institution

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responsibility of the National Geographic Information Institute. Also, the shoreline isthe responsibility of the Ministry of Maritime Affairs and Fisheries, and the topogra-phy, geodetic control points and spatial imagery is the responsibility of the NationalGeographic Information Institute. Finally, the statistical district is the responsibility ofthe Korea National Statistical Office. In other words, a responsible organization hasbeen designated for each item.

Institutions that implement the framework data will implement and update thedata by determining the object of implementation, the level of quality, the productionmethod and the production plan for each field through discussions with the MOCT.

(4) Status of Framework Data Construction

The most desirable situation would be to newly develop framework data according tocurrent requirements in terms of quality. However, as this would involve a lot of timeand expense, the framework data have been implemented through application of adigital topographic map. That is, the procedure to connect a structured editing andattribute information after extracting the geographic information layer from the Digi-tal Topographic Map has been additionally executed.

As the status of the framework data implementation shown in <Table 3>, thetransportation, facilities, cadastre and water resource sectors were completelyimplemented, and have been continuously updated as of the end of 2006. Theadministrative district, ocean, topography, and geodetic control point sectors arecurrently under construction. The spatial imagery and statistical district sectors arescheduled to be implemented beginning in 2008.

Because the framework data have been constructed applying digital topographicmap layers, its quality in terms of accuracy and precision is low. To improving this, anenhancement process must be constantly executed. Also, in order avoid overlap of theframework data’s application, a ’framework data integration and managementinstitution’, which synthetically manages all items of framework data, will bedesignated and managed. In addition, all items of framework data are scheduled to becompletely constructed by 2010.

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2. Present Status of National Spatial Data Infrastructure

(5) Future Plan

The goal of the framework data implementation project of the third NGIS Project(2006~2010) is to complete implementation of framework data and to improve itsquality. In order to complete implementation of framework data by 2010, cooperationamong institutions that implement the framework data is crucial. Accordingly, thecooperation system of the institutions implementing the framework data is to bestrengthened, mainly by the MOCT. Next, the requisites of framework data must bedefinitely determined, in order to improve the quality of framework data. Becauseframework data are currently extracted from the digital topographic map, there is aninsufficient requisite as topographic information. Accordingly, the requirements ofquality will be determined, such as time accuracy, position accuracy, attribute accura-cy, completeness and consistency. As the framework data is widely utilized by all,everyone should be able to easily utilize it. To this end, the framework data must beaccessible via the Internet, from anywhere and at any time. If possible, it must be pro-vided free of charge. Therefore, the framework data are scheduled to be providedeffectively through the National Geographic Information Clearinghouse (NGIC).

Completed In progress Planned

Administrative district Administrative and legal boundary ○

TransportationRoad boundary and road center line ○

Railway boundary and railway center line ○

FacilitiesBuilding ○

Cultural heritage ○

Cadastre Cadastre ○

Water resourcesRiver center, river boundary, lake & reservoir,river valley boundary ○

OceanShoreline, ocean boundary, submarinetopography, ocean control point ○

Topography Digital elevation model ○

Control point Geodetic control point ○

Spatial imagery Orthoimage, orthophoto ○

Statistics Statistical district ○

〈Table 3〉Present Status of Framework Data Construction

Field Item

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2) NGIS Standard

(1) Overview

When the NGIS Project is executed according to the prescribed standards, budgetwaste can be prevented, and synergy can be created through improved efficiency andinter-connectedness between projects. Accordingly, GIS standardization has been pur-sued from the earliest stages of the NGIS Master Plan.

Standardization means determining a common system and following it, so as toenable a range of different users to share data or a system. The system requires data, amethod of making the data, and a method of exchanging the data. Also, to enablemultiple users to follow it, there needs to be reasonable discussion and the approval ofan authorized organization. For such a system, the standard system is composed of anobject of standardization, a method of standardization, procedures of standardization,and organization of standardization. That is, it is necessary to establish what will bestandardized, which method will be used for the standard, which procedures will beexecuted for the standard, and who will make the standard. Accordingly, the GISstandard system to be established for the NGIS was composed of the object of GISstandardization, the method of GIS standardization, the procedures of GISstandardization, and the organization of GIS standardization.

〈Figure 4〉NGIS Standard System

GIS Standardization Targets- Spatial data implementation- Maintenance & updating- Distribution & service

GIS Standard Method- Data standard- Procedure standard- Technology standard

Procedures of GISStandardization

- Development (updating) procedure- Maintenance procedure- Standard application

Organization of GISStandardization

- Organization formulation- Role and detailed duties

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2. Present Status of National Spatial Data Infrastructure

(2) Performance of GIS Standardization

① The 1st and 2nd stages of NGIS standardization

In the 10-year period from 1995 to 2005, 73 GIS-related standards were developed.These included the standard for implementation of spatial data for effective executionof the NGIS Project, the spatial information exchange and distribution-related stan-dard, and the standard for the interface or architecture for improving the efficiency ofGIS application system.

With regard to the standard for implementing spatial information, there weremostly the standards for the production of digital drawings, such as the nationalbasemap, thematic map and underground facilities map. To this end, about 49 relatedstandards were developed. With regard to the standard for continuously maintainingand updating implemented spatial information, one standard was developed. Withregard to the standard for providing spatial information and system, a total of 23standards for data exchange, web service, mobile service and others were developed.Its development was focused on the individual unit project.

Object Method GIS Standards

BuildingSpatialInformation

Data standardDesign guideline for geographic framework data model, Geographicdata model standard, Standard for underground facility map for NGIS,Digital map integrated standard for NGIS, etc.

Process standardGeographic information-Quality evaluation procedures, Geographicinformation-Procedures for item registration, etc.

Technology standard -

Maintenance & Updating

Data standard Metadata standard for geographic information management

Process standard -

Technology standard -

Service

Data standardGeographic information-portrayal, Exchange standard of nationalframework database based on GML, etc.

Process standard -

Technology standard Web feature service, Function for mobile GIS services, etc.

〈Table 4〉Standards Developed for Period of the 1st and 2nd NGIS MasterPlan (example)

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② The 3rd stage of NGIS standardization

From 2006, the NGIS standard is intended to actually modify the standard of frame-work data implementation for the NSDI. In addition, a GIS standard to support imple-mentation of spatial information infrastructure by objects of GIS standardization willbe selected as shown in <Table 5>, and then related standards by year will be devel-oped. In addition, continuous maintenance will be executed for developed GIS stan-dards. By actively promoting the developed and maintained GIS standards, it will beable to be applied in diverse fields.

Object Method GIS Standards

Building

Spatial

Info

Data standardSpecification for imagery and gridded data, Data model for movingfeatures, Extended UFIS for u-Service, etc.

Process standard 3-dimensional geographic information specification using GIS DB

Technology standard Sensor data model for u-Service

Main-

tenance

&

Updating

Data standardProfile for geographic information metadata, Metadata for imagerygeographic information, etc.

Process standardGuideline for GIS standard application in public sector, Guideline for GISimplementation in public sector, Geographic information updating process,Quality control for geographic information web service

Technology standard Guideline for integrating geographic information service based on web service

Service

Data standard3-dimensional geographic information portrayal based on web service,XML encoding based on imagery data, Simple portrayal model for movingfeature, Semantic web framework for geographic information web service

Process standard Geographic information service workflow, SQL for moving feature query

Technology standard

Sensor service interface for u-Service, Common service for GIS integrationin public sector, Geographic information RSS service interface, Commoninterface for geographic information web service, Geographic informationcataloguing service interface

〈Table 5〉Standards to be Developed During Period of the 3rd NGIS MasterPlan (example)

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2. Present Status of National Spatial Data Infrastructure

(3) Organization of GIS Standard

The NGIS Promotion Committee is composed of a total of 5 subcommittees. Amongthem, the standardization subcommittee is in charge of standardization. In order toactively perform standardization, a working group and a technical advisory commit-tee operate under the standardization subcommittee.

The standardization subcommittee executes decision-making duties such asdrawing mutual agreements among standard-related institutions. The standardizationsubcommittee must report to the MCIE, the MIC, and the MOCT. The working groupexecutes ordinary duties such as the public subscription and acceptance of standardsin relation to GIS Standard. The Korean Agency for Technology and Standards, theKorea Research Institute for Human Settlements, the National Information SocietyAgency, and the Korea Ocean Research & Development Institute have jointly executedthe GIS Standard. The technical advice team is in charge of technical review &modification of developed standards, the pilot application of the proposed standardand the evaluation of application results. This team is organized by private expertswho are experienced in performing actual standardization, or of implementing thesystem and data by utilizing the standard.

〈Figure 5〉Formation of Standardization Subcommittee

Korea OceanResearch &

DevelopmentInstitute

Korean Agencyfor Technologyand Standards

NationalInformation

Society Agency

KRIHS

Standardization Subcommittee

(MCIE, MIC & MOCT)

Working GroupTechnical

Advice Team

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The standardization subcommittee needs to have close cooperation with othersubcommittees such as the framework data subcommittee, the utilization &distribution subcommittee, and the technology development subcommittee. That is,when the framework data subcommittee, the utilization & distribution subcommittee,and the technology development subcommittee related to the GIS standard establish astandard execution plan for developing the GIS standard, they submit it to thestandardization subcommittee, and the standardization subcommittee reviews thesubmitted plan and standard for overlap. Therefore, there is a mutual partnership ofthe subcommittees. In addition, when each subcommittee develops the GIS standard,the standardization subcommittee executes active supports for it.

(4) Process of GIS Standardization

The NGIS standard is formulated through a five-phase process. The first phase is theexploration and public subscription of the GIS standard to be developed. This phaseexplores the standard required for implementation of the national spatial informationinfrastructure, and to publicly subscribe it to the standard experts. Through it, it isexpected that the development of the standard will be participated in more practicaland diversified fields. The second phase is the development of the standard selectedin the phase of public subscription. The third phase is the procedure for improving theapplication by evaluating and reviewing the developed standard. The fourth phase isthe determination of the standard’s level; for example, a determination of whether thedeveloped standard is suitable as a national standard, or as a group standard. Follow-ing this, the determined national standard will be presented as a national standard,and will improve the position of Korea’s standard.

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2. Present Status of National Spatial Data Infrastructure

〈Figure 6〉Procedures of GIS Standard Development

International standard

Registration asthe national standard

No Yes

Review of the nationalstandard proposalappropriateness

Standard (proposal) review

Standard (proposal) development

Exploration andpublic subscription

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3) National Geographic Information Clearinghouse

(1) Background

As the NGIS Project has been actively executed from 1995, multiple public institu-tions, including the central government, local governments and government-investedinstitutions, have implemented the spatial data required for the project. However, asthere is no amicable information exchange among the institutions that implement thespatial data, data are repeatedly implemented, or implemented data is not commonlyutilized. That is, problems of inefficiency occur. In order to solve such problem and tosearch & utilize the spatial data without any restriction of time and space, anywhereand at any time, the NGIC project was launched. It has been conducted since 2000 bythe MOCT, according to the second NGIS Master Plan. As the result, the NGIC, whichcan distribute the spatial data produced by nationwide public institutions online, hasbeen established.

(2) NGIC Construction

① Components

The NGIC is composed of the NGIC center, the regional gateway, supplier anddemander, as shown in <Figure 7>. Each component is explained in the following. TheNGIC center is the core institution to synthetically manage the spatial data imple-mented by the NGIS Project and various GIS projects. The regional gateway is theinstitution that sells or distributes the spatial data and metadata produced by theregion. The supplier is the institution which entrusts and sells the implemented andowned spatial data to the NGIC center or the regional gateway. Finally, the demanderis the individual, enterprise, research center or institution that purchases the spatialdata and uses it according to its own purpose. The demander researches the spatialdata by accessing the NGIC center, and the center informs the demander of the meta-data research result of the regional gateway. The demander can confirm the spatialdata through the preview function, and then can download the data.

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2. Present Status of National Spatial Data Infrastructure

The NGIC is currently operated by the NGIS Division of the MOCT. Regionalgateways are operated by 9 institutions, as shown in <Figure 8>.

〈Figure 7> Components of the NGIC

Center of National

Geographic Information

Clearinghouse

Geographic Information

User

Distribution Gateway AccessInternet

Korea Financial Telecommunications & Clearings Institute

Geographic Information

RegionalGateway

Geographic Information

Supplier

GeographicInformation

Search

Electronic Payment

Payment

Geographic Information Download

Distribution Status Information

Sale Price Payment

Geographic Information Sale on Commission

〈Figure 8〉Regional Gateways by Region

Seoul Regional Gateway

Honam Regional Gateway (Gwangju)

Jeju Regional Gateway

Gangwon Regional Gateway (Chuncheon)

Gyeongbuk Regional Gateway (Daegu)

Gyeongnam Regional Gateway (Busan)

Gyeonggi Regional Gateway

Distribution Center (MOCT)

National Geographic Information Institute Regional Gateway

Chungcheong Regional Gateway (Daejeon)

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② Configuration Diagram of the NGIC

The NGIC provides the spatial data owned by the central ministries, local govern-ments and public institutions to the demander. The system configuration of the NGICis described in <Figure 9>, and it provides the function of distributing the file-baseddata and the feature-based spatial data. It is connected to the PG (Payment Gateway)service of Korea Financial Telecommunications & Clearing Institute, to enable elec-tronic payment for the sale of data. The NGIC center plays the role of an NGIC gate-way, and manages the regional gateway and the distribution record information. Eachregional gateway operates its own independent system, which distributes the spatialdata of the corresponding region.

〈Figure 9> Configuration Diagram of the NGIC

Customer

Decoding & Download module

Metadata registration management

Regional Gateway homepage

Regional Gateway homepage

Payment Gateway module

Coding module

MapBrowser

PaymentGateway

Payment Gateway module

Center of NGIC (MOCT)

Supplier management tool

File-based distribution

File+spatial DB-based distribution

Customer access Supplier access Payment route Internal route

Web Browser

Metadatainformation (File-based)

RDBMS

Metadatainformation (File-based)

RDBMS

Geographic information (Layer-based spatial data)

SpatialDBMS

Regional Gateway management toolCoding/Compression module

Payment module

Data re-announcementMetadata registration management

Regional Gateway homepage

Distribution Gatewaywww.ngic.go.kr

Management tool

Regional Gateway listMember informationDistribution history

KFTC

* KFTC: Korea Financial Telecommunications and Clearings Institute

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2. Present Status of National Spatial Data Infrastructure

③ Method for Geographic Information Utilization

The NGIC provides about 150 kinds of diversified spatial data, including digital topo-graphic map, a detailed soil map, a green naturality map, and a land cover map, asshown in <Figure 10>. As of October 2007, about 760,000 spatial data elements havebeen provided through the NGIC.

In order to use the spatial data and the related service through the NGIC, theuser must access www.ngic.go.kr. As costs have been collected in the past through thesale of spatial data, there is more charged data available than free data. Users cansearch for spatial data using index map search, string search, or map number searchmethods. After the user finds the required data, the user can make an online paymentand then download the data. Data that has been designated as “Free” can bedownloaded from the main page, without search procedures or payment. The usercan preview the data in advance, and can also inquire regarding the history of datathrough the provided metadata.

〈Figure 10> Example of Spatial Data Provided by the NGIC

Digital Topographic Map Detailed Soil Map Green Naturality Map

Land Cover Map Road Network Map Framework Data

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(3) Implementation Plan

Following implementation of a quantitatively and qualitatively-advanced NGIC, weintend to make improvements to it that enable the user to utilize the spatial data moreeasily and rapidly. The advanced NGIC provides not only simple data but also a rangeof services that can utilize the spatial data together. Examples of provided servicesinclude a satellite image service, a format conversion service and a user communityservice.

In order to provide various spatial data and application services by developingthe existing performance, we intend to expand our partnerships with the privatesector and to increase the variety of content and the convenience to the user. We planto create added value and to activate related industries through spreading, utilizingand promoting such spatial data. In addition, we plan to provide a service brokerfunction, as shown in <Figure 11>, to enable the government, public and privateservice providers to register each spatial data utilization service with the NGIC. Theservice broker plays the role of collecting and providing the registered service.Through the service broker, the spatial data-related services can be utilized in theNGIC.

〈Figure 11〉Service Framework Concept Map Customized for Korea

Mobile GIS APP

Other Business APP

Desktop GlS APP

Web Browser

Broker + Provider(NGIC Center)

Requestor(User. Other system, etc.)

Provider(Regional gateway,

Distribution node, etc.)

Application Services

Catalog Services

Bind

Find &Bind

Publish

Processing Services

Related institutions/Private connection system

Portrayal Services

Data Services

Geographic data

Metadata information

Geographic data

Metadata information

Broker function of SOA model

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2. Present Status of National Spatial Data Infrastructure

4) NGIS Technology Development

(1) Overview

A part of the NSDI, the NGIS technology development project formed the basis ofimplementation through the first and second NGIS Project. As of 2007, the third tech-nology development project required for the enhancement of GIS application systemfor the ubiquitous era has been conducted. During the first planning period (1995~2000), the GIS technology infrastructure was developed, as the Ministry of Scienceand Technology executed the GIS technology development in 4 sectors. During the2nd planning period (2001~2005), the MIC conducted the GIS technology develop-ment project. During the third planning period (2006~2010), the MOCT is scheduledto conduct the Intelligent National Territorial Information Technology Development infive sectors, to build the geospatial information society.

(2) Accomplishments to Date

① The 1st NGIS Technology Development

For the 1st NGIS technology development, the Ministry of Science and Technologyconducted the GIS technology development project in four sectors, with the goal ofdeveloping GIS technology through foreign technical cooperation and independenttechnology development.

In the DBMS Independent basic S/W technology, the projects of GIS APItechnology development, GIS analysis operational S/W technology, DB Tooltechnology, and GIS system integration technology were conducted. Mappingtechnology, data acquisition and modification software, data processing & three-dimensional topographic analysis software, as well as map print and map designautomation software were developed, utilizing GIS input & output and spatialanalysis technology software. For DB TOOL technology development, the spatialobject management & storage system and the RDBMS & OODBMS interface weredeveloped through the development of the DBMS interface for GIS data application.In GIS system integration technology, the system integration technology, GISadvanced technology monitoring & technology diffusion, GIS application S/W for thepublic facilities management system, GIS data edition and integrated managementtechnology and three-dimensional spatial analysis S/W in the Internet environmentwere developed.

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② The 2nd NGIS Technology Development

For the 2nd NGIS technology development project, the Open GIS and imagingprocess-related technology development was promoted for GIS S/W development,with the support of the MIC. In the Open GIS component technology development,the data supply, common core, spatial information distribution and GIS applicationcomponent were developed with the goal of developing open middleware S/W tosupport two-way compatibility and data sharing of spatial information in the distribu-tion environment. In the three-dimensional GIS S/W development, the software forimplementing and processing large-capacity three dimensional geographic informa-tion, such as three dimensional geographic information & facility configuration extrac-tion, four-dimensional space-time data processing, efficient automation modeling,three-dimensional information, and the core components to efficiently store, search,manage, analyze and visualize visual information.

In terms of high-resolution satellite imagery processing technologydevelopment, the design & realization of satellite image data input/output & sharedstandard data structure and the common view, the development of core componentsorganized into 9 categories and container realization, the basic research on test bedimplementation for the verification of developed technology and the high-precisionsatellite image-related policy research were executed. In the spatial image informationintegration technology development, the application method research in the fields ofthe core technology for the integration of multi-sensor spatial image information, thepublic sector utilization business of multi-sensor spatial image information processingtechnology, multi-sensor spatial image information standardization and the relatedspatial information were executed.

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2. Present Status of National Spatial Data Infrastructure

③ Application of NGIS Technology Development

Various GIS technology development projects were conducted under the auspices ofthe 1st and 2nd NGIS technology development projects. With the introduction of

Project Title PeriodInstitutionin Charge

The First

DBMS Independent GIS Basic S/W- GIS API Development- GIS Analysis S/W Development- GIS Operation S/W Development- GIS User Interface Technology Development

1995~1999

Ministry ofScience andTechnology

Mapping Technology Development- Data acquisition and modification S/W development- Data processing and three-dimensional topographic S/W development- Map printing and map design automation S/W development

DB Tool- Spatial object management system development- Spatial object storage system development- RDBMS Interface development- OODBMS Interface development

GIS System Integration- System integration development- GIS advanced technology monitoring and spread- Public facility management GIS application software development- GIS data editing and integrated management technology development- Internet environment three-dimensional spatial analysis S/W development

The Second

Open GIS component technology development 1999~2001

Ministry ofInformation andTelecommunication

3-dimensional GIS S/W technology development 2000~2002

High-precision satellite image processing technology development 2001~2003

Spatial information(4S)-connected technology support business2001~2003

Multi-sensor spatial image information integration technologydevelopment

2004~2006

〈Table 6〉Results of the 1st and 2nd NGIS Technology Development

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advanced GIS technology development and the utilization of independent manpower,active GIS projects were executed, but there has been an insufficient application of thedeveloped technology. To solve this problem, we plan to develop the component tech-nology and core technology required for GIS application system and then to con-tribute to domestic and foreign GIS projects, with the goal of supporting the spatialinformation society of the ubiquitous era, in the third NGIS technology developmentproduct.

