1. CPO Monthly Monitoring Report
CONFIDENTIAL
CPO Monthly Monitoring Report
HYUNDAI MERCHANT MARINE Co. Ltd.
December 2013
CPO (Purchasing Team / Strategic Purchasing Part)
Based Data : up to November 2013

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 (November)
Contract Management
Spend Ratio (November)
[No. of Suppliers]
[No. of Contract]
[Million U$]
218 34
184 5
2,657 6
1,945 12
712 13
Total Amount
Non-Target
Amount
Target
Amount
Target Suppliers
Incomplete
Complete
The number of the contract from system as of today
Among the planned 218 evaluation suppliers, 184 has been completed in time while Container Agent failed to complete.
The average scores are Feeder 69, Bulk Agent 84, Terminal 69, Fuel 80, Bulk Stevedore 91 and New Van 83. Reflect the result for 2014 target suppliers getting rid of the low performance ones under the score 80.
170 target suppliers’ evaluation has been doing in Dec.
In total, 76 contracts have been shown in ERP.
Contract uploading system in ELMS has been improved currently. So we urge you again to do the uploading 2013 contract in ELMS as soon as possible.
CPO Target suppliers
- Spend Ratio: 73%
- USD 1,945million (Total USD 2,657million)
HMM Minimum standard 80% is failed due to regression of Feeder, Bulk Agent and Barge services.

6. General Administration
Ⅲ. The Summary of Monitoring
Spend Analysis (November 2013)
[Unit: USD]
Service No.
Service
Total Purchase
Amount
CPO Target
Spend Ratio 1
L/T CNTR Lease
57,064,787
47,674,776
84% 2
Docking Repair
12,128,028
10,239,734 3
Feeder
103,017,297
58,355,795
57% 4
Truck
140,346,606
61,747,627
44% 5
Bulk Agent
6,484,406
1,934,403
30% 6
Terminal
724,380,356
432,164,538
60% 7
Depot
38,383,531
8,097,396
21% 8
M&R
31,811,477
17,784,353
56% 9
Fuel & Lubricant
1,154,584,263
1,058,832,977
92% 10
Barge
29,578,923
10,177,142
34%
Service No.
Service
Total Purchase
Amount
CPO Target
Spend Ratio 11
Bulk Stevedore
66,562,814
40,478,299
61% 12
Container Agent
29,361,095
2,535,207 9%
13-1
CUT
72,172,274
65,054,592
90%
13-2
WUT
97,158,650
60,360,130
62%
13-3
KHT
4,724,251
3,726,619
79% 14
New van & Reefer - 15
Short term container
30,814,850
18,814,690 17
Spare parts
36,528,325
25,193,356
69% 18
Legal Insurance
19,243,283
18,950,136
98% 19
General Administration
2,648,409
2,591,704
No New Van & Reefer purchase up to now
Total Amount
Total Target
Spend Ratio
2,656,993,624
1,944,713,473
73%

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
353
229
241
258
246
256
223
250
257
209
Cost for TGT Supplier
387
185
192
199
197
180
179
166
156
160
134
Spend Ratio
110%
81%
80%
77%
78%
72%
67%
65%
62%
64%
The average of total purchasing amount for the last 12 months is USD 251 million, the average of CPO target amount is USD 194 million.
The average of spend ratio for 12 months is 76% (Based on the data from Dec 2012 to Nov 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 35 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
545

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
170
Long-term lease(9), Docking repair(6), Feeder(7), Truck(35),
Bulk Agent-Dedicated Biz, Handymax(17), Terminal(8), Barge(41),
Spare parts(27), Legal Affairs & Insurance(6), General Management(14)
Total
545
※ 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.