1. CPO Monthly Monitoring Report
CONFIDENTIAL
CPO Monthly Monitoring Report
HYUNDAI MERCHANT MARINE Co. Ltd.
May 2014
CPO (Procurement Team / Strategic Procurement Part)
Based Data : up to April 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 procurement 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’
procurement amount
Total amount of
CPO Target suppliers
∑(CPO Target Supplier’s Amount)
∑(Total procurement Amount)
* Keep 80% Spend Ratio

5. Ⅱ. The Summary of Key Indicator
Supplier Evaluation (April)
Service Performance (April)
Spend Ratio (April)
[No. of Suppliers]
[Million U$]
113
113 5
930 6
774 12
156 13
Total Amount
Non-Target
Amount
Target
Amount
Target Suppliers
Incomplete
Complete
Among the planned 113 evaluation suppliers, all has been completed.
The average scores are Bulk Agent 81, Terminal 76 and Bulk Stevedore 89. Try to stimulate the low performance supplier in order for us to get good services soon.
2 services(Terminal/CUT) are now on evaluation in May and 1 service(Terminal) will be evaluated in June.
HMM policy is performance 80% onto the evaluation vendors.
Pay keen attention to meet the target on a monthly basis.
CPO Target suppliers
- Spend Ratio: 83%
- USD 774million (Total USD 930million)
HMM Minimum standard 80% is passed.
But still keep watching on performance drop
in Bulk Agent & Master Lease.

6. General Administration
Ⅲ. The Summary of Monitoring
Spend Analysis (April 2014)
[Unit: USD]
Service No.
Service
Total Purchase
Amount
CPO Target
Spend Ratio 1
L/T CNTR Lease
28,046,859
21,884,030
78% 2
Docking Repair
2,377,182
1,176,000
49% 3
Feeder
48,332,207
37,454,932
77% 4
Truck
56,324,867
47,189,985
84% 5
Bulk Agent
1,369,392
690,751
50% 6
Terminal
279,004,692
204,206,099
73% 7
Depot
14,599,880
4,478,733
31% 8
M&R
11,853,222
6,361,341
54% 9
Fuel & Lubricant
355,937,854
353,686,115
99% 10
Barge
14,423,549
11,942,356
83%
Service No.
Service
Total Purchase
Amount
CPO Target
Spend Ratio 11
Bulk Stevedore
10,228,473
4,868,611
48% 12
Container Agent
12,219,241
1,540,293
13%
13-1
CUT
25,435,043
22,439,896
88%
13-2
WUT
36,799,736
32,105,573
87%
13-3
KHT
1,706,091
1,343,566
79% 14
New van & Reefer - 15
Short term container
10,468,041
6,060,458
58% 17
Spare parts
14,578,160
10,673,566
73% 18
Legal Insurance
4,883,493
4,686,592
96% 19
General Administration
990,806
100%
No New Van & Reefer purchase up to now
Total Amount
Total Target
Spend Ratio
929,578,787
773,779,702
83%

7. Ⅲ. The Summary of Monitoring
Spend Analysis
Procurement Policy 18 Services Total procurement Amount (Monthly)
[U$1Million]
TTL AMT of Procurement
Cost for Target Supplier
[Unit: U$1Mil.]
Item　
Total Amount
256
223
250
246
241
257
209
265
225
218
239
248
CPO Target Amount
199
180
179
166
156
160
134
173
189
181
198
206
Spend Ratio
77%
80%
78%
81%
72%
67%
65%
62%
64%
83%
The average of total procurement amount for the last 12 months is USD 248 million, the average of CPO target amount is USD 206 million.
The average of spend ratio for 12 months is 73% (Based on the data from May 2013 to Apr 2014)

8. Re-selection of CPO Target Suppliers for 2014
Ⅳ. Procurement Policy Monitoring
Re-selection of CPO Target Suppliers for 2014
CPO Target Suppliers for 2014 are updated
→ 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 Lease 8 7
Depot 44
13-2
WUT 18
2-1
Docking Repair(C&B) 2
M&R 28
13-3
CUT 9
2-2
Docking Repair(G&T)
Fuel & Lubricant 23 14
New van & Reefer 6 3
Feeder 13 10
Barge 19 15
Short term Lease 4
Truck 31 11
Bulk Stevedore 70 17
Spare parts 5
Bulk Agent 62 12
Container Agent 37
Legal Insurance
Terminal 49
13-1
KHT
General Administration
Total
494

9. Re-selection of CPO Target Suppliers for 2014
Ⅳ. Procurement Policy Monitoring
Re-selection of CPO Target Suppliers for 2014
CPO Target Suppliers for 2014 are updated
Month
The No. of suppliers
Target Service
Jan 4
KHT(4)
Feb -
Mar
Apr
113
Bulk agent-Liner OPR(26), Terminal(17), Bulk Stevedore(70)
May 14
Terminal(8), CUT(6)
Jun 8
Terminal(8)
Jul
Aug 16
Terminal(16)
Sep
Feeder(2), KHT(3), CUT(3)
Oct 98
Feeder(9), Depot(44), M&R(28), KHT(5), WUT(12)
Nov
Feeder(1), BulkAgent-Cape/Panamax(4)/Tanker(21),
Fuel & Lubricant(23), Container Agent(37), KHT(6), WUT(6),
New Van(6), Master Lease(9)
Dec
121
Long-term lease(8), Docking repair(4), Feeder(1), Trucking(31),
Bulk Agent-Handymax(4)/Dedicated Biz(7), Barge(19),
Spare parts(28), Legal Affairs & Insurance(6), General Management(12)
Total
494
※ 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 procurement 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.