(3) Implementation Plan

In the third NGIS Project, which began in 2006, the five sectors’ Intelligent NationalTerritorial Information Technology Development project is scheduled to be conductedmainly by the MOCT (Korea Institute of Construction & Transportation TechnologyEvaluation and Planning) in order to respond to the change in the national informati-zation paradigm and to execute customized technology development for the geo-graphic information demander.

① Overview

The Intelligent National Territorial Information Technology Development projectintends to contribute to the improvement of quality of life in the public and privatesectors by advancing the spatial information technology under the vision of ’Infras-tructure building for ubiquitous territory actualization’. To this end, real-time territorymanagement, convenient city operation and safe construction will be supportedthrough the development of the primary territorial information technology for territo-rial spaces, cities, and SOC. In this project, the technology development projects of fivesectors including the spatial information infrastructure, territory monitoring, city facil-ity intelligence, construction informatization and u-GIS combination are scheduled by2010, mainly by the intellectual territory information division of the Korea Institute ofConstruction & Transportation Technology Evaluation and Planning.

② Contents of Implementation

In the spatial information-based infrastructure project, base infrastructure improve-ment, spatial information acquisition equipment development, and construction ofobject-based territory spatial information are planned for spatial information infra-structure innovation. In the territory monitoring project, air & ground monitoringtechnology, integrated monitoring management system, and monitoring data applica-tion system development for real-time territory monitoring are scheduled. In the

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2. Present Status of National Spatial Data Infrastructure

urban facility intelligence project, the Intelligent underground facility managementtechnology, the advanced IT-based ground facility management technology, and theurban space information integration platform technology development projects arescheduled, with the goal of establishing an intelligent urban space information infra-structure.

In the u-GIS-based construction informatization project, the developmentprojects of u-GIS spatial information processing technology, the next-generationvisualization technology, the indoor spatial information management technology, andcustomized territory information technology are planned, with the goal of realizingsafe and convenient construction spaces. In the u-GIS core combination technologyproject, the development projects of u-GIS spatial information processing technology,next-generation visualization technology, indoor spatial information managementtechnology, and customized territory information technology for the inducement ofadoption of the u-GIS standard and technology are planned. When the IntelligentNational Territorial Information Technology Innovation Project is successfullycompleted in 2010, it will promote innovative territory management, and contribute tothe improvement of the quality of people’s lives by obtaining the core technology ofthe next-generation territory information system.

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〈Figure 12〉3rd GIS Technology Development Plan

Core Task Major TechnologiesDirections

Spatial information-based

infrastructure

Spatial information

infrastructure innovation

- Based infrastructure- Spatial information acquisition equipment development- Implementation of object-based territory spatial information

Territory monitoring

Real-time territory

monitoring

- Air & ground monitoring technology- Integrated monitoring management system- Monitoring data application system

Urban facility intelligence

- Intelligent underground facility management technology- IT-based ground facility management technology- Urban space information integration platform

Establishment of intelligent urban space information

infrastructure

u-GIS-based construction

informatization

- Spatial information construction technology for construction drawing- Location-based construction resources management technology- u-GIS-based ground information management

Realization of safe and

convenient construction

space

u-GIS core combination technology

- u-GIS spatial information processing technology- Next-generation visualization technology- Indoor spatial information management technology- Customized territory information technology

Induction of u-GIS

standard and technology

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2. Present Status of National Spatial Data Infrastructure

5) GIS Education

(1) Background and Purposes of GIS Education

The government has recognized the importance of GIS for many years now, havingconducted the first NGIS Project beginning in 1995. However, at that time, many peo-ple did not fully understand the concepts and the potential applications of GIS. Inlight of this, to ensure the successful execution of the NGIS Project, it was necessary toquickly and effectively educate the central government and local government officialswho were to be involved in the project. Several important GIS-based application sys-tems have been introduced, implemented and operated by the central government,local governments and public institutions, and these include the KLIS, the urbaninformation system, and the underground facilities system. However, as the officialsin charge lacked the sufficient ability to use the system, and as many of these officialswere frequently replaced, there were difficulties in operating these GIS applicationsystems. When a GIS application system is not satisfactorily utilized and operated, theeffectiveness of the NGIS Project is likely to be reduced. For this reason, GIS educationhas been provided to public officials, industry personnel, teachers and general citi-zens.

Target ofEducation

Education Goals

Public Officials

Improve ability to utilize the NGIS application systemImprove working ability by providing theoretical education and practical educa-tion on GIS Promote understanding of the NGIS

Industrial

Workforce

Providing the chance to receive re-education on GIS and to learn new technologyrapidly

Secondary SchoolTeachers

Improve learning ability through improving understanding of geographic infor-mation shown in textbooks

Student &

General Citizens

Improve understanding and ability to utilize GIS

〈Table 7〉GIS Education Goal by Target

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The purpose of GIS education is to systematically cultivate the human resourcesrequired for construction, maintenance and application of various types of the NGIS.In addition, GIS education is intended to ensure the satisfactory performance of theNGIS Project, and to stimulate its development and application infrastructure byincreasing national interest in GIS, by promoting its concept and applications. <Table7> describes the GIS education goals by the object of education. As can be seen in thetable, the intent of GIS education is to promote the ability of public officials to utilizethe NGIS application system, and to provide the overall workforce with a chance toreceive re-education and learn about this new technology. An additional aim is toimprove education secondary schools, and improve the ability of students and generalcitizens to use GIS applications.

(2) Process and Status

① On-Site Education

Through establishment of a decentralized network-type GIS education system, On-Site education has been provided via the GIS Education University, which was desig-nated by the MOCT from 2003. The GIS Education University is divided into 6 region-al schools, with schools in the Seoul metropolitan region, the central region, the Gang-won region, the Honam region, the Yeongnam region and the Jeju region. This divi-sion enables an effective response to the national demand for GIS education, as eachlocal education center is designated as the institution in charge of GIS education forthe region. The GIS Education University designated by MOCT which is selectedamong the universities and GIS-related professional institutions provides the GIS edu-cation of the corresponding region by receiving the support of government’s budget.

As the GIS Education University provides education that combines theory andpractice, practical help is required. The high level of face-to-face contact ensures thateducational effectiveness is high, especially for beginners. Accordingly, GIS educationhas been conducted mainly for public officials holding GIS-related jobs, and forsecondary school teachers who teach GIS-related subjects. Curriculum includes basicGIS, GIS applications, as well as courses tailored to the specific needs of publicofficials and secondary school teachers. Actual education is provided by GISEducation University, but the Center for GIS education ’Korea Research Institute forHuman Settlements’ is in charge of the systematic execution and management ofeducation, including the educational institution, trainee management andperformance measurement.

1141

2. Present Status of National Spatial Data Infrastructure

② On-Line Education

The government has established an Online education system (www.e-gis.or.kr) tocomplement the On-Site education, and has operated GIS online education continu-ously from 2003. While On-Site education does seem to be more effective thanks to theextensive face-to-face contact between teacher and learner, it has limitations in termsof time and place, and requires more educational costs per person. On the other hand,Online education can operate without the limitation of time and space, and can theself-motivated learning system can actually improve the professionalism of the learn-er. In addition, while the initial development cost of the Online education system issomewhat high, it can provide the benefits of education to a wider range of learners.Considering all of these factors, the cost effectiveness of online education is excellent,and for this reason, online education programs are becoming activated in a widerange of fields.

The GIS online education system has stably provided effective education on a24-hour a day basis, by allocating exclusive manpower (professors) and rapidly

〈Figure 13〉Status of On-site Education

Gangwon region

Yeongnam region

Jeju region

Central region

Honam region

Seoul metropolitan region

Year No.

2003 1,4232004 1,2862005 1,4912006 1,6882007 1,500

Total 7,388

Number of Trainees

Regional Centers for GIS Education

1242

Category Course Name Category Course Name Category Course Name

GIS Theory(12)

GIS Introduction

Caseof GIS

implement-ation and

application

Ground informationsystem GIS new

technology

Mobile mappingsystem (4S Van)

Understanding of digital map

Land SuitabilityAssessment u-GIS

Map and coordinatesystem

Urban InformationSystem (UIS)

GISe-textbook

(4)

GIS education for highschool students

Virtual GIS Seoul SDW Constructionand Utilization

Study for middle and highschool students

Advanced GIS

GIS Toolpractice (11)

GEOMania/EasyMAP

1st year’s society textbookof high school (8 types)

Spatial philosophyand GIS Zeus Educational practice for

secondary school teachers

GIS inspection ArcSDE data serveroperation

Thematic mapproduction (1)

Understanding ofenvironmental geographicinformation

Enterprise GIS Arc GIS (Beginning,Intermediate)

Internationalseminar

(3)

Ubiquitous technologystatus and prospect

GIS space analysis(Beginning, Intermediate)

GeoDB implementationand operation

Cyber territoryimplementation / e-government development

GIS standard (Beginning,Intermediate)

GIS program practice(Beginning, Intermediate)

GIS-based Disaster-freeTerritory implementationstrategy

GIS Policy(2)

NGIS master Visual Basic Program

Explorationtheory and

practice(7)

Photogrammetry

3rd NGIS Master Plan C++ Programming Remote sensing

Geographicinformationproduction

(3)

Digital map production GIS WAMP practice Satellite image processing(PG-Stream)

GPS measurement anddata processing

GIS newtechnology

(10)

Ubiquitous computing Satellite image processing(ERDAS)

Production ofunderground facility map Mobile GIS Remote sensing (Satellite

imagery / spatial analysis)

Case of GISimplementa-

tion andapplication

(9)

LMIS Web/Internet GIS Digital photo surveying

Road managementsystem LBS Utilization of high

resolution satellite imagery

Underground facilitymanagement system GIS new technology

Surveying (2)

Spatial positioning system

Case of land managementinformation networkimplementation

3D GIS (Beginning,Intermediate)

GPS concept andutilization

Seoul GIS implementationand application

IRS and futuretransportation

DB utilizationand main-tenance (1)

Database utilization andmaintenance

〈Table 8〉Status of Clip Course Production

1143

2. Present Status of National Spatial Data Infrastructure

responding to the questions and requests of learners. In addition, the data on the siteis regularly updated, enabling members to rapidly access new GIS-relatedinformation, and this has led to the active involvement of many GIS learners, whoshare information with each other. As of 2007, GIS Online education has beenprovided to 21,000 members.

In addition, the government has produced a “clip course” that allows everyoneto learn and utilize GIS-related contents easily, improving the effectiveness of Onlineeducation. The government has done this by dividing GIS education into various sub-fields, and developing creative educational techniques to enable learners to studywith interest. In addition, various high-quality multimedia content such as a flash andanimation has been added, and learners’ opinions have been sought to ensure that thecourses reflect current needs. Through such efforts, the government produced 65 “clipcourses” covering 12 different fields, from 2003 to 2007.

By carrying out a combination of On-Site education and Online education, thesynergy of GIS education can be improved. That is, the level of GIS awareness can beimproved without any business vacuum through the execution of online remoteeducation, which is not limited by time and space. Effective practical and theoreticaleducation in GIS is provided through On-Site education. The On-Site educationconsists primarily of a basic and conceptual education, while the online educationdeepens the educational contents and expands the education area. In addition, thesame elements of the educational infrastructure, such as the teaching material andpractical program, are utilized in Online education and in On-Site education. Thus, bycarrying out Online education and On-Site education together, synergy is improved.

(3) Future Plan

In the future, the GIS education business will be carried out while maintaining thepresent framework. Educational demand by region and field will continue to be satis-fied through the regional On-Site education. To improve the effectiveness of On-Siteeducation, custom-made special education programs that are tailored to suit a specificobject, level and goal of education will be developed and operated. This means thateducation programs will be developed by occupation and by field, and classified intobeginner level, intermediate level and high level.

Secondly, the Online education will be expanded. To do this, the courses thatupgrade and provide the system need to be varied. That is, it is difficult to developand operate various functions, such as the one-on-one lessons and studying abilityevaluation provided by the virtual GIS Teaching Center (Virtual GIS TC) with thepresent system. Therefore, the online education system must be upgraded, andvarious new functions must be developed. In addition, the effectiveness of online

1244

education must be improved by varying the type, level, and implementation methodof the online courses. In other words, digital education contents, such as “clipcourses”, will be systematically developed, and data will be updated constantly. Byoperating this system stably, a framework for active remote education can be built.

Thirdly, user-oriented customized GIS education will be provided. To achievethis, an education plan will be established by investigating the education demand.The education demand will be determined by dividing learners into local governmentofficials, central government and public institution employees, secondary schoolteachers, and private sector human resources. For local government officials, centralgovernment and public institution employees, the position transfer cycle must beconsidered. In addition, educational program and methods that can improveconvenience to the user will be developed, to ensure a user-oriented customized GISeducation. For example, there is a plan to provide On-site education for geographyteachers in Gwanak-gu, by establishing a night course. Detailed education history fortrainees will be managed, such as trainee records and levels. In addition, trainees willbe attracted through the use of friendly characters, such ass animation, games, andavatars.

6) Institutions and Organizations

(1) Institutions

The government has recognized that GIS is a new infrastructure of the knowledgeinformation era, and has currently executed the third NGIS Project since the launch ofthe first NGIS Project in 1995. When GIS was firstly introduced in Korea in the early1990’s, the regulations relating to spatial information were prescribed in a manner thatsuited the analog environment of manual work, rather than the electronic environ-ment. Accordingly, the spatial information-related regulations of the past were notsuitable for the digital environment, which was the basis of GIS. In order to overcomethis problem, the government formulated the NGIS Law as the institutional supportfor the efficient implementation of the NGIS Project in January 2000.

The NGIS Law is composed of total 8 Chapters and 29 Articles, starting with thegeneral provisions and progressing to the NGIC. In addition, the NGIS Law prescribessupplementary rules, punitive rules and additional rules. The purpose of the NGISLaw is to contribute to the reasonable utilization of territory and resources and to thedevelopment of the national economy through providing a diverse range ofgeographic information to the nation by prescribing the provisions on the efficientimplementation, utilization and maintenance of the NGIS. To achieve such a goal, the

1145

2. Present Status of National Spatial Data Infrastructure

structure of the NGIS is arranged, and the infrastructure of the NGIS is built up. Also,conditions are prescribed for NGIS implementation, maintenance, application anddistribution, and security management and government supports.

The Enforcement Ordinance of the NGIS Law is composed of a total of 24Articles, and prescribes the provisions entrusted by the NGIS Law and othernecessary provisions required for enactment. The Enforcement Ordinance of the NGISLaw prescribes the determination and modification of the NGIS Master Plan, theitems & contents of the definite Action planning, and the details regarding theoperation of the NGIS Promotion Committee. In particular, it describes the definiteitems and objects of the framework data, and prescribes the details for theestablishment and duties of the organization that will take charge of the geographicinformation utilization and distribution (Geographic information distribution andmanagement organization). In addition, it prescribes the detailed provisions that mustbe included in the security management provision for the protection of geographicinformation.

However, considering the NGIS Law formation structure, the EnforcementOrdinance is not formulated, and there are no detailed provisions & guidelinesrequired for the implementation, management, distribution and utilization ofgeographic information. In addition, because laws such as the Land Survey Act andLaw of Cadastre do not explicitly mention the other laws’ provisions, the NGIS Lawdoes not execute its actual role sufficiently. Accordingly, the future NGIS Law must bethe legislative system by which the present NGIS Law is converted to a nationalspatial information-based law. It is expected that the overlapping of spatialinformation production and management will be minimized, and interoperabilitybetween information systems will be obtained. Also, because consistent spatialinformation will be obtained by a consistent legislative system, the quality of spatialinformation will be improved and costs will be reduced.

1246

〈Figure 14〉Construction of the NGIS Law

Exp

lanato

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(22)

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Pro

mot

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re

1147

2. Present Status of National Spatial Data Infrastructure

(2) Organizations

In order to promote the NGIS Project and to review matters relating to implementa-tion, maintenance and utilization of the NGIS, the NGIS implementation system isorganized under the name of the NGIS Promotion Committee, to improve theproject’s efficiency and effectiveness. The NGIS Promotion Committee coordinatesmajor policies regarding NGIS implementation, maintenance and utilization, andevaluates the master plan and Action planning and performance. In addition, theNGIS Promotion Committee performs the function of framework data selection andgeographic information distribution & protection. The NGIS Promotion Committee iscomposed of no more than 29 members, who can be Vice Ministers of related centralministries, directors, heads of regional governments and private experts, as well as theMinister of Construction and Transportation, who is the chair.

The NGIS Promotion Administrative Subcommittee was organized for theeffective performance of the NGIS Promotion Committee, the higher organization.The NGIS Promotion Administrative Subcommittee coordinates inter-ministry andinter-division tasks, and executes the directives of the NGIS Promotion Committee. Inaddition, the NGIS Promotion Administrative Subcommittee deliberates and decideson matters discussed in each subcommittee. The Director of the Housing WelfareBureau at the MOCT is designated as the chair of the NGIS Promotion AdministrativeSubcommittee. The NGIS Promotion Administrative Subcommittee is composed of nomore than 19 members, including director-level officials of the related ministries, thedirectors of local government, and private experts.

Each subcommittee draws actual policy direction and tasks, and determines thetask-related issues in each concerned field. Each subcommittee then presents these tothe NGIS Promotion Administrative Subcommittee. Each subcommittee alsoestablishes the action plan for next year based on each subcommittee's guidelines, andevaluates the prior year’s performance. Each subcommittee consists of no more than19 members, and shall include working level-officers from the related institutions andprivate experts. To be managed as a working group system, the subcommittee isorganized by the working-level officials. The Expertise Assistance Organization isdesignated and managed by each subcommittee.

In addition, each subcommittee receives consulting and advice on NGIS througha civil advisory committee, which is made up of no more than 19 private experts byfield. In particular, the subcommittee executes actual NGIS Project implementation,and will be changed depending on the particular characteristics of a project. The firstNGIS Project was executed mainly by five subcommittees, including the GeneralAffairs Subcommittee, the Framework Data Subcommittee, the TechnologyDevelopment Subcommittee, the Standardization Subcommittee and the Land

1248

Information Subcommittee. The second NGIS Project was executed mainly by 8subcommittees, including the General Affairs Subcommittee, the Framework DataSubcommittee, the Technology Development Subcommittee, the StandardizationSubcommittee, the Cadastral Information Subcommittee, the GIS EducationSubcommittee, the Industry Support Subcommittee, and the Utilization &Distribution Subcommittee. As the NGIS Project has been actively executed, it hasbeen extended to diversified fields.

The third NGIS Project has been executed mainly by five subcommittees, asshown in <Figure 15>. The Framework Data Subcommittee implements and updatesthe framework data, and maintains partnerships between institutions. In addition, itensures data compatibility and quality level. The Territorial Information PlanningTeam of the MOCT is the supervising institution.

The Standardization Subcommittee executes the duties of exploring, modifyingand updating the standards to smoothly implement NGIS standardization, and hasbeen operated under the joint supervision of the MIC, the MCIE, and the MOCT. TheUtilization & Distribution Subcommittee has been operated by the MOCT for inter-GIS application system linkage and integration and tasks for output utilization,utilization-centric geographic database implementation and system operation.

The Technology Development Subcommittee selects the technology to bepreferentially developed and evaluates the technology development results &performance, and is jointly operated by the MIC and the MOCT. The Policy andSystem Subcommittee executes tasks for the advancement of GIS policy, such asannual project evaluation, action plan generalization & support of industry, education,public relations and system improvement, through integrating the Industry SupportSubcommittee and GIS Education Subcommittee during the second NGIS Project. Ithas been operated by the Territorial Information Planning Team of the MOCT as theNGIS General Affairs Division.

