0. Procurement Policy Monthly Report
CONFIDENTIAL
Procurement Policy Monthly Report
HYUNDAI MERCHANT MARINE Co. Ltd.
March 2012
Purchasing Team / Strategic Purchasing Part
Feb Based Data

1. Table of Contents Ⅰ. The Purpose of the Procurement Policy
Ⅱ. The Summary of Key Indicator
Ⅲ. The Summary of Monitoring
A. Spend Ratio Summary (Feb. 2012)
B. Spend Analysis
C. Contract Management (Mar. 2012)
Ⅳ. Procurement Policy Monitoring
- Re-selection of CPO Target Suppliers for 2012
※ Appendix
- Supplier Evaluation Manual
- Vendor information Manual
- Contract Management Manual 1

2. Ⅰ. The Purpose of the Procurement Policy
CPO
CPO [Chief Procurement Office]
An organization which carries out the monitoring and guiding on the company-wide cost management and procurement processes
in relation to procurement of all goods and services at HMM
Contract Service Provider
Helper
Watcher
Carrying out entire procurement operation
from establishing a procurement strategy to making
decisions and concluding contracts
Establishing a procurement strategy,
Monitoring, managing and controlling the overall procurement procedure
Monitoring, managing and controlling
the overall procedure of procurement
Acquiring visibility on all procurement activities carried out at HMM

3. Ⅰ. The Purpose of the Procurement Policy
CPO Policy
Monitoring
* Acquiring visibility on all procurement activities carried out at HMM : Total 19 Services
* Through diversification of the supplier base, should promote price competition among suppliers
* Differentiating each supplier according to the supplier evaluation result and strategic importance
* Minimizing the potential internal and external risk
☞ Sending Procurement Policy Monitoring Report every month
Indicators
Definition
Unit
Formula
Remarks
Supplier Evaluation
Evaluating Major Suppliers
on a Regular Basis
(Target Suppliers: Upper 80% of
Total Purchasing Amount)
Evaluated Suppliers
∑(Evaluated Suppliers)
∑(CPO Target Suppliers)
* Evaluate the target suppliers
at least once a year
* The supplier should be
evaluated more than 3 people.
Contract
Management
Acquiring Visibility
on Procurement Operation
New & Updated
Contract
Check the Contract
Uploaded in ELMS system
* Check the contract
effective date
* Check the contract amount of
new & updated contract
Spend Ratio
Checking Spend Ratio of
CPO Target Suppliers’
purchasing amount
Total amount of
CPO Target suppliers
∑(CPO Target Supplier’s Amount)
∑(Total Purchasing Amount)
* Keep 80% Spend Ratio

4. Ⅱ. The Summary of Key Indicator
Supplier Evaluation (Feb.)
Contract Management (Mar.)
Spend Ratio (Feb.)
[No. of Suppliers]
[Million U$]
The number of the contract from Jan. to Feb.
Spare parts
(7)
New van
(5)
Fuel & Lub.
(8) 5 6 32
5.40 12
Feeder
4.29
Feeder
(16) 13
1.11
장기임차
Target Supplier
Incomplete
Complete
Total Amount
Non-Target
Amount
Target
Amount
There are no target suppliers’ evaluation
from February to March.
9 supplier’s evaluation will be done in April.
(Depot: 6, Bulk Agent: 3)
36 contracts were made in 2012
(Feeder, Fuel & Lub. Spare parts, New van)
Total purchasing amount is U$ 38,618,500
( The purchasing amount above is only about
New van and Feeder. “Spare parts”, “Fuel &
Lub.” contracts don’t have fixed total amount
when they make contract. It is because Fuel
price is connected to international bunker
price, and spare parts have only unit price.)
CPO Target suppliers
- Spend Ratio: 80%
- USD 4.29billion (Total USD 5.40billion)
HMM Minimum standard 80% is passed.

5. Ⅲ. The Summary of Monitoring
A. Spend Ratio Summary (Feb. 2012)
[Unit: USD]
No.
Service
Total Purchase Amount
CPO Target Amount
Spend
Ratio 1
Long term container
8,580,122
7,654,001
89% 2
Docking Repair
512,755
100% 3
Fuel&Lubricant
289,586,318
274,365,715
95% 4
New van&Reefer
13,338,500 5
Short term container
4,263,493
4,066,094 6
General Repair
772,339
49,204 3% 7
Spare parts
9,056,971
3,448,438
38% 8
Legal Insurance
3,076,463
1,903,639
62% 9
General
Administration
1,745,668
874,591
50% 10
C. Feeder
21,808,380
11,222,456
51% 11
Trucking
30,813,690
16,611,666
54%
No.
Service
Total Purchase Amount
CPO Target Amount
Spend
Ratio 12
Bulk Agent
731,169
185,921
25% 13
Terminal
110,892,110
71,644,951
65% 14
Depot / CY
6,202,431
2,017,044
33% 15
M&R
6,399,048
3,647,297
57% 16
Barge
5,141,763
3,816,374
74% 17
Bulk Stevedore
7,279,646
3,297,272
45% 18
Container Agent
4,774,267
1,279,470
27% 19
CUT
10,759,244
6,418,550
60% 20
WUT
4,356,255
3,351,117
77% 21
KHT
744,557
523,285
70%
* HMM Local brach cost will be excepted in Container agent service.
Total Amount
Total Target
Amount
Spend Ratio
540,451,005
429,961,413
80%

