1. CPO Monthly Monitoring Report
CONFIDENTIAL
CPO Monthly Monitoring Report
HYUNDAI MERCHANT MARINE Co. Ltd.
January 2014
CPO (Purchasing Team / Strategic Purchasing Part)
Based Data : up to December 2014

2. Table of Contents Ⅰ. The Purpose of the Procurement Policy
Ⅱ. The Summary of Key Indicator
Ⅲ. The Summary of Monitoring
A. Spend Analysis
B. Supplier Evaluation
C. Contract Management
Ⅳ. Procurement Policy Monitoring
※ Appendix
- Manual for Supplier Evaluation
- Manual for Vendor information Management
- Manual for Contract Management 1

3. 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

4. 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

5. Ⅱ. The Summary of Key Indicator
Supplier Evaluation (December)
Contract Management
Spend Ratio (December)
[No. of Suppliers]
[No. of Contract]
[Million U$]
167 1
166 5
2,922 6
2,117 12
805 13
Total Amount
Non-Target
Amount
Target
Amount
Target Suppliers
Incomplete
Complete
The number of the contract from system
Among the planned 167 evaluation suppliers, 166 has been completed in time while 1 Trucking failed to complete.
The average scores are L/T CNTR Lease 81, Docking Repair 89, Feeder 69, Truck 86, Bulk Agent 83, Terminal 86, Barge 83, Spare parts 76, Legal Insurance 85 and General Administration 93. Reflect the result for 2014 target suppliers getting rid of the low performance ones under the score 80.
In total, 80 contracts have been shown in ERP.
Contract uploading system in ELMS has been improved currently. So we urge you again to do the uploading all contract in ELMS as soon as possible.
CPO Target suppliers
- Spend Ratio: 72%
- USD 2,117million (Total USD 2,922million)
HMM Minimum standard 80% is failed due to regression of Feeder, CNTR Master Lease and Legal Insurance services.

6. General Administration
Ⅲ. The Summary of Monitoring
Spend Analysis (December 2013)
[Unit: USD]
Service No.
Service
Total Purchase
Amount
CPO Target
Spend Ratio 1
L/T CNTR Lease
62,903,255
52,506,113
83% 2
Docking Repair
12,128,028
10,239,734
84% 3
Feeder
113,869,529
60,635,063
53% 4
Truck
156,616,282
74,770,433
48% 5
Bulk Agent
7,093,622
2,212,062
31% 6
Terminal
797,195,207
478,448,443
60% 7
Depot
42,322,275
8,825,414
21% 8
M&R
34,771,209
19,245,574
55% 9
Fuel & Lubricant
1,260,855,310
1,140,452,268
90% 10
Barge
34,251,605
12,582,229
37%
Service No.
Service
Total Purchase
Amount
CPO Target
Spend Ratio 11
Bulk Stevedore
73,711,122
44,971,816
61% 12
Container Agent
31,431,223
2,784,960 9%
13-1
CUT
76,328,376
68,577,204
90%
13-2
WUT
105,269,285
65,318,174
62%
13-3
KHT
5,228,307
4,136,087
79% 14
New van & Reefer - 15
Short term container
34,607,422
20,376,406
59% 17
Spare parts
40,063,407
27,910,623
70% 18
Legal Insurance
30,486,760
20,447,176
67% 19
General Administration
2,853,435
2,796,729
98%
No New Van & Reefer purchase up to now
Total Amount
Total Target
Spend Ratio
2,921,985,658
2,117,236,508
72%

7. Ⅲ. The Summary of Monitoring
Spend Analysis
Procurement Policy 18 Services Total Purchasing Amount (Monthly)
[U$1Million]
TTL AMT of Procurement
Cost for Target Supplier
[Unit: U$1Mil.]
Item　
TTL AMT of P/O
229
241
258
246
256
223
250
257
209
265
Cost for TGT Supplier
185
192
199
197
180
179
166
156
160
134
173
Spend Ratio
81%
80%
77%
78%
72%
67%
65%
62%
64%
The average of total purchasing amount for the last 12 months is USD 243 million, the average of CPO target amount is USD 177 million.
The average of spend ratio for 12 months is 73% (Based on the data from Jan 2013 to Dec 2013)

8. Re-selection of CPO Target Suppliers for 2013
Ⅳ. Procurement Policy Monitoring
Re-selection of CPO Target Suppliers for 2013
CPO Target Suppliers for 2013 are updated based on 2012 data
→ Newly updated and selected suppliers will be evaluated by the relevant parties at least once a year
→ Please refer to the attached, evaluation schedule for 2013
Evaluation Plan
Service No.
Service
The number of
target suppliers 1
Long term container 9 7
Depot 53
13-2
WUT 24
2-1
Docking Repair(C&B) 3 8
M&R 29
13-3
CUT 10
2-2
Docking Repair(G&T)
Fuel & Lubricant 22 14
New van & Reefer
Feeder 19
Barge 41 15
Short term container 12 4
Truck 32 11
Bulk Stevedore 73 17
Spare parts 27 5
Bulk Agent 82
Container Agent 31 18
Legal Insurance 6
Terminal
13-1
KHT
General Administration
Total
542

9. Re-selection of CPO Target Suppliers for 2013
Ⅳ. Procurement Policy Monitoring
Re-selection of CPO Target Suppliers for 2013
CPO Target Suppliers for 2013 are updated based on 2012 data
Month
The No. of suppliers
Target Service
Jan 4
KHT(4)
Feb -
Mar
Apr 19
Master Lease(12), Bulk agent-GAS(7)
May 6
CUT(6)
Jun
Jul
Aug
Sep 7
KHT(3), CUT(4)
Oct
121
Feeder(9), Terminal(9), Depot(53), M&R(29), KHT(5), WUT(16)
Nov
218
Feeder(3), Bulk Agent-Liner OPR, Cape/Panamax, Tank,
Heavy Lift & Project(58), Terminal(10), Fuel & Lubricant(22),
Bulk Stevedore(73), Container Agent(31), KHT(6), WUT(8), New Van(7)
Dec
167
Long-term lease(9), Docking repair(6), Feeder(7), Truck(32),
Bulk Agent-Dedicated Biz, Handymax(17), Terminal(8), Barge(41),
Spare parts(27), Legal Affairs & Insurance(6), General Management(14)
Total
542
※ It is basic schedule, so it can be changed based on mutual agreement between CPO and relevant parties in charge of performing evaluation.

10. Ⅳ. Procurement Policy Monitoring
Spend Ratio
 Collect the total purchasing amount of 18 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 Manual for Supplier Evaluation
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 Manual for Vendor Information Management
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 Manual for Contract Management
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.