1149

2. Present Status of National Spatial Data Infrastructure

7) Research Projects for NGIS

(1) Overview

In 1995, the first NGIS Master Plan was established. When the plan was established, itwas predicted that the NGIS Project would require a massive investment for a longperiod of time. In addition, many problems and difficulties were forecasted due to theapplication of new technology, and active investment was keenly required for theresearch to control a extensive area. In addition, a research project was conductedwhich would support the general area of NGIS, to enhance the understanding ofNGIS and to implement the NGIS Project efficiently and successfully. The NGIS Lawwas formulated in January 2000 to promote the successful implementation of theNGIS Project. Article 9 of Chapter 3 of the NGIS Law is a provision relating toresearch development, and arranges the legal ground. On this basis, annual researchof a scale of 0.8~1 billion won has been executed.

The research project included in the plan included 14 basic research areas,including research on detailed NGIS plans, and the spatial information database’sframework, and 13 pilot projects to improve spatial information utilization, such as a

〈Figure 15〉3rd NGIS Implementation System

NGIS Promotion Committee

Civil Advisory Committee

StandardizationSubcommittee

FrameworkData

Subcommittee

TechnologyDevelopmentSubcommittee

Utilization &Distribution

Subcommittee

Policy SystemSubcommittee

Expert Assistance Organization

Administrative CommitteeNGIS Promotion

1250

pilot project of environmental information DB implementation using GIS, and a pilotproject for implementation of a national infrastructure maintenance system.

With this as the background, the research project for NGIS support has beenconducted for the purpose of directly and indirectly supporting all areas of NGIS,such as execution of pilot projects to undergo the process of trial & error beforecarrying out a large-scale project, basic research for planning, technologydevelopment for applying to the utilization system, the implementation of frameworkdata for arranging the NSDI, and standard-related research.

(2) Implementation System and Present Status

In terms of the procedures and methods by which research projects are carried out, theMOCT first explores the theme of the research project through the demand surveyeach year for the central ministries, local governments, industries, universities, andresearch centers. When appropriate, the MOCT selects a proper theme according tothe necessity of policy, such as the infrastructure for a mid and long term plan, as wellas the NGIS Master Plan. The research project selected by such procedure is executedby the research center well acquainted with the corresponding field as the designatedresearch center, or is executed by various GIS institutions of industry, universities andresearch centers through public subscription. The results of such research are reflectedon the exploration of next year’s research theme and the execution of the next year’sproject, based on the evaluation of experts and the self-evaluation of the researchinginstitution.

In terms of the status of research projects conducted up to now, the KRIHScarried out 36 research projects during the period of the 1st NGIS Mater Plan, from1995 to 1999, which were focused on support research for DB implementation andapplication system development. As various experts from industry, academia andresearch centers have participated based on the legal ground since 2000 when theNGIS Law was formulated, 59 wide-ranging studies have been executed, includingthe central and local government's GIS project-related research, the evaluation of theNGIS Project, GIS education, the conversion of the world geodetic coordinates system,and GIS supervision. Even now, three studies are in progress, relating to theframework data road-map, standards research, and basic research for planning (see<Table 9>).

1151

2. Present Status of National Spatial Data Infrastructure

〈Figure 16〉Research Project Implementation System

Ministry of Construction & Transportation(NGIS Promotion Administrative Subcommittee)

Exploration of Research Theme

Research Result Evaluation

Research Execution

DesignatedResearch Center

Professional researchcenter in thecorrespondingresearch field

-

EvaluationResult

Feedback

Research Centerby Public Subscription

Select the appropriatecenter after receivingproposals from industry,universities andresearch centers

-

Policy Request

Master planning-Mid & long-termstrategy establishment

-

Other policies-

ResearchDemand Survey

Central governmentministries

-

Local governments-Industry-Universities andresearch centers

-

1252

(3) Future Implementation Plan

Up to now, research projects for intensively executed DB implementation were mainlyconducted in the period of the 1st NGIS Master Plan. During the period of the 2ndNGIS Master Plan, research was conducted in extensive and varied fields for the uti-lization of data implemented during the period of the 1st NGIS Master Plan, and theseincluded education & manpower cultivation, 3-dimensional spatial informationimplementation, Mobile, LBS-related research, from the basic research for the develop-ment GIS application system.

However, in many projects conducted over the past 10 years while the 1st and2nd NGIS Master Plan were executed, multiple problems occurred, including adiscord of spatial data, lack of current information, and budget waste resulting fromoverlapped system development. Even though research projects were continuouslyconducted to solve the problems, it was recognized that an unresolved fundamentalcause was the lack of NSDI. Through this infrastructure, research projects are now inprogress, focused on the arrangement and supplementation of the NSDI in the periodof the 3rd NGIS Master Plan in 2006.

Accordingly, the NGIS support research projects of the future will be focused onthe NSDI, which had been a neglected element in the process of the 1st and the 2ndmaster plans. This will involve basic research and actual research development for thearrangement of the NSDI, after which further research projects will be scheduled. Inaddition, basic research that responds to the new information technology paradigmand a research project for actualizing the future spatial information society will beconducted together.

1153

2. Present Status of National Spatial Data Infrastructure

Year Title

1995

Design of Network for National Geographic Information System

Planning development of Underground Facilities Management System

Basic concept of spatial information database

Case Study of GIS Database Development: Focused on Foreign Countries

Informatization and GIS Application Developments of Local Governments

Overseas Public GIS Development Trends and Best Practices

Research on plans for NGIS construction

Master Plan for Transportation GIS

Digitizing Thematic Maps for Spatial Planning

Research on scheme for digitization of national base map

A Study on the Format of the Digital Map

A Survey on New Technologies of Photogrammetry

1996

Design of underground facilities management system and validity analysis

Detailed planning and establishment of guidelines for development of Public GIS Application System

Research for establishment of spatial information distribution management agency

Public information DB design and detailed implementation method

Empirical study for digitization of common thematic maps

1997

Establishment of general plan for the 2nd NGIS Project

Legislation for Promoting the Use and Exchange of Spatial Information

Establishment of the Road Plan using GIS

Development and Promotion of Spatial Information Network

An Experimental Study on Building a Spatial Information Database

The Application of GIS for National Land Use Planning

A Study on the Guidelines for Mapping a Common Thematic Map

A Study on the Digital Mapping Method of the Thematic Map

The Application of GIS for Location Decision

1998

Basics and Practices of GIS

Supportive Measures for Local Government GIS

Building a National Spatial Data Infrastructure

Analysis of the Effects of GIS Construction

Application of Satellite Imagery for Improving National Spatial Data Infrastructure

Application of GIS for Managing National Territory: Focused on Natural Environment

White Paper: Building 1/5,000 Digital Topographic Maps

Application of GIS for Land Use Planning

〈Table 9〉Status of Research Projects

1254

Year Title

1999Introduction of Audit system for GIS

Fostering the Use of National Statistical Data by Using GIS

2000

Strategies for the Informatization of Local government through GIS

Fostering and Supporting GIS Industry

A Study on Establishing the 2nd Master Plan for National GIS

Development of Widely Applicable Management Program for the Management of Underground Facilities

Establishment of East Asia Geographic Information Processing Center

Establishing and Managing Ground Control Points to Prepare for the Introduction of a Global Coordinate System

Strategies for Building DEM for Korean Topography

Integration of Construction-transportation SOC Information System

Assuring Quality of Framework Data

Trends of Leading GIS Technologies and Building International Partnerships

Using NGIS Digital Maps on Transportation Fields

2001

A Study on Common Data Model for NGIS

National Policy Direction for GIS Education

A Study on Operation and Development of Portal Web Site for GIS Education and Public Information

A Study on Policy Evaluation and Implementation Plan for National GIS

A Study on a White Paper of the First NGIS Construction Project

Building GIS-based Knowledge Management System for Administrative Tasks in the areas ofConstruction and Transportation

Evaluation of Local Government GIS Projects and Promotion of the Use of Local Government GIS

Technologies for Linking NGIS Project and Water Resources Informatization

Developing Advanced Application Technologies for Mobile GIS

Developing Technologies for Citizen GIS

Building National Geographic Information for Transportation Sector

2002

Introduction of Acceptable Quality Level for Geographic Information

Strategies for National Spatial Data Infrastructure

A Study on the Real-time Updating Methods for the GIS DB

Building a New National Geodetic Control Point System through an Optimum Design Method

Establishment of Implementation Plan for 3D Spatial Data Construction

Methodology of Cost-benefit Analysis for GIS Applications

Revitalization of GIS Market for m-Government

Strategies for Local Government GIS

Advancing Local Government GIS for Citizen-based Services: Jeju

(Continued)

1155

2. Present Status of National Spatial Data Infrastructure

Year Title

2002 Definition of GIS Project Management and Development of Guidance

2003

Calculation of National Coordinate Transformation Parameter for Island and Ocean Areas for WGS-84

Maintenance and Management of Local Government Underground Facility Database using LBS

Developing Analytical Models and Database for Natural Disasters from the Outcomes of National GIS

A Study on the Utilization of the 3D Urban Space Model

Enhancing the Usability of National GIS - Focused on Effective Measurement

Promoting Local Government GIS to Satisfy New Technological Development

A Study on the Handling Method of the Uncertain GIS DB

Utilizing Ubiquitous Computing Technologies for GIS and LBS

A Study on the Linkage Method of e-Government and GIS

Improving Legislation to Foster Local Government GIS

Strategic Development of East Asia Geographic Information Using Satellite Networks

Participating in the Global Spatial Data Infrastructure

2004

Management Strategy of Location Information to Prepare for a Post GPS Era

Building e-Library for Managing Urban Infrastructure Facility

A Study on Establishing the 3rd Master Plan for National GIS

2005

A Study on a White Paper of the Second NGIS Construction Project

A Study on the Next-Generation Intelligent Control Points

Supporting the Export of Domestic GIS Technologies to China

2006

A Study on Integrated Management for the Framework Data

A Study on Implementing Standardization of National GIS

A Study on Implementing Project Evaluation and Action Plan for National GIS

Strategies for Making International Partnership and Cooperation to Globalize National GIS

Definition and Management of Census Block with GIS-based Approaches

A Study on the Standard Cost of GIS Application Development

Integration and Application of Local Government GIS to Build u-City

Establishment of Master Plan for Edu-GIS

Transformation of Cadastral Coordinate System into Global Coordinate System

2007

A Study on the Roadmap and Interoperability for the Framework Data

Development and Public Relations of NGIS Standard

Establishment of Project Evaluation and Plan for National GIS

(Continued)

1256

3. Major NGIS Projects

1) Korea Land Information Systems

(1) Land Regulations and Information Systems in Korea

Land regulations vary according to different countries. Land regulations in Korea canbe broadly divided into three parts: cadastral management, ownership registry, andland use management. The legal basis and executing body differs for each part. Forthis reason, their information systems have been built in an exclusive rather than anintegrated manner.

Cadastral Management is a system that provides public access to a factualrelationship of land boundaries using locational punctuality based on the land survey.The legal foundation is based on 'the Law of Cadastre' and the MOGAHA of Korea isin charge of this system. There are two main documents involved at the core of thecadastral management system: 'the Land Registry', which has the attributes of land byparcels such as Parcel Numbering Unit, legally given land use, area, etc., and 'theCadastral Map', which has the boundaries and X-Y coordinates of each land parcel.From 1987 to 1990, more than 34 million Land Registry sheets were digitized, in agovernment-funded project to build the Cadastral Information System. This projectwas completed in early 1990, and is used to manage the Land Registry and publicprovision services. To digitize the Cadastral Map, the Parcel-based Land InformationSystem (PBLIS) project was undertaken from 1996 to 2002 by the MOGAHA and theKorean Cadastral Survey Corporation. Later, the PBLIS was integrated with the LandManagement Information Systems (LMIS) controlled by the MOCT, and then wasfurther developed into the KLIS in 2004.

The Land Ownership Registry is a system that shows the intangible relationshipof ownership of each land parcel, and is controlled by the Supreme Court, based onthe 'Law of Real Estate Registry'. The Supreme Courts launched information systemsto digitally control land ownership management from 1994, and these systems werecompletely operational in 2002. The second period of the project began from 2003. Thepublic can now apply for and be issued most of the official documents related to theland ownership registry via the Internet.

The Land Use Management is a system related to land use policies, landappraisal, land trading management, land use planning, and it is legally based onseveral laws executed and authorized by the MOCT. To build this computerizedsystem, the LMIS project was launched in 1998, with a pilot test at Nam-Gu in DaeguMetropolitan City. Research into BPR (Business Process Re-engineering), Data

1157

3. Major NGIS Projects

standardization, and Regulations for the project have been undertaken for the pilotproject. The LMIS project has been further developed for almost 10 years, and wasreplaced by the KLIS, which was later supplemented by the PBLIS.

Thus, the KLIS was an integrated system encompassing the LMIS and the PBLIS,which are mainly operated by the MOCT in cooperation with the MOGAHA. Thestructure of the KLIS was designed to have a 3-tiered Client-Server architecture. Theintegration project between the LMIS and the PBLIS was planned in 2003 and theintegrated systems (the KLIS) were delivered to local governments in 2005. Itsarchitecture has been further developed to adjust to the changes in the webenvironment since 2006.

(2) KLIS Development

① System Architecture of the KLIS

The KLIS was designed to be an ‘open architecture’ in order to support heterogeneousdistributed computing environments of local governments consisting of hierarchical3-tiered systems: the clients, the application server, and the database server. The appli-cation server was operated on the basis of CORBA (Common Object Request BrokerArchitecture), which mainly consists of the Data Provider, the Edit Agent, and theMap Agent as illustrated in <Figure 17>.

〈Figure 17〉System Architecture of the KLIS

CORBA(Orb)- OP

Data Provider

Client

DBServer

Remote Service

Visual Application

Visual Basic,Map Object

MapOCX(VC++)

Web Browser

Java(Applet, Servlet)Cgi JPS, ASP Kiosk

Facsimile

Editing Application

AutoCAD ARX(C++)C/C++ /VB Application

ORACLEORACLE

Native API

ZEUSZEUS

Native API

GothicGothic

Native API

ApplicationServer

Local GovernmentMOCT

Edit agentMap agent Web Server

SDE

1258

The Data Provider searches spatial data from the databases using the GISengine, and relays them to the Map Agent or Client. The Map Agent creates a mapimage from the spatial data relayed from the Data Provider, and relays the createdmaps to the Client. The role of the Edit Agent is to edit (input, modify, and delete) thespatial data. In addition, the web server can be added to the architecture, to facilitateapplications from the public via the Internet.

② Application Architecture of the KLIS

The core of the KLIS lies in the management support systems for the land administra-tion of local governments. Data produced at the local government level is collectedand relayed to the regional and central government, to support the decision-makingprocess on land policies. Public services can also be provided at the local government,regional government and central government level via the Internet, and through spe-cially designed Web portal services. Communication between the public and adminis-trators of local/regional/central governments takes place both via the Internet and thegovernmental intranet. Other client devices are tightly connected with the high-speedgovernmental intranet, so that data produced and modified in a specific client can beshared and synchronized with others (see <Figure 18>).

〈Figure 18〉Application Architecture of the KLIS

Land PolicyDBR

egio

nal

Gov

Civil Service SystemSpatial Planning System- Landuse plan certificate- Land price certificate- Cadastral map certificate

Land PolicyDB

MO

CT

Decision Making System of Land Policy

Pu

blic

Ser

vice

(

Inte

rnet

)

Lo

cal G

ove

rnm

ent

KLIS MiddleWare Administration MiddleWare

MiddlewareConnection

Zoning Mgmt. System

Land Admin. System

Spatial DB Mgmt. System

Official Documents Provision System

Cadastral Map Mgmt. System

KLIS DB

KLISSpatial DB

KLISAttribute DB

Local Gov General Admin DB

Land AdminDept.

Civil Engineering Dept.

Civil Appeal Dept.

Cadastral Dept.

Land/ForestAttribute DB

Finance/TaxAttribute DB

Resident DB

System Summary KLIS Services

Continuous/Edit Cadastral Map

Mgmt. System

1159

3. Major NGIS Projects

③ Database of the KLIS

Essentially, two kinds of databases were constructed in one physical database serverby local governments, which were spatial databases and attribute databases. Spatialdatabases include cartographic databases, cadastral databases, continuous cadastraldatabases, edited cadastral databases, and zoning databases. Rather than all of theinformation in the original cartographic maps, only the major spatial features such asroads, buildings, and railways, were collected and included in the cartographic data-bases. Continuous and edited cadastral databases were built by merging tile-baseddigital cadastral maps. A zoning database was created using the information gatheredfrom zoning maps maintained by local governments and central governments' indi-vidual departments (see <Figure 19>).

Attribute databases contain information on the physical characteristics of lands,land prices, and real estate brokerages. As the KLIS databases play the role of themain provider of spatial databases to the other information systems in localgovernments, the KLIS databases were standardized so that the other informationsystems could easily access them.

〈Figure 19〉Database of the KLIS

DatabaseSource Data Output

Topographic map

Land price map

overlay

overlayconverted& edited

Framework

Integrated map

Digital topographicmap(DXF)

Continuousrevision

Rubber-sheetedbased on topographic

Digital cadastral map(each file)

Zoning map

based ontopographic

Continuousinput Rubber-sheeted

Zoning map (ex. urban land use)

National land use planning, etc.

Publicized land price, land propert ies, etc.Registerrecord

input

Land business

Attribute

Register

1260

(3) Expected Effects and Future Directions for the KLIS

The performance of the KLIS seems to be better than anticipated. Enhanced public ser-vices via the Internet have been welcomed by the public, and are helping to save timeand cost. The outsourcing cost to make land price maps is no longer necessary,because the KLIS has replaced this task. However, consistent efforts have to be madefor further development of the KLIS project as follows;

i) Information innovation can be an ideal goal for those who are working forlocal governments. The shift from an analog to a digital environment requires manychanges, and for this reason, some resistance within an organization is inevitable. Inaddition, the launching and completion of an information system is a time-consumingtask. Without consistent support from the local government officials, informationsystems such as the KLIS will never take root. The planners who design informationsystems should bear the end-users in mind, and must devise the most appropriateway to motivate them - in this case, local government officials.

ii) For the government to successfully adopt an information system, there mustbe powerful organizational supports. In the early stages of the information systems,hard work at the individual level is definitely necessary, as well as organizationalsupports, because there are many problems that cannot be solved by individuals.

iii) The BPR (Business Process Re-engineering) before building the informationsystems is a prerequisite factor. It is hard to superimpose a new information system onthe outmoded regulations of the past. Amendments and adjustments to out-of-dateregulations in order to meet the requirements of the Information Age will enable asmoother and more rapid paradigm shift. One of the key factors that will determinethe successful introduction of an information system is how well we transform fromthe analog environment to the digital one.

The ultimate aim of the KLIS is to build an e-Land, where land does not simplymean soil or pebbles, but a historical ground, below which our history lies, and onwhich our future will stand. Thus, e-Land goes beyond its literal meaning- amanagement of physical lands - and becomes a mirror that reflects philosophicalperspectives such as personality, characteristics, and a way of life.

1161

3. Major NGIS Projects

2) Roads and Underground Facilities Management Systems

(1) Background

Underground facilities, such as water, drainage, electricity, gas, heating and road facilitiesare critical for the health and safety of our citizens. It is very important to manage roadsand underground facilities consistently and efficiently for the convenience and safety ofour citizens. Obtaining information regarding roads and underground facilities for exca-vation work usually takes time and effort, because an individual agency needs to visit agovernment office to ask for the information. As there is not sufficient cooperation interms of sharing information between agencies, overlapping investments can result in theimplementation of each facilities database. In spite of the high intimacy of this utilitiesinformation, each agency produces information in a different format, and insufficient shar-ing of the information results in an inefficient excavation working process.

We offer an improved database construction process in order to preventunnecessary investment, and to provide improved accuracy of roads andunderground facilities surveys for the acquisition of database in geospatialinformation and the underground facilities integrated management system, andoffered a strategy and regulation for the construction of roads and undergroundfacilities information sharing systems. Also, each Local Government has developed itsown management system for road facilities, so in order to prevent duplicatedinvestment of public funds, as an alternative proposal on this project it should beconsidered that the Widely Applicable Management Program (WAMP) can be reusedand easily customized by each Local Government, and appropriate strategies andguidelines for this must be developed.

(2) Purpose

There are two purposes of this project. One is to examine the need to develop a roadsand underground facilities management system as an alternative proposal to preventduplicated investment of public funds, and the other is to form a strategy and guide-line to develop such a roads and underground facilities management system. WAMPfor the roads and underground facilities management system needs to be developedas multiple types of GIS software, and a “Standard Specification” which describes theset of specifications to develop WAMP. Agencies should develop multiple types ofapplicable management programs according to the Standard Specification, and a Test-ing & Certification System must be implemented to examine the suitability of applica-ble management programs.