6. Procurement Policy 19 Services Total Purchasing Amount (Monthly)
Ⅲ. The Summary of Monitoring
B. Spend Analysis
Procurement Policy 19 Services Total Purchasing Amount (Monthly)
[Million U$]
Total
Purchasing Amount
CPO Target Amount
[Unit: million U$]
Item　
Total Purchasing Amount
207
239
262
231
285
350
268
178
321
270
246
294
CPO Target Amount
176
222
219
200
206
185
133
272
225
237
195
234
Spend Ratio
85%
93%
84%
87%
72%
70%
75%
83%
80%
The average of total purchasing amount per month is USD 264million, the average of CPO target amount per month is USD 212million.
The average of spend ratio for 2012 is 80% (Jan.~Feb Based Data)

7. New & Updated Contract (Jan.~Mar.)
Ⅲ. The Summary of Monitoring
C. Contract Management
New & Updated Contract (Jan.~Mar.)
* Contract Amount & Number of Contract (Jan.~Mar.)
* Contract Status for Each Month
Service
Contract Amount (U$)
Contract Amount Ratio
No. of Contract
No. of Contract Ratio
Feeder
25,280,000
66%　 16
44%
Fuel & Lub. - -　 8
22%
Spare parts 7
19%
New van
13,338,500
34%　 5
14%
Total
38,618,500
100% 36 28 8
※ Feeder contract amount is estimated by purchasing amount of last year.
※ Fuel & Lub. cost will be changed everyday by international bunker price.
※ Spare parts cost will be calculated as it occurs.
• 28 contracts was made in January among total 36 contracts. (78%)

8. General Administration
Ⅳ. Procurement Policy Monitoring
Re-selection of CPO Target Suppliers for 2012
CPO Target Suppliers for 2012 are updated based on 2011 data
→ Newly updated target suppliers will be evaluated by the group in charge at least once a year.
→ New evaluation plan in 2012 is like the attached file.
Evaluation Plan
No.
Service
The number of
target suppliers 1
Long term container 11 8
Legal Insurance 6 15
M&R 37 2
Docking Repair 4 9
General Administration 7 16
Barge 31 3
Fuel&Lubricant 28 10
C. Feeder 25 17
Bulk Stevedore 26
New van&Reefer
Trucking 98 18
Container Agent 55 5
Short term container 12
Bulk Agent 65 19
CUT
General Repair 13
Terminal 41 20
WUT 24
Spare parts 35 14
Depot / CY 21
KHT
Total
617

9. Ⅳ. Procurement Policy Monitoring
Re-selection of CPO Target Suppliers for 2012
CPO Target Suppliers for 2012 are updated based on 2011 data
Month
The No. of suppliers
Target Service 1 59
KHT, Depot, Mater lease, M&R 2 - 3 4 9
Depot, Bulk agent 5 24
WUT, CUT, New van (Box, RF), Bulk agent 6 36
CUT, Spare parts 7 8 55
Terminal, KHT, WUT, CUT, Depot 10
177
Terminal, KHT, WUT, Feeder, Trucking, Barge, Depot 11
154
WUT, KHT, Feeder, Fuel & Lubricant, Trucking, Barge, General repair Stevedoring, Bulk Agent, 12
103
Docking repair, Feeder, Long-term lease, Legal affairs & insurance, General Management, Trucking, Barge, Bulk agent, Container agent
Total
617

10. Ⅳ. Procurement Policy Monitoring
Spend Ratio
 Collect the total purchasing amount of 19 services using CPO system
The people who are in charge of CPO Evaluation can use ZMMR0840 in SAP program for checking
evaluation marks.
Manual for ZMMR0840
Supplier Evaluation
 Evaluate the CPO Target Suppliers at least once a year
☞ Flash manual : P. Pak ( Web page
(Check the ※Appendix for simple Ver. Manual)
☞ Follow the link Evaluation → Evaluation Plan → Vendor List
☞ Give a Total Feedback after complete every evaluation of service suppliers
 Total score of every suppliers will be presented in the next month report
Contract Management
 Figure out the contents of the contract, and it will be used as evidence if the trouble is occurred with suppliers
☞ Acquiring visibility on procurement operation: Contents of the contract
(Contract Amount, General Terms and Conditions, Contract Period, etc.)
☞ Portal log on → ELMS → Contract Review → Contract Management)
Related Mail (KOR)

11. ※ Appendix Supplier Evaluation Manual 1) Visit CPO home page,
The URL is
2) Click ‘Evaluation Plan’ under the
‘Evaluation’ menu.
3) Click the period and the service on the
Drop-down list for searching the supplier.
(Ex. October, Feeder)

12. ※ Appendix Supplier Evaluation Manual
Click the Checklist button for Evaluation.
2) Click the position and working period
on the Drop-down list.
3) Start to answer about the question.
4) Click ‘Evaluation’ tab for next step
after you complete the answer and save it.
5) After you complete the evaluation sheet,
please move on to next supplier.

13. ※ Appendix Vendor Information Manual
1) Click ‘Vendor Information’ under the
‘Evaluation’ menu.
2) Click the service name which you want to
put the information on the Drop-down list.
3) You can also put the supplier name
in the search bar.
4) Click the appropriate vendor name
on the list.

14. ※ Appendix Vendor Information Manual
1) Click ‘Edit’ for entering the information.
2) Click ‘Save’ after you complete the form.
( The items with red star should be entered
necessarily.)
* Vendor information should be completed
during supplier’s evaluation period.

15. ※ Appendix Contract Management Manual
1) Click ‘ELMS’ in system link for managing
new and updated contract.
(You can also access ‘ELMS’ using this URL)
2) Click ‘Contract Management’
in ‘Contract Review’ category.
3) Click ‘New Entry’ for entering contract
information.

16. ※ Appendix Contract Management Manual Search the vendor code
Fill the CPO Evaluation period out
Summarize the contents of contract here.
Click here and attach the contract.