Supply Chain

  1. Go to Home
  2. Sustainability
  3. Social
  4. Supply Chain

Supplier Management Overview

Hyosung Heavy Industries strives to establish transparent and equitable criteria for selecting partners. Our website clearly outlines the mandatory and recommended criteria for bidding participation, and anyone is free to apply for partner registration via the electronic procurement system. We also review the registrations of all new partners before allowing them to participate in the bidding for supply chain risk management. When selecting a new partner, we evaluate the partner's financial stability, sales performance, credit rating, quality and management system, among others, based on our evaluation criteria. In addition, we conduct a reevaluation of existing partners and take remedial action based on the evaluation results.

Power & Industrial Systems Division Supplier Management

Supplier Registration

Hyosung Heavy Industries' Power & Industrial Systems division is accepting new transaction proposals via open sourcing. New transaction proposals submitted to
the SRM website (https://msrm.hyosunghi.com/spLogin.do)
progress into transactions via internal screening and registration evaluation processes.

  1. Supplier's
    proposal
  2. Proposal
    evaluation
  3. Preliminary
    screening
  4. Supplier
    registration
    evaluation
  5. First article
    verification
  6. Mass
    production
    order approval

  1. Transaction
    proposal

    • Application for transaction proposal
      Company introduction and confirmation
      of receipt sent via e-mail
    • Screening
      Review of necessity and
      feasibility of the proposal

  2. Registration screening

    • Request for and
      receipt of review
      data
      Preparation of
      document review
      data
    • Preliminary
      screening
      Document
      screening
    • Registration
      screening
      Documentation and due diligence for management, production, quality, safety and health sectors
    • New company
      registration
      Provision of
      transaction
      opportunities

  3. Quality validation

    • First article order
      Selection of primary items
      and order of samples
    • Quality assurance
      Quality inspection and 4M setting

  4. Procurement

    • Mass production transactions
      Basic transaction agreements
      determining volume/price

Supplier Selection

Hyosung Heavy Industries' Power & Industrial Systems division receives bids through either long-term contracts or project-specific bidding, based on the characteristics of the purchased materials, and selects the final partner through fair and reasonable internal procedures for the bids received.

  1. Budget confirmation
  2. Quote request

    Provision of information on
    quantity,
    delivery, payment
    terms, defect period,
    delay compensation, etc.

  3. Quote receipt
  4. Quote review
  5. Partner selection

Supplier Evaluation

Through regular partner evaluation, Hyosung Heavy Industries' Power & Industrial Systems division helps partners improve their competitiveness in areas such as quality, cost, and ESG management, and thereby aims to improve sustainability in the supply chain.

    • Transaction performance analysis
    • Selection of partners for
      evaluation and quality
      group classification
    • Quality groups
      • A
      • B
      • C
      • D
  2. Evaluations according to
    group-specific criteria
    • System data
      Material defect rate,
      delivery compliance
      rate
    • Partner activities
      Mutual growth,
      work cooperation
      level, cost
      reduction,
      delivery response
    • Additional points
      Partner ESG
      management
      evaluation
  3. Review of evaluation
    results and confirmation
  4. Measures based on
    evaluation results
    • Top-tier partners
      Provision of incentives
    • Middle-tier partners
      Fostering
    • Lower-tier partners
      Penalty levied

Construction Division Supplier Management

Supplier Registration

New supplier requirements

New partner requirements
Classification Qualifications
Fully registered partners Non-licensed companies may apply in the case of equipment rental and service construction, such as the supply of materials, tower cranes, or hoists to a company holding a professional construction business license under the Framework Act on the Construction Industry
Top construction firms in terms of construction capability based on evaluated amount
Companies that have not been sanctioned according to construction laws and regulations
Companies with at least Grade B credit rating and Grade C cash flow (evaluated by NICE Information Service)
Companies with patents and designated for new technology protection given preference

Recruitment period / How to apply

Recruitment period / How to apply
Classification Registration period and validity period Announcement
Regular registration Annual recruitment period: May (subject to change according to company circumstances) Hyosung Heavy Industries Construction PU Electronic Procurement System
Renewal cycle: 1 year (open recruitment & closed recruitment every other year)
Validity period: until the next year's renewal date (registration review is conducted every year after new registration)

Supplier recruitment

Partner recruitment
Classification Key details
Reevaluation of
existing companies
  • Construction performance evaluation (35 points), safety performance evaluation (35 points)
  • Evaluation of bidding performance (30 points), defect handling evaluation (separate opinion on whether to register or not)
New recruitment planning
  • Incorporation of outcomes of reevaluation of existing companies (registration maintenance, cancellation, or re-examination)
  • Confirmation of table of organization for new recruitment
  • Recruitment schedule confirmation
New recommendation/
receipt
  • Notice/notification of new registration
  • Receipt/screening of new recommended companies
Registration evaluation/selection of target companies
  • Evaluation according to registration evaluation table
  • Creation of registration evaluation ranking table
  • Review of registration in the order of evaluation ranking (on-site due diligence or detailed due diligence where necessary)
Registration confirmation/
notification
  • Notification of partner registration

How to apply

How to apply
Classification Key details
Document submission In general, documents must be sent by registered mail within the allotted timeframe
Application Application form: Hyosung Heavy Industries Construction PU Electronic Procurement System
Documents to submit
  • Application for partner registration
  • 1 copy of all required documents in the application for partner registration
Online registration Register to the Hyosung Heavy Industries Electronic Procurement System (online registration)
  • Access the Hyosung Heavy Industries Construction PU Electronic Procurement System
  • Log in after signing up (enter ID & password)
  • Register as a member after verifying outsourcing/materials (transfer credit rating information online prior to registration), then enter information into the company information registration management system - Unregistered companies are not eligible
  • Online registration is unavailable outside the registration period