1262

(3) Scope

84 local governments that have been processing the digitalization of roads and under-ground facilities are selected. The main scope of the project involves local governmentsthat have not implemented a management system for roads, or who have a plan to imple-ment such a system, those who have implemented only the base map and database ofroad facilities, and those whose previous management system needs to be renovated.

A cooperation system should be presented that would allow for theimplementation of a kind of network sharing of information among LocalGovernments, along with effective methods to induct an integrated ManagementSystem for underground facilities. The Standard Specification of WAMP for roads ismade by analyzing common tasks related to roads. Inductive methods and the guidelineshould be established, to enable Local Governments to implement a management systemthrough WAMP for roads.

(4) Present Status of Roads and Underground Facilities Digitalization

By analyzing the burial status of 7 kinds of underground facilities, the status of themanagement processing for roads and the status of the management system for roadand underground facilities, the present digitization status of roads and undergroundfacilities should also be checked. In addition, duplicated work and an analysis of limitshould be checked by analyzing previous businesses and studies, such as the integrat-ed management system and components of the MIC of the Republic of Korea.

Source: MOCT of the Republic of Korea, The Present Status of GIS, May 2007.

FacilitiesTotal

buried lengthDigitalization

length% Budget Area

Water 85,655 74,445 86.9 181,799,000,000 8,275

Drainage 73,470 57,068 77.7 134,957,000,000 6,084

Road 56,571 42,370 74.9 125,396,000,000 7,047

Gas 2,511 2,511 100 14,575,000,000 1,214

Electricity 13,587 13,587 100 118,805,000,000 1,681

Telecom 576,135 174,640 30.3 4,850,000,000 nationwide

Oil 946 16 1.7 7,000,000 1

Heat 2,354 1,950 82.8 188,000,000 388

〈Table 10〉Present Status of Roads and Underground Facilities Digitalization (unit: km, won, km2)

1163

3. Major NGIS Projects

(5) Present Status of Management Systems

As shown in <Table 11>, a total of 84 municipalities (local governments) were investi-gated to check the status of the management system for roads and underground facili-ties in Korea. In detail, out of a total of 84 municipalities, water supply managementsystems have been constructed in 69, drainage supply management systems in 62, androad facilities management systems in 62. In addition, systems for most other facilitieswith the exception of oil, such as gas, electricity, telecommunications, and heating,have been developed or operated by different management institutes.

(6) Application Architecture of the Integrated Management System

In this project, a web-based integrated management system for underground facilitiesusing Virtual Private Network (VPN) is presented, to solve the problems of securityand cost. An overview is shown in <Figure 20> on the next page. This project ana-lyzed communities in small-to-medium-sized municipalities, with the aim of carryingout standardization on common operations of the municipalities. In addition, securityand financial problems in the integrated management system have been addressed, asWAMP regarding standardization is developed. This project shows the capacity andflow of related tasks by investigating the management process and regulations forroads, and by having an interview with officials who work in the management ofroads and underground facilities. After collecting and analyzing the information of

Source: MOCT of the Republic of Korea, The Present Status of GIS, May 2007.

Facilities Name of SystemSystem Account

Local Gov Agency

Water Water supply management system 69 / 84 -

Drainage Drainage supply management system 62 / 84 -

Road Road facilities management system 62 / 84 -

Gas Gas pipe network management system - 2

Electricity NDIS - 1

Telecom TOMAS - 3

Oil - - 1

Heat Heating pipe network management system - 1

〈Table 11〉Status of Management Systems for Roads and Underground Facilities(unit: account)

1264

the management systems already developed for road facilities, the flow of informationand the capability of the management system is analyzed for each piece of the process.For the previous project, related reports and case studies were collected and analyzed,and several conferences were held to gather the opinions of various professionals.

(7) Expected Effects and Policy Implications

The expected effects of this project are as follows;

Firstly, the development of a WAMP for roads, water and drainage to make aStandard Specification will save time for analysis, allowing the management system tobe implemented by each Local Government in a shorter period of time. Secondly, themanagement process for roads, water and drainage can be consistent for each LocalGovernment, because the program will be based on the Standard Specification, whichincludes the main elements of the Graphic User Interface. Third, the system can beconveniently expanded according to the needs of each Local Government, because theStandard Specification is made in consideration of future expansion andcustomization.

〈Figure 20〉Architecture of Web-based System for Underground FacilitiesManagement

Agency/VPN

Local Gov/Intranet

ASP

LANLAN

department

Hub

Electricity Telecom Gas Others

Firewall

VPNGateWay

Web GIS S/WDBMS

IISWin2000 Server

SQL NETTCP/IP

Facilities DBFacilities DB Service DBService DB

AppletMS Internet Explorer

MS WindowsHTTP

Web GISServer

Internet

DB Syncronization

*

1165

3. Major NGIS Projects

So, after selecting the cities that had already proceeded to digitize their map ofmanagement for road facilities, the same kind of work should be extracted, and theoutline of WAMP should be set up by analyzing both the management process forroad facilities and the capacity of the Management System that has been alreadydeveloped. Finally, it is possible to implement applicable programs to suit actualcircumstances, because the product can be verified through the Testing & CertificationSystem.

3) Korea Planning Support Systems

(1) Outline of the KOPSS

Korea’s central government has set up various spatial plans through the procedure ofplan-do-see to construct livable national spaces. However, various unpredicted errorsin spatial planning have caused problems. To minimize such errors and problems, it isnecessary for the government to construct a spatial decision support system (SDSS)that can analyze and solve the expected problems in the process of setting up spatialplanning. The rapid growth in GIS-based spatial analysis technologies has increasedexpectations related to the utilization of information technology in the field of spatialplanning. The various existing databases based on the LMIS and the ArchitectureInformation Systems (AIS) that have been developed since the mid 1990s have alsoincreased expectations regarding the construction of the SDSS.

The Korea Planning Support Systems (KOPSS) are a kind of SDSS that providespatial information using various data and appropriate analytical methods, in order tosupport reasonable spatial planning. The purpose of this chapter is to introduce thedevelopment strategy and suggest the structural framework of the KOPSS byconsidering the comprehensive basic components of the GIS-based spatial decisionsupport systems. The objects of this project are the various spatial plans and nationalpolicies that the central government and local governments set up.

The KOPSS project started in 2006, and will be finished in 2010. The MOCTprovides funds for the project, and the KRIHS performs the project. As case studyareas, four local governments participate in the project to reflect practicalrequirements. The KOPSS development research committee is composed of theMOCT's relational team and local government officials. The KRIHS researches modelswith the help of working groups composed of spatial planning experts, and thesystem development company has the responsibility of developing KOPSS models.

1266

(2) Basic Concept of the KOPSS

The Framework Act on the National Territory describes spatial policy and planningfor the sustainable development of national territory. The purpose of KOPSS develop-ment lies in the scientific support of spatial planning for sustainable development.Thus, the vision of the KOPSS is the sound development of national territory, the pro-motion of Korean people's welfare, and the improvement of the quality of Koreanpeople's life (see <Figure 21>).

To achieve the vision of the KOPSS, it is necessary to construct applicationsystems and assure the strategies of the base environment of systems. Applicationsystems are sub-systems that deal with various data and knowledge in a reasonablemethod, in order to elicit information required in the process of spatial planning. Theapplication systems are composed of a user-oriented communication interface, a datamanagement system, a model management system, and a knowledge managementsystem. The base environment of systems refers to the platform that develops andoperates application systems. The base environment strategies are divided intoplatform, integrated spatial database, standardization, and cooperation of systemdevelopment.

〈Figure 21〉Basic Concept of the KOPSS

Strategies

Objective

Vision

Bas

eE

nvi

ron

men

t A

pp

licat

ion

Sys

tem

s

Platform

Integrated Spatial Database Standardization Cooperation

Systems

Sound Development of National Territory, Promotion of KoreanPeople's Welfare, Improvement of Quality of Life

Scientific Supports of National Spatial Policy and Planning(Plan-Do-See) for Sustainable Development

Spatial Database Management

System

KnowledgeManagement

System

Model ManagementSystems

Interface

1167

3. Major NGIS Projects

(3) Application Systems of the KOPSS: Component-based ApplicationSystems

Most spatial planning is based on a series of task procedures. The task procedures aredivided into a number of processes, called “components”, and their processes aredivided into a number of analytical methods called “library”. This division is based onthe top-down concept. Inversely, in the bottom-up concept, planning scenarios as atask are incorporated into components. The task procedure follows the spatial plan-ning process. Thus, component-based systems can reflect the spatial planning processeffectively. The KOPSS is being developed through component-based methods andeach component of the KOPSS is being connected into the standard interface. Thecomponent-based application systems are useful for the KOPSS reusability, flexibility,and expansion.

The development procedure of the KOPSS is divided into three stages (see <Figure22>). The first stage is the pre-process, which involves incorporating the input data. Thesecond stage is the analytical process, which deals with the input data. The third stage isthe presentation process, which prints out the results. The presentation can be visualizedthrough tables, graphs, and maps. A set of above three stages becomes a component, anda set of components can be defined as a model or task (see <Figure 23>).

〈Figure 22〉Development Concept of Components of the KOPSS

Pre-Process- Making Tables- Basic Statistics- Basic Trend Analysis- Basic Spatial Analysis

Analysis- Analysis Method

Presentation- Table- Graph- Map

TaskGenerator

Model BaseApplication Objects

Anal

ysis

Met

hod C12 C13 C14

C21 C22 C24C32 C33

C41 C42

Analysis Model

Interface

C41 C32

C14

C22

1268

(4) Promotion Strategies of the KOPSS

A nation uses various types of spatial planning. Thus, the objects for spatial planningcan be divided into an entire city at the macro level, and individual facilities at themicro level. The urban master plan dealing with entire cities and national territory atthe macro level will require a comprehensive simulation. Conversely, urban facilityplanning at the micro level will require specific simulation for individual facilities.Thus, the characteristics of information systems depend on the objects of spatial plan-ning. The purpose of spatial planning can be divided into specific problem-solvingand broad direction (management) for growth. Urban growth management is long-term spatial planning for urban sustainable development over a period of 10 or 20years. However, urban facility planning is short-term spatial planning to solve theproblem of a lack of facilities. Thus, the characteristics of information systems dependon the purpose of the spatial planning. It is necessary to consider that spatial planningis not independent, but is interactive. Spatial planning has a hierarchical and interac-tive relationship with other planning. Thus, the KOPSS should consider the relation-ship between spatial and other types of planning.

The purpose of developing the KOPSS is to provide decision-makers withinformation required to solve the problems caused by the incongruity between supplyand demand of individual facilities. Thus, the KOPSS falls into Domain I (see <Figure24>). Domain IV is for long-term urban master planning, and requires thecomprehensive simulation. UrbanSim and MetroScope fall into the domain IV,because they are long-term and comprehensive simulation models for themetropolitan spatial planning. The KOPSS will be developed into a long-term and

〈Figure 23〉Definition of Model or Task as a Set of Components

Pre-ProcessComponent

VisualizationComponent

AnalysisComponent

C

AnalysisComponent

A

AnalysisComponent

B

1169

3. Major NGIS Projects

comprehensive simulation model for urban growth management, by considering thehierarchical and interactive relationships between the different types of spatialplanning. The KOPSS will be expanded and upgraded in terms of its function andcapacity.

(5) Analysis Models of the KOPSS

The KOPSS currently has nine analysis models as illustrated in <Table 12>. The firstfive models were developed in 2006, and are being upgraded in 2007. Four additionalmodels will be developed by the end of 2007, and six new models will be added to theKOPSS by 2010. The end-users of the KOPSS models will be mainly the central andlocal government officials involved in spatial planning.

〈Figure 24〉Promotion Strategies of the KOPSS

Ob

ject

s fo

r P

lan

nin

g

Purpose of Planning

UrbanManagement/Maintenance

Long-termUrban

Planning

EntireCity

IndividualFacility

Problem-solving Direction for Growth

1270

Model Function Status

Suitable LandSearching

Support selection of suitable developable land

Developedin 2006

Multi-dimensionalAnalysis

Support making of charts, maps and tables, and visualizationof thematic maps

Urban RenewalSupport analysis of declined areas, and searching of brownfields in the inner cities

Landscape Planning Support landscape simulation and management

Public FacilityLocation Allocation

Support analysis of urban facility location distribution andsearch of potential location sites

Land DemandPrediction

Support estimation of future land use demands

On-goingin 2007

Land Use PlanningSupport analysis of land use suitability, allocation of projectedland use demands, and simulation of land use changes

Urban RegenerationSupport search of predicted redevelopment areas andanalysis of potential areas

Urban Facility Supply SuitabilityAssessment

Support analysis of supply suitability based on standardurban carrying capacity

〈Table 12〉Summary of KOPSS Analysis Models

36

Appendix 4 GIS&T Body of Knowledge & Geospatial Technology Competency Model

37

Appendix 5 Knowledge Partnership List of Experts and Institutions Consulted

Name Title Organization Country E-mail

Nombre Cargo Institución País Correo electrónico

*Ronald F. Abler President International Geographical

Union USA rabler@aag.org

Viviana del Carmen Alva Hart

Especialista Sectorial

InterAmerican Development Bank Panamá Vivianaa@iadb.org

Marcelo G. Antinori IDB representative

in Panama InterAmerican Development

Bank Panamá COF/CPN@iadb.org

Sixto Aquino IDB Washington DC Consultant

InterAmerican Development Bank USA SIXTOA@iadb.org

Jorge Arosemena Director Ejecutivo Fundación Ciudad del Saber Panamá jarosemena@cdspanama.org

*Gladys Bernett Asistente Ejecutiva

Secretaría Nacional de Ciencia, Tecnología e

Innovación/SENACYT Panamá gbernett@senacyt.gob.pa

*Rubén Berrocal Secretario Nacional

Secretaría Nacional de Ciencia, Tecnología e

Innovación/SENACYT Panamá rberrocal@senacyt.gob.pa

*Santiago Borrero General Secretary Insituto Panamericano de

Geografia e Historia Mexico sborrero@ipgh.org

Mauricio Bouskela

ICT Specialist, Science and Technology

Division (WDC) InterAmerican Development

Bank USA mbouskela@iadb.org

Diana Candanedo

Coordinadora del Plan Estratégico

Nacional

Secretaría Nacional de Ciencia, Tecnología e

Innovación/SENACYT Panamá dcandanedo@senacyt.gob.pa

Martín Candanedo Vice Rector / VP

for Research Universidad Tecnológica de

Panamá Panamá martin.candanedo@utp.ac.pa

*Octavio Carrasquilla

Doctorando Tecnologías de la

Información Geográfica Universidad de Alcalá Panamá oecspty@gmail.com

*Rosana Carrizo Geógrafa Autoridad Nacional de

Administracion de Tierras Panamá rcarrizo@pronat.org.pa

Alejandro Castillero Administrador

General Autoridad Nacional de

Administracion de Tierras Panamá acastillero@pronat.org.pa

*Lynn Marie Chambonet Asesora Legal

Secretaría Nacional de Ciencia, Tecnología e

Innovación/SENACYT Panamá lchambonet@senacyt.gob.pa

*Jongham Choi Professor Western Illinois University USA j-choi1@wiu.edu

Sungjae Choo Department of

Geography Kyung Hee University South Korea sjchoo@khu.ac.kr

Cho Chun Man

Associate Research Fellow, GeoSpatial

Information Research Center

Korea Research Institute for Human Settlements South Korea hssa@krihs.re.kr

*Anthony Coia

Transportation and Logistics

Consultant Association of American

Geographers USA Anthony.Coia@verizon.net

*Carlos Contreras Gerente de SIG Autoridad del Canal de

Panamá Panamá ccontreras@pancanal.com

Carmen Córdoba Dean of

Humanities Faculty Universidad de Panamá Panamá lcordoba@cwpanama.net

*Alberto Cumbrera Especialista en SIG Instituto Conmemorativo

Gorgas Panamá albert_cum@hotmail.com

*Lucas Dawkens

Coordinador de Proyectos de Innovación Empresarial

Secretaría Nacional de Ciencia, Tecnología e

Innovación/SENACYT Panamá ldawkens@senacyt.gob.pa

*Diovelys De León Especialista en SIG Autoridad Nacional de

Administracion de Tierras Panamá ddeleon@pronat.org.pa

Clara Díaz de Sotelo Asesora Ejecutiva

Secretaría Nacional de Ciencia, Tecnología e

Innovación/SENACYT Panamá senacyt@senacyt.gob.pa

Jaime Estrella

Director de Investigación y

Desarollo

Secretaría Nacional de Ciencia, Tecnología e

Innovación/SENACYT Panamá jestrella@senacyt.gob.pa

38

Julio García Vargas Regional Officer

Estrategia Internacional para la Reducción de

Desastres (UN) Panamá juliog@eird.org

Octavio R. García Lavergne

Gerente de Proyectos de

Seguridad Ciudadana

Autoridad Nacional para la Innovación Gubernamental Panamá ogarcia@innovacion.gob.pa

Andrés Garrett Contractual Officer InterAmerican Development

Bank USA andresg@iadb.org

*Michael Goodchild

Professor of Geography,

Director of the Center for Spatial

Studies University of California,

Santa Barbara USA good@geog.ucsb.edu

*Jennifer Guralnick Risk Reduction

Advisor

Estrategia Internacional para la Reducción de

Desastres (UN) Panamá jguralnick@eird.org

Francis Harvey Chair

AAG Geographic Information Science and Systems Specialty Group USA fharvey@umn.edu

Edwin Henriquez

Ingeniero, Autoridad Nacional para la Innovación

Gubernamental

Instituto Nacional de Formación Profesional y

Capacitación para el Desarrollo Humano Panamá ehenriquez@innovacion.gob.pa

Alexander Hernández

Sub-Director de Administración y

Finanzas

Secretaría Nacional de Ciencia, Tecnología e

Innovación/SENACYT Panamá ahernandez@senacyt.gob.pa

Mark W. Horner Chair

AAG , Spatial Analysis and Modeling (SAM) Specialty

Group; Florida State University USA mhorner@fsu.edu

Hyunghwan Joo

Senior Advisor for Technology and

Innovation Education, Science

and Technology

Sustainable Development Department

Inter-American Development Bank USA-Korea hjoo@iadb.org

*Mei-Po Kwan

Distinguished Professor of Geography Ohio State University USA kwan.8@osu.edu

*Diana Laguna GIS Research

Specialist Universidad Tecnólogica de

Panamá Panamá diana.laguna@utp.ac.pa

Jongwon Lee Department of

Geography Ewha University South Korea jongwonlee@ewha.ac.kr

Ki-Suk Lee Member

National Academy of Sciences of the Republic of

Korea South Korea leekisuk@snu.ac.kr *Ciro Limone Consultant Secretaría del Metro Panamá climone@presidencia.gob.pa

*Elías López

Director of Professional GIS

Program Universidad de Panamá Panamá panamageo@yahoo.es

Merrill Lyew Latin America

Region Enviromental Systems

Research Institute (ESRI) USA mlyew@esri.com

*Candida Mannozzi

Senior Manager, Program

Development Association of American

Geographers USA cmannozzi@aag.org

Duane F. Marble Professor Emeritus

of Geography The Ohio State University USA dmarble@OregonFast.net

*Raúl Martínez Remote Sensing

Unit Autoridad del Canal de

Panamá Panamá rmartinez@pancanal.com

*Silvia de Marucci

Senior Specialist, Liquid Bulk

Segment, Office of Market Research &

Analysis Autoridad del Canal de

Panamá Panamá smarucci@pancanal.com

*Anselmo McDonald Investigador Instituto Conmemorativo

Gorgas Panamá ansemc@hotmail.com

Ricardo Mena Chief of Regional

Office

Estrategia Internacional para la Reducción de

Desastres (UN) Panamá rmena@eird.org

*Graciela Metternicht

Coordinadora Regional

División en Evaluación y Alerta Temprana, PNUMA

(UNEP) Panamá graciela.metternicht@unep.org

Edgardo Monasterio Coordinador de Secretaría Nacional de Panamá emonasterio@senacyt.gob.pa

39

Proyectos Especiales I+D

Ciencia, Tecnología e Innovación/SENACYT

*Issis Montilla Tecnica en Cartografía

Autoridad del Canal de Panamá Panamá imontilla@pancanal.com

Aida Libia Moreno de Rivera

Chief of the ISISAS Department

Instituto Conmemorativo Gorgas Panamá arivera@gorgas.gob.pa

*Ermelinda Muñoz

Especialista en Analisis de Sistemas

Autoridad del Canal de Panamá Panamá emunoz@pancanal.com

*Astrid Ng Research Assistant Association of American

Geographers Panamá ang@aag.org

Yungju Carolina Oh

Sector de Integración y

Comercio, Corea-América Latina:

Foro de Comercio e Inversión

InterAmerican Development Bank USA VPS-INT@iadb.org

Flora Montealegre Painter

Chief, Science and Technology

Division InterAmerican Development

Bank USA florap@iadb.org

*Fernando Palm Director de la UCGO-BID

Secretaría Nacional de Ciencia, Tecnología e

Innovación/SENACYT Panamá fpalm@senacyt.gob.pa

José Antonio de la Peña

Director Adjunto de

Desarrollo Científico y Académico

ICSU Latin American Region Regional Office for Latin

America and the Caribbean Mexico aic@servidor.unam.mx

Danilo Piaggesi (Former) Director,

ICT-SDS InterAmerican Development

Bank USA danilop@iadb.org

*Gustavo Quintero Representative Autoridad Nacional de

Administracion de Tierras Panamá gquintero@pronat.org.pa

Cesar Quiroga

Research Engineer, Manager,

Infrastructure Management

Program

Texas Transportation Institute, Texas A&M

University System USA c-quiroga@tamu.edu

*Douglas Richardson Executive Director Association of American

Geographers USA drichardson@aag.org

Carlos Gonzalo Rivas

Senior Advisor Education, Science

and Technology Inter American Development

Bank USA gonzalori@iadb.org

Roberto Roy Secretario Ejecutivo Secretaría del Metro Panamá roberto.roy@presidencia.gob.pa

Israel Sánchez Director Instituto Geográfico

Nacional "Tommy Guardia" Panamá direccionigntg@mop.gob.pa

Salomón Shamah Administrador

General Autoridad de Turismo Panamá gerencia@atp.gob.pa

*Darío Solís Managing Director

Georgia Tech Center for Innovation in Logistics and

Transportation Panamá dario.solis@isye.gatech.edu

*Galileo Solís Especialista BID Panamá, Sector Social Panamá galileos@iadb.org

*Patricia Solís

Director, Outreach and Strategic

Initiatives Association of American

Geographers Panamá psolis@aag.org

*Eda R. Soto

Especialista en Protección Ambiental

División de Ambiente; Departamento de Ambiente,

Agua y Energía Autoridad del Canal de

Panamá (ACP) Panamá esoto@pancanal.com

Federico José Suárez

Ministro de Obras Públicas Ministerio de Obras Públicas Panamá masolis@mop.gob.pa

*Isis Tejada Geographer Instituto Geográfico

Nacional "Tommy Guardia" Panamá isis.tejada@mop.gob.pa

*Marielena Tejeira

Coordinadora de Proyectos Especiales

SENACYT-BID

Secretaría Nacional de Ciencia, Tecnología e

Innovación/SENACYT Panamá mtejeira@senacyt.gob.pa

*Enrique Vargas F.

