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Supply Chain

In order to strengthen the sustainability of the global supply chain,
HS Hyosung Advanced Materials is committed to operate a supply chain management system that fulfills economic, social, and environmental responsibilities which cover labor, human rights, ethics, safety and environment.
Supply Chain

Supplier Management System

Supply Chain Strategy & Policy

HS Hyosung Advanced Materials, along with our suppliers, establishes and operates a sustainable supply chain management system by fulfilling the responsibilities of quality technology, labor and human rights, safety and health, climate change response, compliance management, and the overall management system. To minimize human rights violations, and environmental destruction that occur when mining minerals in high-risk areas, conflict mineral policies are included within the “Sustainable supply chain management policy” and “Supplier Code of Conduct”.
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Supply Chain Strategy and Policy
  • Minimize negative social, environmental, economical impact from business activities
    • Competitive quality technology and the ability to enhance Establish a healthy corporate ecosystem by pursuing mutual growth with partners by securing competitiveness in overall management such as cost, quality, technology, and delivery date Target to exceed the quality Cpk of 1.33 of major suppliers by 2030
    • Fulfilling social responsibility Operation of a supply chain management system that fulfills social responsibilities through working conditions and safety, human rights protection, and ethical management in compliance with international laws and regulations Target to achieve 100% execution of regular ESG assessment of key suppliers by 2030
    • Minimize negative impacts to environment Fostering and supporting partners who are responsible for environmental issues such as climate change and biodiversity protection, carbon emissions, fine dust, waste, and chemical management; Target to secure 5,000 ton/month of eco-friendly chips to achieve 30% conversion to sustainable materials of key products by 2030
Sustainable Supply Chain Management Policy Sustainable Supply Chain Management Policy

Supply Chain
Governance

The Supply Chain Management Committee(SCMC) was established with the Chief Procurement Officer as the chairperson. Composed of purchasing managers from each overseas business sites, SCMC discusses important issues regarding global supply chain twice a year. The Global Sourcing Procurement Team of HQ, which oversees the management of suppliers, regularly manages and supports the supply chain management by collaborating with technology, quality assurance, and E&S teams at all business sites.
Supply Chain Governance
  • Supply Chain Management Committee
    • HQ Purchasing Overseeing total supply chain process
    • Overseas/Sites Purchasing Managing local suppliers
    • QA/Production Audit production quality and provide guidance
    • Technology Innovation Support technological development and improvements
    • Environment &Safety Team Safety petrol support and mangagement
  • Sustainabilty Mangagement Team Support supply chain mangagement system

Risk Management

Risk Management

Preliminary Risk Management of New Suppliers

HS Hyosung Advanced Materials conducts a preliminary risk assessment that takes into account ESG factors such as labor and human rights, ethics, and environment and safety, on top of credit, quality and technology, cost, and delivery, when selecting new suppliers. New supplier contracts are only concluded if they attain or exceed a certain score in the preliminary risk assessment. In the event of non-compliance with some items, HS HAMC will provide a deadline for corrective measures and conclude the contract after improvement, or exclude the candidate from the new contract if the deadline is not met in time in order to manage potential risks for new suppliers. In addition, we require all suppliers to comply with the Supplier Code of Conduct and sustainability-related matters through the signing of a standard contract that includes ESG provisions.

Supplier Code of Conduct Move Page

Regular Evaluations of
Suppliers

HS Hyosung Advanced Materials conducts a regular supplier assessment once a year to key suppliers. The scope of the regular assessment includes not only items related to products such as quality and delivery, but also ESG-related items such as human rights and labor, ethics, environment and safety, and climate change. Suppliers with low scores in the regular assessment results are required to identify and improve improvement tasks through on-site audits, and if they are not improved within a certain period of time, they are suspended from trading to manage potential risks. In addition, HS HAMC selects and awards outstanding suppliers once a year based on the results of the regular evaluation.

Suppliers Communication Channel

HS HAMC operates communication channels that allow suppliers to voice their opinions any time in the event of an unfair request or violations of our Code of Conduct including fair trade. Confidentiality of reported information and whistleblower is guaranteed, and any consequences or disadvantages are prohibited by our whistleblowing policy.

Whistleblowing Center Move Page

Supply Chain Continuity Risk Management

As a warning for the future when partners are unable to supply due to unexpected accidents and situations, HS Hyosung Advanced Materials has established the emergency response system embedded with the emergency organization and detailed response measures for each case. We have defined natural and man-made disasters and safety accidents, as well as strikes and raw material supply shortages, and established the Emergency Response Manual for each scenario to manage the risk of delayed delivery through periodic training.