During the registration period, already-registered companies must log in and update their registration information
Notes
  • Credit rating agencies are required to send evaluation results via e-mail in response to a request
  • Credit evaluation is required to evaluate the previous year's financial statements

Supplier Management Support

Subcontract selection process

Site
  1. Ordered work type review
  2. Subcontracting requests (5–7 days)
  3. Determination of bidders (internal consultation)
  4. Electronic site description / On-site explanation notice (5–7 days)
  5. Electronic site description / On-site explanation
  6. Submission of site description materials (during on-site explanation)
  7. Bidding (electronic bidding/sealed bidding)
  8. On-site confirmation (in case of electronic site explanation)
  9. Company selection (internal consultation)
    1. Bid progress notice
    2. Selected company confirmation
  10. Contract
  11. Dispatch

Bidding participation criteria

Bidding participation criteria
Classification Bidding participation criteria
Required criteria License criteria: Companies with a valid license for the applicable construction type
Construction capacity amount: The construction capacity must exceed the expected bidding execution amount by at least 1.5 times
Recommendation criteria On the basis of the classification of standard construction types, it is suggested that our fully registered companies be arranged by construction type. Participating companies are registered in order for each construction type that we place an order for. (However, companies registered for local construction are recommended according to local order when placing an order for the local region (at least 1 company)) E.g. When placing an order for Changwon construction: 2 companies registered for each construction type; 1 company in the Changwon area → Recommended according to each order
Companies with excellent performance evaluation results, companies with excellent bidding competitiveness, and companies with a small number of bids are recommended in order

Low-cost subcontracting deliberation

Low-cost subcontracting deliberation
Classification Key details
Purpose Prevention of insolvency among partners due to excessive competition
Enhanced construction quality and safety management by means of appropriate payment
Shared growth and mutual Cooperation with partners through assured adequate profits
Subjects of low-price deliberation Less than 85% of the execution amount or 10% of the next-ranked company
Exclusion from low-price deliberation If the lowest bidder is within the execution price and the next highest bidder is higher than the execution price or the average bidding price
If the minimum bid is over 85% of the average bid price (however, if the difference between the bid and the next highest bidder exceeds 10%, eligible for low-price deliberation)

Supplier evaluation system

Partner evaluation system
Classification Key details
Performance evaluation overview Evaluator: Site / Relevant department
Evaluation period: 2 times per year
Evaluation targets: Companies that have participated in construction on a site for over a month in the current year
  • Evaluation fields
  • Quality, environment and safety
  • Construction and general management
  • Partners' headquarters

Excellent suppliers

Excellent suppliers
Classification Key details
Qualifications As a result of performance evaluation, the top 20% of companies by construction type
Excellent suppliers The final decision is made through an annual internal review of the top 20% of companies by construction type
Benefits Able to submit bids for all construction types (excluding local construction)

Registration and Cancellation

Registration and Cancellation criteria

Registration and Cancellation criteria
Classification Key details
Selection for registration

Depending on the outcomes of the performance evaluation: selection of companies subject to the cancellation of registration, reevaluation of registration, and maintenance of registration

  • Cancellation of registration: Companies excluded from partner evaluation
  • Reevaluation of registration: Existing partners subject to the same evaluation as new companies, with no additional incentives
  • Maintenance of registration: Companies whose registration is extended if there are no disqualifications among the updated partner data during the recruiting period
Cancellation of registration
  • Companies found to have less than 60 points as a result of performance evaluation (Confirmed after internal deliberation)
  • Companies deemed unable to operate normally (e.g. bankruptcy, reconciliation, court receivership, cancellation of construction business registration, suspension, closure)
  • Companies whose registration has been revoked on the basis of disciplinary standards such as quality, safety, ethical issues, and environmental law violations
  • Companies that significantly disrupt subcontracting order, such as those engaging in collusion and dumping
  • Companies that caused considerable social controversy
  • Companies deemed unsuitable as a result of due diligence on partners
  • Companies that have changed hands or been acquired during the registration period (Whether or not to succeed the registration is determined via deliberation)
  • Companies whose contracts were terminated due to noncompliance with the contract terms
  • In the event that a site has received a corrective action request with the same content more than three times in one year
Re-deliberation of registration
  • Companies with a score of less than 60 points based on the headquarters evaluation
  • Companies with no established performance during the previous two years
  • Companies with poor credit rating and cash flow (Grade B or C or lower, respectively)
  • Companies subject to discipline equivalent to ban from participating in bidding 6 months or more
  • Companies with poor bid rankings over the previous year

Confirmation of registration

Confirmation of registration
Classification Key details
Registration notification
  • Notice via Hyosung Heavy Industries Construction PU Electronic Procurement System
  • Individual confirmation of registered companies, both new and existing
  • Issuance and printing of registration certificates for Hyosung Heavy Industries partners
Notice of cancellation of registration
Notice of cancellation of registered company
  • Sending an official notice to the canceled company within 15 days of the confirmed cancellation
Procedure for the cancellation of a registered company
  • A company has 15 days after receiving the official notice of cancellation to file an objection (objection can be raised only for legitimate reasons)
Confirmation of registration The registration status can be checked via the Hyosung Heavy Industries Construction PU Electronic Procurement System Partner Company Registration - Partner Company Registration Certificate (printing available to registered companies)