Coordinador CONACCP;

Profesor

Comité Nacional de Cambio Climático de Panamá;

Universidad Tecnólogica de Panamá, Universidad de

Panamá Panamá evargas_fanuco@yahoo.com

40

Francisco A. Evangelista Viera

ICT-SDS Department

Inter American Development Bank USA franciscov@iadb.org

Diego Villanueva

Director de Administración y

Finanzas

Secretaría Nacional de Ciencia, Tecnología e

Innovación/SENACYT Panamá dvillanueva@senacut.gob.pa

Raimundo Villegas Chancellor

Academia de Ciencias de América Latina, ACAL a/c

IDEA Venezuela acal@reacciun.ve

Wu-ik Yu Secretary-General International Geographical

Union South Korea yuik@snu.ac.kr

*Marcela Zeballos Research Assistant Association of American

Geographers USA mzeballos@aag.org

41

Appendix 6 Sector Example Case Study

APPENDIX 6

CASE STUDY

Transportation and Logistics: Market and Needs Analysis

for the Automotive Sector in Latin America*

*Copyright 2010 by Anthony Coia and the Association of American Geographers.

Overview Panama offers an excellent location to enhance GIS&T capacity in the transportation and logistics field. Transportation and logistics networks are critical elements in the Panamanian economy, from transporting agricultural products to markets and meeting the commuter needs of the service sector, to thoroughly integrating its intermodal transportation systems, including roads, rail, and shipping. As in all Latin American countries, development of GIS&T in Panama for transportation and logistics applications will also greatly aid opportunities for related GIS&T applications such as alternative energy development, agriculture, health, tourism, and many other areas. Furthermore, because Panama is a critical component in the intermodal transportation system within Latin America, linking South America, Mesoamerica and the rest of the world, this initial focus will benefit the region as a whole. The canal and port infrastructure, in particular, and other inter-oceanic transport systems such as rail, road and pipeline are well- developed given a long history of national and international investment. Economies of Latin America have found this transit infrastructure to be vital to their economic growth as well. For example, during the decade of the 1990s, over half of Ecuador’s trade passed through Panama, including two-thirds of all of that nation’s banana shipments. Forty percent of cargo from Peru and Chile find their way through Panama, and Colombia particularly values the waterway as transit to world trade since internal topography makes land transportation difficult. Additional plans for expansion promise to develop this infrastructure further to the benefit of the region as a whole. Although many of the individual markets in Latin America are small, collectively they hold much greater potential (economics of scale) when combined. Panama provides an opportunity to integrate these individual markets within the region.

The challenges of logistics and transportation throughout Panama and LAC region Logistics is the management of the flow of goods and services between origin and destination. This management involves the integration of multiple elements such as transportation, inventory, warehouses, material handling, packaging, and information technology. Logistics is therefore a channel of the supply chain that can create value in time and space. In emerging markets and developing countries such as those in Latin America, logistics components are often less efficient and tend to be less integrated than they are in developed countries. This often means that a single third party logistics provider (3PL) does not have the full capability or the authority to manage door-to-door transactions between Latin America and other parts of the world -- or even within Latin America. The result is added layers of bureaucracy and costs to the trading parties. Among these costs is sub-optimal visibility in the supply chain, which may lead to excess inventory or out-of-stock situations. It may also cause missed opportunities to combine freight at consolidation centers in order to reduce transportation costs. Investment in transportation and logistics assets is lower in Latin America than it would be otherwise due to economic, infrastructural, and political challenges. Consequently, buyers of goods often use purchase terms that include all logistics costs to deliver the goods to their door. Consequently, logistics costs are likely to be a higher percentage of the total value of goods transactions in Latin America than they are in the United States and Western Europe, for example.

A. Automotive Industry Logistics Overview Latin America is a growing region for both production and consumption of automotive parts and finished vehicles. In order for the region to gain and maintain global competitiveness, it will need to overcome a host of challenges involving transportation and other logistical elements. For example, although multiple transport modes are in use by the automotive sector, intermodal transportation is lacking. The development of intermodal transport is essential for optimizing logistics efficiency in Latin America. Intermodalism within the region has been hampered by government regulations or the lack thereof, a shortage of quality infrastructure, including intermodal facilities, and the need for monitoring capabilities to oversee the transfer between transport modes. Intermodal transportation, as well as warehousing, inventory management, customer service, and other logistics elements would benefit from the use of information technology such as GIS&T that can provide more accurate supply chain visibility. For example, the use of GIS&T would add a spatio-temporal component to automotive shipments that could support optimal locations and operations for intermodal facilities. The routing of carriers such as trucks and railroads would consider parameters such as traffic congestion, load factors on transporters, and departure scheduling so that intermodal transfers occur with minimal delays.

B. Industry Growth The need for value-adding technology applications such as GIS&T has become more urgent with the rise in automotive production supply and demand throughout Latin America. The trend toward volume increases -- even during the economic downturn -- highlights the need for competitive logistics systems in the region in order to facilitate domestic and international sales. Spatially oriented GIS&T can analyze and portray the highest areas of production and demand for particular automotive products relative to the available logistics infrastructure to transport those products efficiently.

1. Production by Major Countries The automotive sector is cyclical, so although growth is trending upward, the rates will vary. In 2010, Latin America’s three largest vehicle-manufacturing countries -- Brazil, Mexico, and Argentina -- all expect to surpass their 2008 production volumes. The total vehicle production of these three countries will exceed four million units in 2010. Both domestic and international demand for vehicles and parts is rebounding to pre-recession levels and beyond. Brazil’s domestic sales of new vehicles more than doubled within the past decade -- from 1,489,000 units in 2000 to 3,141,000 units in 2009. The enormous number of automotive parts comes in an extensive variety of shapes and sizes -- from small parts such as windshield wipers to the largest engines and body frames. Packaging design is a critical component of automotive parts logistics in terms of maximizing transport efficiency while minimizing damage levels. Packaging is even more important in regions with poor road conditions, since transport damage is more likely. Sales of automotive parts from Brazil, Latin America’s leading automotive manufacturer, reached more than $40 billion in 2008, before falling to $35 billion in 2009 due to the economic downturn. In 2010, automotive parts production is likely to return to at least 2008 levels among the region’s largest producers -- Brazil, Mexico, and Argentina. Latin America’s automotive rebound became evident in 2010. The upturn in volume demonstrates the need for logistics infrastructure improvements in order to minimize delays in transportation and optimize transport capacity usage.

a. Brazil As the leading automotive manufacturer in Latin America, Brazil’s automotive sector is experiencing a good level of growth from the global economic downturn. Among its automotive production, Brazil’s demand for commercial vehicles, such as buses and medium and heavy sized trucks is growing faster than is its demand for passenger vehicles. Conservative predictions are for Brazil’s commercial vehicle sector to grow by more than 50% in 2010. Specifically, predictions are for heavy commercial vehicles sales to grow by

about 56 percent. Some segments of commercial vehicles are likely to experience 100% growth, such as coach buses. Brazil was the world’s sixth largest vehicle producer in 2009 with 3,185,000 units -- directly behind Germany. South Korea produced the next highest volume at 3,513,000 units. Brazil sells most of its production domestically. Its exports accounted for 14.9% of its vehicle production in 2009. Brazil’s vehicle growth trends highlight the country’s emphasis on commercial transport development; this may indicate growing demand in sectors such as tourism. As the sector grows, GIS&T applications could be useful in optimizing air and bus scheduling and routing as well as terminal locations.

b. Mexico Mexico’s emphasis on sectors such as tourism is also increasing its demand for commercial passenger transport capacity. However, unlike Brazil, Mexico exports most of its vehicle production. In 2009, it exported 1,266,000 vehicles or 81.3% of its total vehicle production. Thus, in Mexico, the need is strong for trade-oriented logistics infrastructure such as specialized terminals for import and export vehicle processing. These types of facilities have been developing in Mexico particularly within the past decade. Mexico’s vehicle processing centers are typically links between the domestic or overseas factories and dealerships. The increasing sophistication of vehicle processing centers, which are often modeled after such facilities in the United States, is leading to the need for integrated information technology that can provide supply chain visibility and logistics alternatives for effective vehicle distribution throughout Mexico as well as internationally.

c. Argentina Initially, manufacturers built automotive plants in both Brazil and Argentina mostly for meeting domestic demand. As the global automotive industry began to gravitate toward low-cost manufacturing centers, Argentina’s vehicle sector developed became largely export-oriented. In 2009, it exported nearly 63% of its vehicle production. Although its production quantities are much lower than Brazil’s, Argentina presents a greater likelihood of further developing rail as a mode of transport for larger volumes over long distances. That would indicate growing competition with the road and ocean transport modes. As rail becomes a more significant mode, applications such as GIS&T would be useful in ascertaining the competitiveness and complementarity levels of rail with other transport modes in an intermodal or multimodal framework. One of the key origin points in Argentina is the city of Córdoba, which is located about 435 miles northwest of Buenos Aires, and is the location of vehicle assembly plants for Renault, Fiat, and Volkswagen. Another automotive production area is San Luis Province near the geographical center of the country. The city of Rosario, in Santa Fe Province, which is located about 187 miles northwest of Buenos Aires, is the location of the General Motors plant.

d. Others: Chile, Ecuador, Peru, Uruguay, Venezuela The next largest automotive flows involve Venezuela, Colombia, and Chile, all of which are small compared to the others. Venezuela produced 111,655 units in 2009; Colombia produced 28,199 units and Chile produced 15.309 units.

2. Major Suppliers General Motors was among the top producers in each of Latin America’s leading vehicle manufacturing nations. In 2009, Brazil’s three largest manufacturers are Volkswagen, Fiat, and General Motors, which combined represented nearly 69% of the country’s production. Argentina’s vehicle production was spread out more evenly over seven of its vehicle manufacturers. The three largest in 2009, were Peugeot-Citroen, General Motors, and Fiat, which accounted for 47.9 percent of the total units. In Mexico, Nissan led the industry in 2009 with 355,414 units, followed closely by General Motors with 350,555 units and Volkswagen with 320,933 units. Vehicle manufacturers are often located in the same geographic regions, known as automotive clusters. They may also be located apart from others, such as Honda Mexico in Guadalajara. Either way, logistics challenges exist in designing just-in-time production and delivery systems. Manufacturers may enhance their logistics efficiency with GIS&T, which can provide volume flow maps of their tier one suppliers to schedule production and deliveries. Tier one suppliers typically provide automotive parts, components, or sub-assemblies directly to the vehicle manufacturer. Major players in Latin America include Delphi, Visteon, Johnson Controls, Lear, and many others.

C. Latin America’s Global Interface

1. Trade Flows

The globalization of the automotive sector over the past two decades and the rise of the world’s four largest emerging markets -- Brazil, Russia, India, and China -- known as the BRIC countries -- have shifted the traditional logistics flows away from the Japan and Korea- Western Europe-North America lanes and toward emerging markets. Thus, the need for transportation capacity to serve the BRIC countries has been of particular concern for the world’s major ocean car carriers, which are also known as Roll On-Roll Off (RoRo) carriers for the types of vessels that are typically used to transport finished vehicles. Trade between vehicle producing nations and emerging markets has been on the rise for a number of years. In Latin America, the economic downturn led to a shift in Brazil’s vehicle exports from northern Europe to South Africa -- thus changing vessel routing requirements and the need for RoRo carrier resources. According to the Brazilian Automotive Industry Yearbook 2010, Brazil’s total worldwide exports in vehicles and parts grew from $7,536 million in 2000 to $20,773 million in 2008. On the import side, Brazil nearly tripled its vehicle imports from $6,442 million in 2000 to $20,462 million in 2008. Due to the economic downturn, in 2009, Brazil’s exports declined by almost 43% compared to 2008 figures, and its imports declined by more than 19%. Changes in volume

and direction of inter-continental trade flows is characteristic of the automotive sector. What is essential to ocean carriers and vehicle manufacturers alike is the need to accurately forecast demand and capacity in order to provide the most economic and timely services. The use of GIS&T may be a valuable tool in visualizing the automotive supply chain in order allocate carrier resources. GIS&T is also useful for assessing the distribution landscape. For example, India’s Tata Motors is investing in Brazil in order to accommodate local market growth. India is looking for local distribution partners and companies with manufacturing facilities in Brazil. The rate of vehicle ownership is low in Brazil, so the potential is great. The middle class purchasing power is growing. GIS&T may be used to highlight areas of potential demand and possible locations for factories as well as inland and port distribution facilities. Negotiations for a free trade agreement among Brazil, India, and South Africa are also underway, although it will likely be at least 2012 before it comes to fruition.

2. Imports Argentina is the largest vehicle importer in Latin America with 430,000 units in 2009. Brazil was second largest with 375,000 units. Brazil’s proportionally lower demand for imports is due mainly to its high tax rate that averages 35% plus VAT on new vehicle imports. Whereas Brazil’s second largest import vendor in 2008 was Mexico, South Korea took over that position in 2009. Brazil sold more than 98,000 import units from South Korea compared to about 58,000 units from Mexico. This is due to Mexico’s stronger orientation toward North American demand, which provided an opening for South Korea, a relatively low-cost producer with an established logistics network in place. Brazil’s vehicle trade with the United States has shown an upward trend during the past decade with the exception of 2009. Vehicle imports from the United States reached a peak of $115.4 million in 2008 -- more than double the 2007 figure. Optimizing logistics efficiency for vehicle imports requires vehicle-processing terminals, the location of which is vital to providing high quality services to automotive dealerships. Vehicle processing terminals may be located at seaports or inland. A key factor in the location is the access to inland distribution infrastructure. Vehicle processing centers have taken hold in some parts of Latin America more than they have in others.

3. Exports Connectivity to ports or land border crossings is also essential for export logistics optimization. Mexico was the world’s seventh largest exporter of new vehicles in 2009 and the largest exporter in Latin America with 1.266 million units. This figure was down from a peak of nearly 1.7 million export units in 2008. Brazil was the world’s twelfth largest exporter of new vehicles in 2009 with 475,325 units. As it changes its protectionist trade policies, Brazil wants to open its doors and diversify its

export matrix. Its exports used to be destined primarily for Mercosur -- the trading bloc that includes Brazil, Argentina, Uruguay, and Paraguay -- and Europe. Later, it entered into agreements with Mexico, the BRIC countries, South Africa, as well as the European Union. Mercosur signed an agreement with the Southern Africa Customs Union (SACU) in June 2009. Trade agreements are currently in place in Mercosur and the European Union (EU); now the EU is trying to reach its own agreement with Brazil. In addition to its most significant customers -- Argentina and Mexico -- Brazil’s vehicle exports to the European Union showed a sharp rise from nearly $900 million in 2007 to $1,257 million in 2008, followed by a decline to $724 million in 2009. Brazil sold more than 10% of its exports to South Africa in 2009, making it Brazil‘s third-largest export partner. It exported $396.4 million of vehicles and parts in 2007 to South Africa and $325.3 million in 2008. Brazil’s largest customer in Europe and its fourth largest in the world is still Germany -- to which it shipped 4.4% of its exports in 2009. Brazil’s largest vehicle exporter is Volkswagen, which shipped nearly 211,000 units in 2009. Ford, General Motors, and Fiat were Brazil’s next largest vehicle exporters respectively-- ranging from 45,000 to 56,000 units.

D. Intra-Latin American Trade Automotive trade within Latin America is growing in significance. During the past five years, Brazil’s trade has thrived with key partners within Latin America. Its largest export region for new vehicles remains Latin America and the Caribbean, where it reached a peak in 2008 of 545,632 units before declining to 361,429 last year. Within the region, its automotive trade with Argentina showed exponential growth from 2006 to 2008. Its vehicle exports to Argentina during these years rose from $680 million to $2,235 million. From Brazil to Argentina, finished vehicles and automotive parts move mostly by road, although a small percentage moves by water. However, between the markets of Santos, Brazil and Buenos Aires, Argentina, most finished vehicles and automotive parts move by sea. Brazil borders all South American countries except two -- Chile and Ecuador. Thus, Brazil’s vehicle exports to Paraguay and other neighboring countries may use truck transportation. For example, from the city of Manaus, in northern Brazil, automotive suppliers ship by truck to serve Colombia. For parts imports to Brazil, ocean is the primary mode of transport for nearly 44% of the shipments’ FOB value. Brazil’s fourth largest parts vendor is Argentina, from which it imported more than 11% of its total imports in 2009. Mercosur member Uruguay imports most of its vehicles from Brazil and Argentina. Uruguay received 1.9% of Brazil’s vehicle exports in 2009, which made it Brazil’s sixth largest export customer worldwide and its second largest in South America. Uruguay was Argentina’s third largest export customer in 2009, receiving 1.7% of its vehicle exports, following Brazil (88.4%) and Mexico (5.4%).

For the past several years, Brazil’s largest import trading partner by far was Argentina, from which it imported more than 218,000 vehicles in 2008 and nearly 269,000 in 2009 -- an increase in volume despite the downturn. Brazil’s vehicle imports from Argentina grew from $427 million in 2003 to $3,735 million in 2009. Its wholesale units imported from Argentina grew from 39,630 in 2003 to 268,872 in 2009. Brazil’s second-largest export customer was Mexico, to which it shipped 96,847 units in 2008 and 57,061 units in 2009. Whereas most of Brazil’s exports were to South America, it also shipped to more than twenty countries and territories in Central America and the Caribbean. The growing importance of intra-Latin America automotive trade has created demand for greater supply chain visibility, which can ameliorate the disadvantages of slow transport connections. Software such as Transportation Management Systems (TMS) and Warehouse Management Systems (WMS) is available, but may not provide a broad enough view of logistics requirements.