Enhancing Sustainable Supply
Chain Education for Purchase

HS Hyosung Advanced Materials provides sustainable supply chain education for purchasing manager to practice co-prosperity with suppliers. HAMC is conducting education on sustainable supply chain management to fulfill its social responsibility for labor and human rights, and on green procurement policies to minimize negative environmental impacts.

Regular Review of Purchasing Practices

HS Hyosung Advanced Materials continuously reviews the purchasing practices of its suppliers to ensure that they are in line with Supplier Code of Conduct and to proactively manage potential risks of ESG requirements.

Supplier Support Activities

HS Hyosung Advanced Materials is building partnerships based on mutual trust with our suppliers to strengthen the sustainability of its global supply chain. Based on the principle of fair trade, we integrally manage ESG risks with the aim to coexist and grow with our suppliers. As a mutually beneficial partner that manages business-related risks together beyond simply enhancing the competitiveness in the cost and quality of its suppliers, HS Hyosung Advanced Materials continues to engage in collaborative and support activities in various fields, ensuring that our suppliers carry out sustainable management activities.

Comprehensive Support Programs for Suppliers

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Comprehensive Support Programs for Suppliers
Excellent Partner Support
  • Payment of cash for suppliers‘ goods within 10 days after closing
  • Prizes are awarded for Outstanding Supplier Companies Award
Finance Support
  • Payment in cash
  • Financial support for joint overseas expansion
  • Investment resources for shared growth
Technical Support
  • Joint R&D and Joint Patent Application
  • Provide technical consulting to improve quality
  • Award for Outstanding supplier
Productivity Enhancement Support
  • Provide productivity-enhancing consulting
  • Enhancement of capabilities through government-led projects such as the Energy Partnership Project hosted by the Korea Energy Agency
  • Support for management advice through participation in the ‘Management Doctor System’
  • Support for ESG consulting
Safety Support Program
  • Focused monitoring of high-risk workplaces, potential risk assessment support
  • Share safety & health issues and best practices during meetings with suppliers' safety & health representatives
  • Technical support for weak areas of supplier’s safety & health activities
  • Award partners with outstanding safety measures / activities partners
  • Mentoring of safety & health of new partners
  • Participate in the Win-win Cooperation Program organized by the Korea Occupational Safety and Health Agency
  • Safety-first activities (daily safety measures guidance)
  • Support firefighting equipment, protective equipment, first aid, etc.
Close-the-Gap Program
  • Provide education contents and place for suppliers’ ethical management education
  • Programs for people with obesity, smoking cessation, and musculoskeletal disorders
  • Use of resort-facilities for individuals’ vacation and provide products to overcome summer heat
  • Provide HAMC employee-level benefits (i.e. discount for wedding hall rent, medical services)
  • Provide safety supplies such as helmet, gloves, safety shoes, and masks for preventing COVID-19

Supplier ESG Support Acitivities

Supplier ESG Support Acitivities
  • STEP 1
    • Monitor and manage on quality, safety, etc., and im prove issues
    • Request for signing a contact in consideration of ESG risk and pldge of code of conduct
    • Compliance with alws and regulations including conflict minerals
  • STEP 2
    • ESG risk assessment(self-diagnosis, onsite due diligence, etc.)
    • manage climate change response and request for GHG emissions reduction activities
    • Demand to expand the use of eco-friendly and recycled materials
  • STEP 3
    • Operate grievances communication channels
    • Conduct trainings o environmental safety and health, human rights and ethics
    • Support for ESG capacity building(social, environmental/safety,energy, etc.)

  • Energy reduction consulting and equipment support

    We are taking part in a tri-party project with the Korea Energy Agency to support selected suppliers save energy and reduce GHG emissions. After identifying the factors that reduce energy and greenhouse gas emissions through on-site diagnosis, problems along with economic analysis and improvement themes are conducted. As a follow-up project, we also support our suppliers to replace their old equipment to a high-efficiency equipment in their plat.

  • Supporting small and medium-sized suppliers

    HS Hyosung Advanced Materials recommends its suppliers to the project of selecting promising SMEs for materials, parts, and equipment by the Korean Ministry of SMEs and Startups to realize partnership management by providing assistance in technology development.

  • Support for ESG Management Competency Building

    HS Hyosung Advanced Materials carries out training support projects on ESG-related topics, such as human rights, ethics, supply chain, environment, safety, and climate action, in order to increase partners' understanding of ESG activities and facilitate their application to management activities. In particular, the education includes topics about diversity and inclusion, such as awarenss training on disability and the prohibition of gender discrimination. Furthermore, we participate in the Management Doctor Program which helps suppliers to carry out a comprehensive management diagnosis (strengths and weaknesses) followed by management advice and know-how (at least once a month) at the business sites to strengthen our partners' competitiveness.