E. Case Study-- Developing a Logistics Network Manufacturer Honda Amazonas Motorcycle, based in Manaus, northeastern Brazil, faces challenges and opportunities in optimizing its logistics system. Its 3PL provider, BMS Logistica, manages factory to dealer services for motorcycles and spare parts to 200 dealers in Brazil. Honda loads trailers at its Manaus plant, and then drays them to the Port of Manaus on the Amazon River. From there the trailers move by water to the Port of Belem -- a distance of about 1,500 kilometers. At that point, BMS Logistica trucks the trailers to its four warehouses that are located in northern and northeastern Brazil. Although one of its warehouses is in Belem, the transport distance may be as much as 2,000 kilometers. BMS Logistica established its most recent warehouse in January 2009 in Joao Pessoa in northeast Brazil. From its warehouses, BMS Logistics serves Honda dealerships in northern and northeastern Brazil by road. A number of routes are available, although many are of poor quality. Another logistics challenge is that Honda ships high volumes daily with long lead-times. This is because although some areas show a high degree of consumption, poor inland cities receive low volumes, which tend to take longer to deliver due to the practice of shipment deconsolidation and reloading. For Honda Amazonas, the objective is to find the best routes to maintain a consistent delivery frequency and guaranteed delivery day. For example, during the rainy period, roads in the Amazon become unusable, so they are not a year-round option. For BMS Logistica, the issue is one of productivity and process optimization. Logistics efficiency improvements include optimizing capacity and using bigger trucks. At present, its logistics system is a combination of manual and electronic processes. The manual processes are commissioning the cargo loads and routing the shipments. Since March 2010, BMS Logistica has been implementing an automated system that it plans to roll out in the first half of 2011. Its aim is to achieve total electronic management. In addition to providing a stronger, more secure process to reduce loading errors, the new system will enable

efficiency gains through cargo optimization, manual control elimination, increased velocity, and lower damage rates. Among BMS Logistica’s challenges is to develop an alternative transport network from Manaus to the dealerships. It is investigating the use of short sea vessels to sail from Manaus to a seaport on the Brazil’s coast. The port would be located between five and fifty kilometers from BMS Logistica’s warehouses. It could then ship by ocean along the Brazilian coast. The tradeoff would be costs that are lower than truck transportation, but with longer lead-times. Another challenge is to reduce empty kilometers on trucks for the return trips from the dealerships to the warehouses.

F. Main Infrastructure Latin America’s automotive trade utilizes primarily the water and road modes of transportation, although the percentage use of different modes varies throughout the region. Brazil anticipates high economic growth rates in 2010, 2011, and 2012. With the World Cup scheduled to take place there in 2014 and the Olympics in 2016, the country plans improvements in transportation and logistics infrastructure. Brazil’s program for investment in infrastructure includes its Growth Acceleration Program, which began in 2007. By 2010, it had not reached its goal, and the program was extended the program to 2014. In order to increase its competitiveness, Brazil plans to change its transportation matrix by 2025. Its transportation infrastructure is largely government-operated, which typically makes it more expensive. Regulations are changing to enable private companies to become more involved in infrastructure operations; at least one major road is currently under concession. Chile is a model for public-private partnerships that began fifteen years ago. Argentina followed beginning in this decade and Brazil is now opening to private investment. Analysts predict that the effect will likely be evident within three to five years.

1. Road Network

a. Costs and Quality Within North America, automotive parts shipments between the United States and Canada and Mexico typically move by road or rail. By contrast, automotive parts that flow within South America -- such as between Argentina and Brazil -- typically move by road. Between Argentina and Brazil, multiple routes may be used, that include transit through Uruguay or directly to Brazil. Whereas the advantages of road transport are its direct connections to all points in the automotive logistics network, the quality and congestion of roads, and the long distances throughout the network demand changes in order to improve competitiveness. As a means of reducing traffic congestion as well as carbon emissions, Brazil wants to reduce its percentage of freight that moves by truck by the year 2025.

Tier one supplier Behr America, Inc. is improving its road transport efficiency by shipping consolidated loads to its plant in Ramos Arizpe, Mexico mostly from the U.S. and Canada in a shared milkrun network. It tries to localize its inventory close to Mexico through its warehouse facility in Laredo, Texas. Behr America ships consolidated full truckloads (FTL) and some less than truckload (LTL) parts to Laredo. The return loads from Mexico contains finished goods that are destined to Dayton, Ohio, where Behr America also operates a plant. It is trying to build synergies with Mexico inbound by shipping five to eight loads north to Dayton per week. Consolidations from Laredo to Ramos Arizpe follow a pull signal from Behr’s plant for which it uses daily shuttles to travel the 200-mile distance. The quality of road infrastructure varies widely across Latin America. For example, in Rio de Janeiro, in southeastern Brazil, although the quality of the roads is good within the metropolitan area, just outside of the region it is poor. This is a challenge for automotive manufacturers since the risk of damage is higher on substandard roads. In Brazil and other countries in the region, domestic parts suppliers are typically located next to their customers’ plants because of transportation difficulties. In order to minimize damage rates, packaging requirements are more stringent in emerging market regions such as Latin America, which leads to higher logistics costs. Among these costs, sub-optimal packaging may reduce the loading capacities of transport vehicles.

2. Ports and Water Transport

a. Panama Hub Automotive parts that move between Central America and South America and other continents typically move by ocean container. Finished vehicles may also move by ocean container, but the majority move by RoRo carrier. For automotive shipments, the primary transshipment hub in Latin America is Panama. Automotive 3PL provider Wallenius Wilhelmsen Logistics offers three sailings per month via Panama to and from the main ports in Latin America. WWL uses Manzanillo International Terminal (MIT) at the Port of Manzanillo on Panama’s Atlantic coast as its hub port for serving South America. Panama is WWL’s location for storing and distributing cars and other RoRo cargo such as construction machinery and agricultural equipment. The Port of Manzanillo is also the primary link between Latin America and WWL’s global trading network, which includes more than 115 routes. With its location adjacent to the Colon Free Zone (CFZ), the largest free trade zone in the Americas, MIT is the only terminal in Panama that provides a direct link from CFZ to the Western Hemisphere and beyond. In-bond transfers streamline delivery from the Port to CFZ, which reduces truckers’ turnaround times and the costs to shippers and carriers. MIT will undergo expansion during the next few years, which should enable as many as three vessels to call at the terminal simultaneously.

b. Latin American Routing Finished vehicle trade to and from all continents pass through the Port of Manzanillo. For its North America -- South America trade, WWL calls at Galveston, Texas, Veracruz, Mexico, Manzanillo, Panama, Cartagena Colombia and Puerto Cabello, Venezuela. It then travels south along Brazil’s east coast to the ports of Vittoria, Santos, Paranagua, and Rio Grande, followed by Zarate, Argentina. WWL’s hub at the Port of Manzanillo also serves Caribbean Sea countries and Central America by short sea vessel. The primary ports for vehicles and automotive parts are Santos and Paranagua in Brazil, and Zarate and Buenos Aires, Argentina. From its plant in Sao Paulo, Brazil, Behr America ships mainly by ocean FCL to Saltillo, Mexico (where General Motors and Chrysler plants are located) and to its plant in Dayton, Ohio. Its mains challenges are congestion at the Port of Santos. Brazilian ports were dredged in 2010 with the goal of increasing berthing spots. However, it was done during the peak produce shipping season, which created further delays. In addition to international shipments, some countries also ship domestically by ocean. For example, Argentina uses ocean vessels to transport finished vehicles from the south of the country to the center. Ocean is generally considered the lowest cost transport mode and the slowest. This is not always the case, especially for short sea shipments.

c. Port Challenges WWL’s largest and fastest growing ports for vehicle imports and exports are Zarate, Argentina and Santos, Brazil. The Port of Santos’ vehicle handling capacity is 100,000 units per year, and the Port is planning to expand its capacity to 350,000 vehicles per year. However, the main challenge at most of the Latin America’s ports is the lack of infrastructure. For the most part, the problem is the same -- very limited numbers of terminals for which to operate RoRo vessels. This situation creates bottlenecks that cause significant delays; sometimes vessels must wait four to five days to begin working at a port. Between the two largest vehicle ports in South America, the main difference is that the Port of Santos does not offer an automobile terminal with infrastructure to handle this segment. All of the terminals at the Port of Santos were designed to handle containers, and the port adapted them to receive automobiles and high and heavy machinery. By contrast, the Port of Zarate offers an automobile terminal called ATZ that specializes in vehicles. The problem is that it is currently struggling due to its high volumes. In addition to its seaports, Brazil also has an underdeveloped inland waterway network, which shippers could use to transport automotive components as well as finished vehicles. An example is Honda Amazonas Motorcycle, that ships from Brazil’s interior to the coast by inland waterway.

d. Port Solutions In Mexico, the Port of Veracruz, located on the Gulf of Mexico, handled the largest volume by far of vehicle exports in 2009 with 248,511 units. On the import side, Veracruz was the largest vehicle port in 2009 with 91,580 units. The main problems with Veracruz are its congestion, industrial environment, and the associated pollution. General Motors had been using the Port of Veracruz since 2007 in order to integrate its vehicle imports and exports. However, in June 2009, it switched to the Port of Altamira, an inland port on the Gulf of Mexico. The reasons include the proximity of General Motors’ plants in Ramos Arizpe and San Luis Potosi to the port and the ability to use railway transport from Ramos Arizpe to the Port of Altamira. Thirdly, Altamira is further inland, and does not experience the high winds that cause damage to vehicles from ocean spray. Within the past two years, the Port of Altamira recovered export volumes for General Motors, Ford, and Chrysler. In 2009, it handled 18,239 vehicles and in 2010 through October, the total was nearly double at 35,297 units. Predictions for 2010 are for nearly 40,000 units. The growing Port of Lazaro Cardenas was second largest with 41,843 units in. The port has undergone significant improvement within the past several years to dominate as Mexico’s Pacific Ocean vehicle port. It is the fastest growing vehicle port in Mexico. In 2010, AMPORTS Mexico predicts that Lazaro Cardenas will handle 90,000 to 95,000 units.

4. Airports Automotive parts move by all modes of transportation, including air, which is typically used to expedite parts in order to avoid a production shutdown or to fulfill service parts orders. Due to its high relative cost, automotive shippers typically strive to minimize their use of airfreight. Air shipments are typically handled by courier services, such and FedEx and UPS and time-critical 3PL providers that provide expedited transportation, logistics, or both. In Latin America, the major airports for automotive parts include Rio de Janeiro, Buenos Aires, and Mexico City.

5. Rail A transport mode with perhaps the most potential in Latin America in automotive logistics is rail. Brazil uses its railroad infrastructure primarily for its mining and oil industries, which the respective companies own and operate. The government has not been investing in rail infrastructure. However, Brazil’s plan for 2025 includes significant development of its railway infrastructure. Currently, Brazilian vehicle manufacturers use rail to a limited extent to transport automotive parts. For example, the Mercedes-Benz plant in Juiz de Fora, which is approximately 180 kilometers from the Port of Rio de Janeiro, uses both rail and road for its parts imports. Its choice of primary transport mode depends on costs. Limited railway capacity is part of the price issue, since the equipment belongs to the mining companies. The Brazilian government believes that it would be beneficial to use rail in order to move finished vehicles. It is likely to ask the

mining companies to open their transportation infrastructure. Brazil’s leading rail transportation providers are also 3PL providers, which offer opportunities to optimize logistics efficiency. Among them is America Latina Logistica (ALL), a Brazilian holding company that provides logistics services and operates railway lines in Brazil and Argentina. MRS Logistica is one of the largest railway companies in Brazil. It runs the Southeastern Federal Railroad Network and provides logistics services. Additionally, Vale is the world’s second-largest mining company and one of Brazil’s largest logistics operators. Overall, Argentina’s rail system is more developed than is Brazil’s rail system. Although it uses its railways mainly for agricultural logistics, such as soybean transportation, Argentina also uses rail to transport automotive freight, as does Chile and Mexico. Chile initially developed its railway network in order to serve its mining industry. More recently, Chile’s automotive sector has developed to the extent to which rail is a viable transport mode.

6. Multimodal Other than using a single transport mode to move finished vehicles or automotive parts from origin to destination, the use of more than one mode may be beneficial in order to improve logistics efficiency. For example, the Brazilian government wants to develop multimodal systems. A regional body known as the Latin America Logistics Association is developing multimodal transportation. However, developing multimodal transport networks is a challenge in South America due to physical barriers such as the Andean region. Rather than develop cross-border multimodal networks, the Association views it as more feasible that each country would develop its own multimodal network.

7. Distribution Centers One of key nodes in the vehicle supply chain offers intermodal transport access is the port processing center. For finished vehicles, services such as pre-delivery inspection, accessorization, staging and loading to another transport mode takes place. In Mexico, these facilities have been growing in significance during the past decade. For example, port processor AMPORTS Mexico operates at a number of locations, including the Port of Altamira on the Gulf of Mexico, and the ports of Mazatlan and Lazaro Cardenas on the Pacific Ocean. In addition, it operates inland facilities near Mexico City at Toluca, and at Santiago Tianguistenco, for the Freightliner plant. In Mexico, the use of rail to ship finished vehicles is growing; in the past, shippers used truck transportation to a greater degree. Previously, manufacturers used rail for international moves between Mexico, the U.S., and Canada, but not for moves to seaports. Now, they use rail to ship to and from ports as Mexico’s international markets diversify. For AMPORTS Mexico, the main challenges are the lack of adequate highway and railway connections. For example, rail transport is not available between the plant location at San Luis

Potosi and the Port of Altamira because rail cannot handle double stack trains due to low bridge height. Railway provider Kansas City Southern, whose network covers Central Mexico, has invested in infrastructure from Mexico City to the Port of Lazaro Cardenas, but not from Mexico City to the Port of Altamira, which imposes some limitations on the latter. At the Port of Lazaro Cardenas and elsewhere, railcar availability is also a challenge due to growing demand. Previously, one vehicle manufacturer shipped by rail from the Port of Lazaro Cardenas; now it is three or four. Rail equipment comes from the same international pool as for U.S. and Canadian users, which is owned by TTX Company. Under the agreement, shippers use these multilevel railcars for shipments to and from Mexico, but not for domestic moves. In addition to their supplies of pooled railcars, Mexican railroads own their own equipment, which is also in short supply at times. If investing in a port, terminal providers need to offer inland rail transportation, which accounts for the growth of the Port of Lazaro Cardenas. AMPORTS Mexico developed a facility in Lazaro Cardenas to accessorize vehicles from the port and ship customer-ready vehicles to the dealerships, which reduces preparation time, ensures quality parts installation at one place, and saves money by eliminating separate accessory distribution to the entire dealership network.

G. Information Technology As the automotive sector expands in Latin America, one of the key elements of logistics infrastructure is value-adding information technology. For example, since November 2009, AMPORTS Mexico has been providing door-to-door truck distribution for Daimler’s production of Freightliner trucks -- either to the dealership or to the port of exit. It achieves this through collaboration with strategic partners and by using information technology systems to integrate them into its network. One of the main purposes of information technology in an automotive logistics network is to increase the level of automation. AMPORTS Mexico’s systems support management of shipments, carriers, and financial transactions. A multi-yard management system minimizes inter-yard movements, performs equipment and load tracking, and automates carrier bill payment. AMPORTS Mexico developed its information technology architecture in-house. Its data collection solution uses high visibility WiFi, GPRS, and RF hand held scanners. It also relies on Electronic Data Interchange (EDI) for collecting and communicating inbound and outbound data with customers. Its Vehicle Identification Number (VIN) status and tracking application enables customers to better track and control their vehicles. AMPORTS Mexico offers integration with wireless data collection systems and adaptability to Web-based customer interfaces. Despite the availability of information networks such as AMPORTS Mexico’s, information technology may be limited to EDI at some of the terminals in Latin America. Yet, within the past year, WWL began to offer all of its logistics products to its customers in South America. For vehicle exports from Brazil, WWL offers supply chain management from the factory to the port

of discharge, including the inland transportation, technical services such as cargo loading, and ocean transportation. Effective information technology is necessary for these processes to function effectively individually and as a group. Yet although I.T. systems’ such as AMPORTS Mexico’s and WWL’s work, there is still a need for greater visibility as the network expands or for intermodal transfers. GIS&T may provide the necessary geographic and supply chain data that would increase the visibility level and thus offer opportunities to improve logistics efficiency. A problem is that the current tracking technology lacks enough sophistication to deal with customer service issues and other logistics challenges faced by the automotive sector. Only one or two companies use GIS for finished vehicle transportation, according to Ingenieros Consultores Asociados, a consulting firm based in Montevideo, Uruguay. In Brazil and other countries, the trucking sector uses GIS in order to calculate transportation rates that correspond to geographic zones.

1. Network Planning In order to optimize the planning of a distribution network using road transportation, one could develop a road network for which the model would take into account maximum speeds, legal weight, and traffic restrictions for trucks. The database could be road maps that depict different road categories. Shippers could install GPS equipment on trucks in order to monitor the distance and flows between two points such as the parts supplier’s plant and the vehicle assembly plant. Calculations of the average speed based on each road category could be refined. Then, one could create a network dataset for use in a type of routing software. Parameters that may be included are time windows for delivery or pick up hours at origin and destination, capacities of the available trucks, and fleet type, which would describe the different types of vehicles that may be used and their capacities. [expand discussion]

H. Logistics Challenges In Latin America, the primary challenge for optimizing automotive logistics efficiency is to reduce costs while improving customer service levels. This challenge involves all of the logistics elements, including the main ones that follow.

1. Transportation For distributing finished vehicles, traffic congestion is heavy across the Latin America region, especially in Argentina and Brazil. For example, congestion at the Port of Santos is quite high, which leads to a negative impact on logistics and supply chain efficiency.

One logistics requirement for the automotive sector is to identify points of heavy congestion so that routes or scheduling may be changed. Automotive production that operates on just-in-time delivery of parts or components depends on a reliable logistics network. Unidentified bottlenecks may jeopardize just-in-time production to the point of shutting it down temporarily, which is costly for the manufacturer. Among the main objectives of tier one part suppliers and other supply chain parties is to reduce expenses without sacrificing freight performance. One of the main challenges to providing more efficient vehicle distribution is price. In Latin America, only a few companies provide finished vehicles logistics services, so the demand is strong. Cost challenges are a significant issue in all modes of transportation. For example, tier one supplier Key Safety Systems (KSS) ships from Mexico to Europe. Previously, it sent shipments separately from its plants in Juarez and Valle Hermoso -- near Matamoras in northeast Mexico. It was shipping at one to two week intervals. This meant that KSS shipped some parts early, which increased inventory levels. Since May 2010, it has been shipping products from the Juarez plant to the Valle Hermoso plant for consolidation. Now it ships at one-half week to one-week intervals. Containers are loaded to the maximum cubic capacity. Thus, it is shipping less material from each plant at intervals that are more frequent. This practice has reduced ocean freight costs for KSS. The main issue is how to better utilize transportation assets -- i.e. carrier fleets. The solution to such a transport optimization problem may involve combining an optimization algorithm with the visualization tools of GIS&T. Another reality of vehicle distribution is that some trucking companies may not cross international borders, which causes delays -- namely the time required for switching transport equipment. Among the challenges to logistics efficiency is the overall poor quality of road infrastructure, Sub-optimal roads lead to a higher rate of damaged parts, and subsequently the need to maintain higher inventory levels, transportation, and packaging costs. In Mexico, there are few major highways. Its highways are narrow and there is a need for three lanes instead of two in many areas. Its transportation network is fragmented in that many smaller local trucking companies exist as opposed to large pan-regional companies. The need to reduce carbon dioxide emissions is also a challenge to optimizing logistics efficiency. This growing concern worldwide has an effect on the mode of transport used. Typically, road transportation is responsible for the highest volume of carbon dioxide emissions. However, switching transportation modes in Latin America may not be as feasible of an option as it is in developed regions, where it also a challenge.

2. Warehousing For the warehousing component of logistics, the main issues concern facility location, picking and packing parts, and scheduling inbound and outbound flow. For a number of logistics issues, automotive shippers could use GIS&T as a tool in decision-making and analysis. One of the greatest potentials for GIS&T is in the location of depots in which distance from suppliers and

customers, transport options, and the facility’s functions are factors.

3. Inventory Management A key objective of tier one part suppliers and other supply chain parties is to reduce expenses without damaging their inventory position. For example, one could minimize inventory, but also drive up freight costs. Among the goals of tier one suppliers such as Key Safety Systems, which operates in Mexico and throughout North America, is to improve inventory turns. By reducing inventory, it is also minimizing its impact on Key Safety System’s working capital for growth.

4. Customer Service Level Technology investment is also a challenge due to the overall economic situation. Yet, for logistics services, it is one of the key requirements for competitiveness. Customs inefficiency is continues to challenge for Latin America’s automotive sector. For vehicle manufacturers that are practicing “just-in-time” production, this makes it more difficult to predict exactly when automotive parts or modules will arrive. For example, in Uruguay, customs bureaucracy causes congestion for automotive logistics. Approximately 15 percent of (all) containers must stop for inspection or security reasons, whereas in other countries, the figure is closer to five percent. Automotive shippers may use GIS&T in order to reduce customs delays. For example, they use tracking technology such as GPS to determine a vehicle’s location with respect to a border crossing. The system may provide an alternate crossing or estimate the delay involved in order to notify the customer. Along with most Latin American countries, Brazil and Argentina are not yet using GIS&T to improve their logistics efficiency. For the automotive sector, as well as other industries, there is a need to overcome the perception of a limited use for GIS&T. An example is the belief that the purpose of GIS is only to enhance security by monitoring a truck‘s location.

5. Reverse Logistics and Recycling Whereas the forward movement of new automotive parts and finished vehicles to the end customers is considered the primary logistics flow, recycling end of life vehicles is a channel of the automotive supply chain that offers tremendous growth potential in Latin America. Recycling typically entails reverse logistics, which is essentially the opposite of forward logistics in that the main component is the collection of used products rather than the distribution of new ones. Recyclable parts include tires, batteries, glass, seats, steel body frames, etc. Automotive recycling is not only a viable economic activity; it is a positive step toward environmental preservation. Automotive recycling is a nascent industry in Brazil and in other countries in the region. For example, estimates are that of the total number of broken windshields per year in Brazil -- 1.5 million pieces -- only 5% are recycled. This provides opportunities to use applications such as GIS&T to visualize parameters such as collection areas, potential volumes, and transportation

requirements in order to achieve optimum logistics efficiency. One of the problems is the lack of government support for organized automotive recycling. Weak or non-existent legislation governs the automotive recycling industry, which is prevalent not only in Brazil, but in many emerging markets. In Brazil, no legislation yet exists that governs automotive recycling. Similarly, major vehicle manufacturers do not have plans in place for their end of life vehicles. A vehicle’s lifecycle in Brazil is typically 10 to 15 years, which is much longer than in developed markets. End of life vehicles typically end up in junkyards or elsewhere for disassembly; the process is highly informal.

a. Steel Recycling In terms of volume, the most significant commodity to recycle is steel that is used for various parts of the automobile, including the body frame, engine, etc. GKN Brazil, a producer of driveline components did a study to find out how to reclaim its end of life products. It worked with automotive assembly plants in Brazil to devise a reverse logistics process, and developed relationships with plants that dismantle vehicles to acquire products that could be remanufactured. Those that could not would be sold as scrap to raw material manufacturers. Such scrap companies are located in São Paulo or Rio de Janeiro, as well as non-urban areas. The disassembly process occurs at each supplier in the reverse supply chain, which maintains supplies of used and end-of-life drive shafts of each model. The reverse flow of parts is multi-faceted since only the core metal parts are accepted. The process is sub-optimal to the extent that the volume, package or inspection of these parts are not the same for each provider.

b. Glass Recycling Although automotive recycling overall is still in its early stages, it is moving forward. For example, a network involving reverse logistics for automotive glass began in 2005 with a major automotive glass manufacturer in Brazil. Autoglass Espirito Santo, which operates 25 plants and more than 700 service shops, collects replacement glass and forwards it for recycling. Its operations take place more three thousand miles from the final destination for the glass product. Autoglass uses Clear Glass Company, which is a logistics unit of Massfix Trade Scrap Glass in Guarulhos, Sao Paulo state. Massfix also handles glass for bottled beer manufacturers. The glass recycling industry gained strength with the opening of a recycling plant in Rio de Janeiro. This unit will facilitate the process of reverse logistics for Autoglass, depending on the shipper’s location. Locating recycling plants in large urban waste generators facilitates the reverse logistics process. Since glass is a material that has low value compared to its logistics cost, it is often difficult to collect over long distances. The new recycling branch will reduce the cost of receiving materials from the states of Rio de Janeiro, Espirito Santo, Bahia, and Minas Gerais, which will increase the volume of recycled automotive glass.

c. Battery Recycling

In the state of Sao Paulo, Brazil, battery companies practice reverse logistics due to the need to preserve lead -- the raw material. Data show that 79% of the average monthly production is returned for production, which, although this is average for Brazil, it is much lower than in developed countries such as the United States.

d. Plastics Recycling

Some companies, such as Tecno Recycling of Campina Grande do Sul, in Brazil’s southeastern Parana state, specialize in particular segments of automotive recycling. It handles the recycling of new automotive parts that do not meet production standards, such as bumpers, or interior door panels that do not fit the vehicle. Parts suppliers hire carriers to deliver approximately 80% of shipments to Tecno Recycling‘s facility, and Tecno Recycling picks up 20 percent. The delivery radius is approximately 50 miles. As automotive recycling in Brazil becomes more formalized, the need to structuralize the reverse logistics process will increase in importance. Information technology applications such as GIS&T are also valuable for optimizing parameters such as routes, facility locations, and shipping dimensions of the parts to be recycled. The latter is particularly important for maximizing the load factors of transport vehicles. This need will likely become even more important given the recent announcement by Hyundai Motor Company that it will construct a new $600 million dollar automobile production plant in the state of Sao Paulo, Brazil. Hyundai Director Kim Ki-tae noted that, “Without a local plant, we reached a market share of 3% in 2010. The plan is to reach 10% of the market by 2013, with our own plant.” (Wall Street Journal, February 28, 2011, p. B3).

APPENDIX 6

CASE STUDY

Transportation and Logistics: Market and Needs Analysis

for the Automotive Sector in Latin America*

*Copyright 2010 by Anthony Coia and the Association of American Geographers.

Supporting Documentation

Honda de Mexico

Emerging economies face a number of challenges in implementing efficient logistics networks. Logistics infrastructure, such as transportation and warehousing, tends to be less developed in and this can contribute to higher costs.

Mexican vehicle manufacturers are focusing on minimising infrastructure deficiencies by improving intermodal channels with the United States and other countries, and by integrating these with their domestic supply base. One manufacturer that has risen to the challenge is Honda de Mexico (HDM) which, by streamlining its logistics network, has secured a foothold in a growing automotive sector.

HDM, based in El Salto near Guadalajara, Mexico’s second largest city, sources about 30 per cent of its production parts domestically, 63 per cent from the United States, and seven per cent from Japan. It receives all its imported parts as CKD shipments. Ninety per cent of these arrive by rail from the United States.

These are consolidated at origin by logistics service provider TNT Logistics and by International and Domestic Parts Supply (IDPS), the division of Honda that handles purchasing and coordination of suppliers for all Honda groups. From consolidation points in the Midwest, Union Pacific Distribution Services (UPDS), a subsidiary of Union Pacific Railroad, coordinates delivery to the El Salto facility. HDM ships 10 per cent of its parts from Japan to the west coast port of Manzanillo using container ship carriers Hapag Lloyd and APL, and by truck to El Salto.

Rafael Navarro, Director – Logistics and Customs, says that two units within HDM control its inbound material sourcing: HDM’s material service department controls inbound material sourcing from IDPS and also handles sourcing from domestic suppliers; and the purchasing department administers its US direct purchasing programme.

From a consolidation centre in Chicago, TNT Logistics is responsible for coordinating milk runs with Midwest parts suppliers, container loading, issuing shipping documents, and providing visibility on HDM’s orders.

HDM tends to use direct purchasing tends for major parts and fast-moving parts.

Storage requirements determine sourcingHDM takes storage requirements into consideration in determining how it sources, which depends on such things

Automotive LogiSticS • January/February 2007 32

Honda Mexico explores intermodal optionsHonda Mexico is improving the efficiency of its logistics network by developing intermodal corridors and by reinforcing regional ties within North America. Anthony coia talks to Rafael Navarro

Rafael Navarro, Director of Logistics and customs, says Honda de Mexico uses two internal units to control inbound material to the plant

33

Honda de Mexico

as dimensions and load size. “We are moving toward direct purchasing because of the cost advantages it holds. Other manufacturers have higher production than HDM, which is why we cannot buy directly for most parts. However, it will be easier to do this when we increase our production because we would be able to buy in larger quantities,” Navarro explains.

HDM’s production target is 50,000 for model year 2008, an increase of 66 per cent from its capacity of 30,000 now. Its production figures have averaged between 22,000 and 24,000 units annually.

Last April, HDM entered into a business relationship with UPDS, the main responsibilities of which are to coordinate intermodal transportation and provide shipment visibility for TNT Logistics and HDM, including the location of parts in real-time. UPDS uses Union Pacific Railroad from Chicago to the US border at Laredo, Texas and Kansas City Southern de Mexico, (KCSM) from the border to San Luis Potosi, which is located about 320km from Guadalajara.

the inbound patternFrom San Luis Potosi, trucks deliver the containers to El Salto. Containers handled by IDPS arrive directly at HDM’s facility. IDPS unloads these and handles the sequencing, preparing lots to feed the assembly line. Domestic suppliers

also deliver directly to the plant. The main carriers are Transportes Unidos Mexicanos, WTC, and Con-way. For direct purchase containers, TNT Logistics operates a distribution centre in El Salto, and provides inbound parts sequencing and drayage to the HDM plant from there. HDM’s material service and purchasing departments work together to ensure the most efficient handling of inbound materials.

HDM’s goal for optimising inbound logistics efficiency is to guarantee transportation for Honda’s operations through worldwide contracts with carriers. Its strategy is to promote a global vision that also supports local suppliers in Mexico. As most of the impact on production costs is logistics, HDM wants to increase the number of local vendors. “Continuing to develop local procurement is essential. Trade agreements with Brazil and Argentina mean local procurement enables Mexico to qualify for an exemption of duty on vehicle exports to South America,” Navarro says.

The core of HDM’s strategy in improving logistics efficiency is to reduce lead time and dwell time by closely

involving its logistics suppliers in Honda’s strategy. This involves implementing a methodology known as the PDCA cycle (Plan, Do, Check, Action) that allows HDM to measure improvement in the total logistics process.

“We try to find suppliers with the same expectations of continuous improvement,” says Navarro. “HDM tries to cultivate logistics partnerships that are long-term business relationships. For example, in working with UPDS, its Mexican rail carrier Ferromex initially did not have much experience in intermodal, but they have developed this. This arrangement provided us with considerable savings compared with truck transportation, which was our previous mode of transport.”

is rail the solution?HDM also wants to further integrate rail transportation into its inbound operation by using an intermodal service that connects Mexican ports with HDM’s facility. “We continue to work with UPDS to reduce lead-time. The benefits of

HDM does not buy parts directly as its production is not yet high enough

the biggest impact on production costs is logistics so HDM wants to increase its number of local suppliers, which also delivers tax benefits

4

Automotive LogiSticS • January/February 2007

By using rail, HDM has made savings on freight costs, reduced its insurance and minimised the risk of vandalism

Honda de Mexico

rail include savings on freight costs, a reduction in insurance, and minimising the risk of vandalism. Rail is also more stable because we use complete unit trains,” Navarro says.

The use of rail enables HDM to minimise trucking inefficiencies. “Guadalajara is a nett exporter, so we want to lessen the negative impact of issues that currently affect trucking efficiency, such as the high transportation demand, and the shortage of empties and drivers. We also want to minimise dwell time at the US border which is caused by traffic congestion,” Navarro explains.

the bigger pictureAs HDM is the only vehicle manufacturer in the region, achieving supply chain synergies with other VMs is difficult. Challenges include increasing domestic milk runs and developing an intermodal corridor with eastern Mexican ports. HDM also wants to complete the integration of UPDS and to stabilise transit time. Navarro says that with experience, HDM has been able to maintain greater accuracy in schedules and arrival times.

“We are also trying to increase northbound rail transportation. To balance the number of southbound containers of inbound parts we would ship containers with returnable racks northbound. However, we also want to move our service parts exports northbound in these containers,” says Navarro.

HDM’s main challenges regarding materials management are to further stabilise operations, to prepare the inbound network for an increase in production volume within the next two years, and to accelerate inventory turnover. Reducing the dwell time for containers on both sides of the border is also a challenge. HDM wants to reduce container dwell time at its facility to minimise detention charges imposed on truckers. “UPDS has provided us with a good turnover of containers. As HDM does not have inbound warehouse space, this is essential. We are also working on improving yard management, and the forecasting and defining performance metrics,” says Navarro.

improving customs flowOne of the main issues is the implementation of a Free Trade Zone (FTZ) at HDM’s facility, which will serve to improve operational efficiency. An FTZ would allow HDM to pay duties and fees on imported parts once its sells the finished vehicle. Nissan and Ford already have FTZs in Mexico. Navarro says that HDM’s competitiveness would increase as the main benefit of this system is an improvement in cash flow.

“The FTZ will enable us to expedite our containers; at the US-Mexico border, we only need to provide notification of entry. HDM has worked on inventory control for more than two years to obtain this status. Most companies need an FTZ to avoid stopping or inspection en route,” explains Navarro. In November, HDM was issued with a special license that permitted easier border crossing because it allows for customs inspections at San Luis Potosi.

HDM minimises border issues between Mexico and the US by having close communication and teamwork among

its border suppliers. It performs a quarterly review with trucking companies that use the borders. Navarros points out that HDM’s aim is to reinforce its logistics and corporate security structure to exceed the requirements of the Customs Trade Partnership Against Terrorism (C-TPAT). This is a voluntary US government and business initiative that is intended to build relationships that strengthen and improve overall international supply chain and US border security.HDM has improved its inbound logistics efficiency in a number of areas, and continues to make improvements. About two years ago, the carmaker switched from using truck transport for its US-origin shipments to rail carriers

BNSF in the US and Ferromex in Mexico. This reduced lead time from 11 days to nine. In April when it switched to the UPDS intermodal unit train, HDM further reduced the materials management process to seven days. As the lead time designated by the production department is eight days, the logistics section is able to maintain a one-day cushion, which is preferable as “it is risky to always be on the deadline,” says Navarro.

“UPDS has proven to be just as efficient as truck transportation. It enables us to achieve preferential crossing at the border along with GM and Nissan, who are on the same automotive unit train. We have maintained an on-time rate of 95 per cent. By contrast, we actually lost one or two days when we used truck transportation. Dwell time with truck remains very long because of the C-TPAT regulations,” he adds.

HDM also made a positive change in September 2005 when it introduced an intermodal rail service corridor from Manzanillo to Guadalajara for shipments originating in Japan. A cost reduction was achieved by switching from truck to rail. Recently, HDM integrated APL as a second ocean carrier for its inbound parts from Japan. Navarro says that this move enabled HDM to spread its risk because previously only Hapag Lloyd handled its automotive ocean freight.

Automotive LogiSticS • January/February 2007 34

the shift from truck to train has resulted in an on-time rate of 95 per cent

The integration of UPDS as LSP for inbound production parts, and returnable racks and aftermarket parts northbound, was another important change. HDM has also integrated returnable racks into its aftermarket parts business – its biggest revenue earner, according to Navarro. HDM ships between 15 and 20 containers of aftermarket parts daily. “We are moving away from wooden racks and pallets toward reduced packaging. Our first step is to test a metal crate, and next is to eliminate as much cardboard as possible. Instead, we are using thin layers of plastic and rubber,” he says. These changes led to an improvement in HDM’s overall logistics efficiency. Navarro points out that accelerated container turnover at its facility means that fewer containers are required, and this results in a reduction in administrative costs. He notes that having fewer racks in the inbound parts cycle has reduced the need for investment in racks and storage space.

HDM plans to increase its milk-run operations for local suppliers, and reduce costs and lead times on these lanes. “We are analysing the process, integrating new vendors into our inbound corridor, and deciding which carrier is best matched to which vendor,” says Navarro.

Streamlining aftermarket logisticsHDM is also focusing on optimising its aftermarket parts logistics. Domestically, the HDM automotive parts network has more than 100 Honda automobile dealers. Its distribution centre, located at the El Salto facility, opened in March and uses an in-house developed warehouse management system. The 12,000m2 facility is designated for aftermarket parts for cars and motorcycles, power products, and marine finished products.

HDM exports its aftermarket parts from El Salto to seven American Honda parts centres throughout the US. Says Navarro, “Our strategy is to expand exports to the US, and to support operations in Europe and Japan. We planned our first shipment to Europe at the end of 2006.” By reducing its order cycle time, HDM has been able to deliver aftermarket parts shipments to American Honda within one week of order confirmation.

HDM ships multiple orders in the same container, which provides more flexibility than in the past, when it shipped one part number per container. Since American Honda has reduced its inventory level, HDM has reduced its lot order size, which has increased shipment velocity.

HDM has stabilised its lead time from the plant to the US border to a maximum of 48 hours. In the past, it needed 24 to 48 hours just to cross the border, according to Navarro. “Our export system to the US used to be less stable because of the lack of power on the US and Mexican sides. However, we now have enough trailers and carriers,” he says.

It was also able to stabilise its lead-time by reducing the number of parts centres that it served from 11 to seven. This was achieved by concentrating low velocity parts shipments to its Loudon, Tennessee parts centre. For domestic distribution to dealers, HDM has started a daily order and shipment process. Previously, the frequency was twice weekly.

Finished vehicle logistics improvementsHDM has made some logistics efficiency improvements on its finished vehicle export network over the past few years. It ships 74 per cent of its finished vehicle exports to the US, 23 per cent to Brazil, and three per cent to Argentina. Says Navarro: “Initially, for exports to the US, we shipped finished vehicles from Guadalajara to Manzanillo by truck and then by water to San Diego. Since forming an agreement with Ferromex, we transport vehicles by rail from Guadalajara to the US.”

The Ferromex yard in Guadalajara is operated by Axis Logistica, which is part of US-based Allied Holdings. Axis also handles vehicle imports from Japan, which move by rail from Manzanillo to Guadalajara.

Navarro says that by switching from truck to rail for its exports, HDM reduced the overall damage from four per cent to less than 0.5 per cent.

Honda de Mexico

35Automotive LogiSticS • January/February 2007

HDM’s 12,000m2 facility is designated for aftermarket parts for cars and motorcycles, power products and marine finished products. Parts are exported to seven centres throughout America

HDM uses LSP Ferromex to transport finished vehicles by rail from guadalajara to the US

"NAPO's philosophy is to provide ourcustomers with the right part at the righttime, in the right place, at the lowest cost-inshort, better, faster cheaper," says logisticsmanager Tony Minyon.

Keeping Mexico on the Road

Anthony Coia Posted: April 1, 2002

Toyota's North American Parts Operation continues itsjust-in-time supply chain strategy as it expands inLatin America

Maintaining a strategy of just-in-time delivery forinternational shipments has become more difficult inrecent months. Border delays, increased inspectionsand economic uncertainty have combined to leadmany companies to increase their safety stock.However, some companies have been able tocontinue using just-in-time strategies by revaluatingtheir logistics options. Toyota Motor Sales U.S.A.,Inc., headquartered in Torrance, Calif., is onecompany that's sustained a just-in-time strategy byreducing its logistics costs significantly. This springthe company will carry on its just-in-time strategy inMexico as it endeavors to meet the growing demandof the Mexican market.

North American Parts Operations is a business unit ofToyota Motor Sales U.S.A., Inc. This division handlesthe distribution of service parts and accessories toToyota and Lexus dealers in the U.S. and to otherToyota distributors around the world. NAPO procures parts valued at $900 million per yearand spends about $110 million on transportation annually.

Reducing Logistics Costs

Says logistics manager Tony Minyon, "NAPO's philosophy is to provide our customers with theright part at the right time, in the right place, at the lowest cost-in short, better, fastercheaper." NAPO has targeted a reduction in all logistics costs by a substantial margin usingStretch Goals, a set of ambitious targets to be achieved within a three-year time frame.Stretch Goals involve taking a global view of the "kaizen," Japanese for continuousimprovement, activities that it does regularly.

"These plans have enabled NAPO to achieve a reduction in inventory of 8 percent, from 3.33months of supply in January, 2001 to 3.1 months in December, 2001," Minyon says. "Oneway that we reduced inventory is by increasing deliveries to once a week instead of once amonth, or daily instead of weekly. In addition, we've reduced transportation costs as apercentage of sales from 5.5 percent in January, 2001 to 4.82 percent in December 2001."

One example of how NAPO achieved transportation savings involves its airfreight shipments.Previously it shipped from Ontario, Calif., to Scarborough, Ontario from the airfreight hubs

directly to the dealers. Now it ships first to a parts distribution center and then to thedealers. This allows NAPO to pay for the airfreight per pound rather than per package whilereducing damage noticeably since the freight is no longer processed through the air hubsystem, Minyon says.

Expanding into Mexico

NAPO will begin a new program this month supplying customers in Mexico from the U.S. andJapan. It plans to use Expeditors International, a Seattle-based logistics services provider asits freight forwarder and customs broker. "The time is right with the economy in Mexico andour market studies have shown a pent-up demand," Minyon says.

The logistics plan begins with the Mexican dealer placing an order through the DealerCommunication System. The order is input into Toyota Parts North America's ordermanagement system using "small distributor logic," which essentially sells directly to thedealer, bypassing the need for a distributor. The order is shipped from TPNA's facilities inHebron, Ky., or Ontario. Minyon says airfreight is both cheaper than truck-since the rate isbulk palletized-and faster.

Following arrival in Mexico, the Mexican government's approval, and customs clearance,packaging, and labeling, Expeditors International creates an invoice for Toyota. The shipmentwill then be delivered by TTR Logistics, based in Florence, Ky., which is a joint ventureconsisting of Miami-based Ryder System, Inc., Toyota Tsusho America, Inc., and ToyotaCorporation.

The advantages of TTR Logistics' involvement stem both from Ryder's experience in logisticsmanagement and integrated technology and Toyota Tsusho's expertise in cross-docking andwarehousing operations. "TTR's presence in Mexico provided valuable feedback and theopportunity to provide low-cost, rapid, and safe deliveries," Minyon says.

He says because LTL transportation doesn't exist in Mexico the way it does in the U.S., NAPOneeded to pay particular attention to designing a logistics system that will guaranteeefficiency: "With TTR performing the oncarriage from the airport in Mexico City, NAPO willutilize the backhaul capabilities rather than buy an entire truck."

Ryan Furuta, vice president of business development at TTR Logistics, says his company willbe shipping to five Mexican dealers to start.

"All freight will go through Mexico City and TTR Logistics will provide transportation from theairport to dealers in Mexico City, Guadalajara, and Monterrey using a cross-dockingoperation," Furuta says. "Toyota Tsusho was looking for more support in the areas oftransportation and logistics. It already had warehousing capabilities. Ryder had the routedesign and transportation capabilities in place as well as a good safety record in Mexico."

Rob Porter, vice president of operations at TTR Logistics says the company's plan involvesapproaching the program with a series of steps: "We're starting out small and would prefer togo in slowly rather than shoot up and take off," Porter says. "Our goal is a fully integratedparts operation from North America three or four years down the line." He adds that up tonow the system in place has been piecemeal with some overlap. Toyota is looking forcohesiveness. And that's where Ryder's expertise is utilized.

Jim Press, executivevice president andchief operatingofficer, Toyota MotorSales, USA, Inc.

Toyota's long-term plan for Mexico begins the same way with the Mexican dealer placing anorder through the DCS. The difference is that the parts will ship directly from warehouses inMexico. Replenishment will be directly to one or more warehouses in Mexico from the NAPOparts centers, according to Minyon. Shipments will be cleared either at the border or at thewarehouse in Mexico: "We want our system to go directly to Mexico which will be faster," hesays.

Although NAPO uses third parties to facilitate its international logistics processes, it overseesthe management process centrally. It's reluctant to use a third party logistics provider for allof its logistics needs. "We're slow to give up control and cautious in this area. For this newMexican business we're giving Expeditors International more leeway such as the ability tochoose airlines," Minyon says. "That's something we've never done before."

Every country presents its unique challenges. NAPO has a high velocity system in place toensure the security of its cargo, relying on established logistics partners. It may encountercustoms delays but, by dealing with brokers that have good relations with customs, andtransmitting data electronically, the process should go smoothly.

As Toyota looks ahead, it continues to rely on innovative ideas to improve its logisticsefficiency for international shipments. By the same token, its core philosophies of continuousimprovement and eliminating wasteful movement have enabled it to maintain a just-in-timedelivery strategy. WT

Sidebar: View From The COOBy Patrick Burnson

[WORLD TRADE MAGAZINE spoke with Jim Press, the executive vice president and chiefoperating officer Toyota Motor Sales, USA, Inc., for a "C"-level perspective on current supplychain challenges.-Ed.]

WORLD TRADE: Has a "down economy" had an impact on your manufacturing anddistribution strategy? If so, what markets appear weakest at this point? Which have the most

potential?

Jim Press: Toyota continues to prosper and grow stronger as a company. We're the world'sthird-largest auto maker and the fourth-largest in America. We now build nearly 6 millionvehicles each year at 56 plants in 25 countries and market them in more than 160 nations.In North America, we're building or operating 12 plants that produce two-thirds of thevehicles we sell here. And last year, we sold 1.7 million vehicles in the U.S., the 12thconsecutive year of million-plus sales. We understand things are going to be even tougher inthe coming year. But the economy is expected to begin recovering during the second half.Despite the slowdown and unsettling world events, Toyota continues to prosper and isinvesting now for tomorrow's success. We'll do this by providing the best customer serviceand the highest quality products for the market.

WT: How is Toyota poised for the economic rebound? What advantages do you presentlyenjoy over your competitors?

JP: I believe Toyota will emerge as the leading automotive company in the months and yearsahead. Toyota will prosper because in times like these consumers generally rely on familiarand trusted relationships. They seek vehicles they can depend on. Value and other long-termfactors will play a bigger role in their choices. We believe our customers will continue to trustin our products, allowing us to do far better than any of our competitors.

WT: What is the chief marketing challenge facing Toyota, and how do you achieve branddifferentiation?

JP: We're facing more intense competition. Merrill Lynch reports 200 redesigned cars andtrucks will hit the market between now and 2005, up from 147 for the preceding four years.That means increased selling for every auto maker. The underlying strength of Toyota andLexus is our ability to consistently build high quality, high value, appealing vehicles thatpeople want. Our strong consumer acceptance creates an environment where a high qualityconsumer-oriented retail organization can flourish. Toyota is recognized as the 14th mostvaluable name among all brands on earth, and it's getting stronger each year. We have adistinct advantage of building great products with leading-edge technology, such as ourgasoline-electric hybrid Prius sedan and concepts like the fuel-cell hybrid based on theHighlander sport utility vehicle. Toyota has survived challenges before, and we will survivethis challenge as well. In fact, we'll use it to spur us on to even greater success.

SEPTEMBER/OCTOBER08

The aftermarket is all about getting the right parts out to the customer as quickly as possible. Dealers and their customers don’t want to wait more than a day now to source a critical part. However, the escalation in transport costs, in part due to rising

fuel prices, is changing the carmakers’ priorities. They are now exploring co-loading opportunities and reassessing their warehousing networks to tackle transport overheads. They are also strengthening supply chain connectivity through their information technology systems to reduce waste.

Although the role of global sourcing varies among manufacturers and regions, its impact on the service parts supply chain is indisputable. In the US, Chrysler imports some parts from Europe and a growing volume from Asia. Doug Zopfi says the company is aggressively increasing its

sourcing from low-cost countries (LCCs). “Chrysler has been focusing mainly on China, but we are also involved in India and Korea,” he points out.

The problem for Zopfi however, is that, although one can find a cheaper piece price in an LCC, factoring in logistics is another story. Vehicle manufacturers need to consider the total landed cost, which includes ocean freight, customs clearance, deconsolidation, and inland distribution.

Global sourcing efficiencyOver in Germany, Volkswagen sources about 40 per cent of its service parts from LCCs. Their increased use means there is a demand for better connections between departments says the company’s Marcus Osegowitsch. “With the increase in global sourcing, linking our master depots has become more

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The replacement fillers With a boom in warehousing on the horizon thanks to rising cost of transport, carmakers are more eager than ever to streamline their service parts networks. Anthony Coia talks to the top people at Chrysler, Kia and VW about getting a head start on the spare part

important because we do exchanges between them regularly; we use them for both warehousing and sourcing.”

In addition, with the longer lead times due to global sourcing, transport costs and availability become a bigger issue. Outbound container availability from China can be a problem for example.

Kia Motors America (KMA) sources about 85 per cent of its parts from Korea, 10 per cent from the US, and 5 per cent from other countries. “Global sourcing has made us less efficient overall,” says KMA’s Rick Palmer. “The major impact occurs when a vendor supplying the plant has a part that is both a service part and a part for the plant, and it goes out of production. These vendors are located all over the globe and managing minimum order quantities, packaging and other service parts requirements becomes very labour intensive,” he says. However, the launch of Kia’s plant in Georgia in late 2009 will reduce import quantities and increase US content.

Balancing the delivery bookZopfi says that Chrysler’s objective is to provide reliable, high-quality parts deliveries that balance with supply chain costs and speed. “Chrysler wants to increase velocity and reduce variability,” he says. “In the past, we leaned toward customer service, but now we must deal with rising supplier costs. We need to reduce non-value adding steps and touches.”

To achieve an optimal balance between customer service levels and transport costs, service parts networks typically have a hierarchical structure. Chrysler operates four national parts distribution centres in Michigan and one in Wisconsin. It also operates 23 regional parts distribution centres in major North American markets, which serve Chrysler’s 4,000 dealers.

California KiaKia operates a national distribution centre (NDC) in Riverside, California near the Ports of Los Angeles and Long Beach that stocks the entire range of parts. The 450,000 square-foot facility opened early this year.

“Our new distribution centre is 200,000 square feet larger, but it has the same facilities cost as the previous distribution centre (DC) – and is operationally more efficient,” says Palmer.

It also operates a parts distribution centre (PDC) in Allentown, Pennsylvania and one in Lawrenceville, Georgia (Atlanta) that it uses to support the dealers of its sister company Hyundai. In addition, Kia uses a Hyundai-operated PDC in Aurora, Illinois (Chicago). Each PDC handles about 70 per cent of Kia’s part numbers.

KMA Corporate Parts is responsible for managing the service parts network. The logistics management team consists of a National PDC Operations Manager, a National Transportation Manager, and a National Manager for Systems and Supply, Rick Palmer.

Palmer says that Kia wants to increase the frequency of deliveries to the dealer and enhance its ability to provide same day shipment, while reducing its overall supply chain costs. To achieve this, Palmer reveals that Kia is looking at utilising additional warehouses in the US to take advantage of lower property costs while minimising higher transportation costs.

Acting localOn a broader scale, Volkswagen’s service parts network consists of eight master depots worldwide in Germany, Czech Republic, Spain, Mexico, Brazil, South Africa and two in China. The master depots stock 100 per cent of service parts, approximately 650,000 SKUs. Volkswagen operates 52 local depots worldwide, which supply the dealers. The local depot typically maintains 96 per cent of the parts available. It also operates regional depots in the US, Dubai and Singapore, which serve to reduce distances between the master depots and local depots and avoid long replenishment times.

“Our objective is to manage globally but realise (goals) in each region. Now, that far more cars are moving around the world, we need to take more of a global management approach to maintain efficiency,” says Osegowitsch. “Secondly, we want clear targets for each master depot and regional depot. Our current inventory management network balances the inventory region by region. We want to look more toward networking these centres together globally and sourcing more globally,” he says.

Volkswagen has a hands-on role in its depot management system. Osegowitsch says that warehousing is a core competency, so Volkswagen tends to keep it in house by operating a number of its main depots. As for the local depots, it depends on the region; the tendency is to outsource more as new depots are built.

Third party for inboundBy contrast, Chrysler’s third party logistics providers (3PLs) handle all inbound logistics for service parts, including planning, scheduling, EDI, packaging, consolidation, transport and PDC operations. Vehicle manufacturers typically use contract motor carriers to handle most service parts 4

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29SEPTEMBER/OCTOBER08

Every ten cent increase in fuel (per gallon), represents a $3.5m

increase in the transportation budget– Doug Zopfi, Chrysler

Chrylser’s Orlando parts distribution centre – the company is increasing productivity in its national and regional PDCs

deliveries to dealers. Chrysler distributes 92 per cent of its orders to dealers on dedicated delivery trucks. Approximately 6 per cent of orders move by United Parcel Service (UPS), which Chrysler uses when a dealer orders parts that are not available in the local distribution centre. About 2 per cent of orders move as less than truckload (LTL) freight. Chrysler also uses rail to transport parts between its national PDCs and regional PDCs that are located in Portland (Oregon), Denver, Dallas, Orlando and Toluca in Mexico.

Kia also uses dedicated delivery services for most of its dealer shipments – approximately 75 percent of its lines. Another 17 per cent moves as LTL freight. Air carriers handle about 8 per cent and Fedex small package ground service handles 1 per cent.

Rapid response to costRegardless of who handles service parts logistics, vehicle manufacturers are facing greater pressure to reduce costs. Zopfi says that Chrysler needs to reduce costs by improving productivity in its PDCs. It also needs flexibility from its suppliers to find alterative distribution models. “We need to cut costs by reducing touches through methods such as delivering directly from the supplier to the dealer. Possibly, delivering to Wal-Mart or to repair shops instead of to dealers could improve efficiency,” he says.

The greatest need to reduce costs has come from rising transport costs. Zopfi says that with high oil prices, Chrysler wants to find transport options that will reduce the number of miles travelled, and thus the cost per mile. “Every ten cent increase in fuel (per gallon), represents a $3.5m increase in the transportation budget,” he points out.

Chrysler has identified countermeasures to higher transportation costs such as reducing the delivery frequency to its dealers. That could mean delivering to remote places only three or four times per week instead of five times.

Palmer says that for Kia, the main challenge is the “law of unintended consequences”, in which a rapid and sudden increase in transport costs requires a rapid response. “We must take great care to be certain that a short-term response does not result in a long-term consequence. If you try to save costs somewhere else, such as by delaying a project or reducing headcounts. You must be careful not to wind up actually increasing costs,” he says.

Kia made a careful decision when it converted all of its

inbound sea shipments to the Atlanta PDCs from mini-landbridge to all water earlier this year. Palmer says that one reason for the change was to reduce costs. Kia was able to maintain the same total landed cost this year as it had last year despite the increase in transportation costs.

Another reason was congestion and rail delays at the ports of Los Angeles and Long Beach. “This became expensive, so we needed to reduce the risk. Although mini-landbridge was shorter, we could not count on it,” explains Palmer.

For Volkswagen, cost increases in the short term involving transport, materials and packaging are a challenge. For example, it is trying to extend its global use of reusable containers to Russia. However, it is difficult to return empty containers through Customs, according to Osegowitsch. The rise in transportation costs has had an impact on Volkswagen’s way of thinking as opposed to the physical network. “We always need to balance transportation, inventory, and floor space,” he explains. “Now, we are rethinking our entire system toward more efficient transportation. That could mean that we need to develop more warehouses.”

Sharing resourcesAnother way to improve transportation efficiency is by loading shipments from different vehicles manufacturers on the same vehicle. For service parts, most such collaboration among vehicle manufacturers occurs on the outbound side in delivering to dealers. Zopfi points out that historically, vehicle manufacturers did not coload their shipments. Yet, they could achieve cost savings if the dealers are located near one another. Improving trailer density in any leg of the supply chain may involve sharing services, especially for remote dealers. For example, both Chrysler and Toyota have PDCs located in Portland. “To serve dealers in remote Montana, we would consolidate with Toyota in Portland, send it to a cross-dock, and deconsolidate it before sending it the dealers. We are also working with GM and Nissan, where there is a

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SEPTEMBER/OCTOBER08

Our new distribution centre is 200,000 square feet larger, but it

has the same facilities cost as the previous DC – and is operationally

more efficient – Rick Palmer, Kia Motors America

Pallets at Kia’s national parts distribution centre in Riverside, California are moved to the shipping dock

4

logical consolidation point to share the truck,” says Zopfi.Kia also works with carriers that commingle parts from

several manufacturers. “We leverage efficiencies with Hyundai and others that provide a common service. This occurs primarily with common carriers that both Hyundai and Kia use, such as for shipping from the Atlanta and Chicago PDCs to the dealers,” says Palmer. In southern California, Kia also uses a carrier that serves all of the OEMs in the area that are not big enough to warrant dedicated service. The carrier will consolidate shipments and provide them with a reduced rate.

Volkswagen also commingles transport within its divisions. Osegowitsch says that it optimises inbound logistics from suppliers to the master depot through milkruns. Spare parts and production parts go on the same trailer, then to a regional crossdock where they are separated and rerouted. On the outbound side, Volkswagen collaborates with other OEMs on spare parts from the local distribution centres to the dealers. “Other OEMs are not competitors in this area. For outbound, this is new thinking, only [occurring] in the past two or three years. We are doing this to reduce costs but we also want to make sure that the service levels do not suffer,” says Osegowitsch.

Looking for the lean Improving the load factor through collaboration implies eliminating waste, so does reducing supply chain costs. Zopfi says that Chrysler follows the lean principles of eliminating waste by using value stream mapping at the macro-level (supply chain) and micro level (PDC). “The push system would add variables and disruption to the supply chain. It took us a while to adopt a pull philosophy, which changed things fundamentally,” says Zopfi. He points out that within its PDCs, Chrysler has been introducing lean operating systems that include small batch processing and visual management techniques.

The importance of lean principles in aftermarket supply are not lost on VW either. “We must look at lean principles as part of end-to-end supply chain thinking,” says Osegowitsch. “In managing and networking their inventories, each warehouse looks into lean processes. We are doing it in our master depots and networking the inventory planning to make it lean globally; not for a specific warehouse, but a global warehouse.”

Although Kia does not formally practice lean principles, it uses them informally in operating its PDCs. “It is more of a resource issue than a focus issue. We have regular updates on PDC efficiencies, but no lean processes or procedures are in place,” says Palmer.

Replenishment and referralAlthough their philosophies on optimising logistics efficiency may differ, using IT to help achieve it is a common thread. Chrysler recently introduced its Automated Replenishment Order (ARO) process with the dealers’ inventory. Zopfi says that historically, dealers would be in charge of ordering their own parts. Now, Chrysler manages 60 per cent of the part numbers that its dealers maintain. “When the dealers sells inventory, the system automatically replenishes it. This is a

guarantee to the dealer, so there is no risk to the dealer for holding it,” explains Zopfi. MOPAR has implemented ARO for 90 per cent of its dealers as of June 2007. As a result, the dealers’ stock availability has increased by 4 per cent.

Another of Chrysler’s improvements is its Referral Direct Program. When a part is not available, the system seeks it and issues a referral to ship inventory to the dealer. In April, Chrysler began using UPS Ground as the carrier for the program, which provides complete visibility. Zopfi says that its dealers’ satisfaction improvement has increased from 48 per cent to 88 per cent compared to the previous system.

Forecasts and standardsKia has implemented i2 Demand Manager forecasting software, which Palmer says was instrumental in reaching a 97 per cent system fill rate and a 95 per cent facing fill rate from the prior 90 per cent range. It was also vital in reducing airfreight expenses year-over-year by 20 per cent in 2006, 55 per cent in 2007, and another 10 per cent in 2008 YTD, according to Palmer. A key factor in these cost savings was Kia’s transportation review last year.

Volkswagen has standardised its software and processes on SAP. The project began in 2000 and has been rolled out more than 20 warehouses. “We’ve seen huge improvements over the previous standalone systems in each depot. SAP has created personnel and process efficiencies since now we only need to support one system. It has reduced inventory and increased picks per person,” he says, adding that the system will be fully in place by 2010 at a total of 50 master and local depots.

Service parts manufacturers have been re-examining their supply chains from a macro perspective as well as a micro perspective with the objective of improving logistics efficiency. Among their key considerations is the need for cost reduction, which has been amplified by rising transportation costs and broader global sourcing. Yet, even as they focus on cost reduction, service parts shippers are keeping a watchful eye on their customer service levels. q

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SEPTEMBER/OCTOBER08

Who we spoke to:Marcus Osegowitsch, Head of Global Supply

Chain, Spare Parts, Volkswagen

Rick Palmer, National Manager for Systems

and Supply, Kia Motors America

Doug Zopfi, Director, Global Parts Supply,

MOPAR Parts Division, Chrysler

We always need to balance transportation, inventory, and

floor space. Now, we are rethinking our entire system toward more efficient

transportation. That could mean that we need to develop more warehouses

– Marcus Osegowitsch, Volkswagen

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.