Under the shared growth principle of “fostering small giants by strengthening the competitiveness of suppliers,” Coway annually conducts a comprehensive evaluation of suppliers.
Coway’s supplier evaluation assesses the supplier’s overall condition, performance, and managerial stability. Additional points are given to those suppliers that demonstrate excellent innovation activities and communication. Assessment results are classified into grades A to D. For strong suppliers (grades A and B), Coway increases the order quantity and grants them rights as executive members of consultative bodies. For weak suppliers (grades C and D), penalties such as restricted development and quantity reduction are given. Coway halts dealings with any supplier that receives a grade of D for two consecutive years.
When conducting supplier evaluation, Coway also assesses the suppliers’ CSR performance, based on which we identify vulnerabilities and carry out activities to improve them. In 2016, we conducted a comprehensive evaluation of the suppliers’ sustainability management by focusing more on the aspects of law and society, ethics, environment, and compliance management. As a result, we were able to identify weaknesses in compliance with ethics management, environmental management, and energy reduction. In response, we plan to offer CSR education to all suppliers to enhance their perception of CSR and their CSR level, while encouraging mainly C and D-grade suppliers to improve in high-risk areas.
| Category | Contents | Weaknesses and Improvement Activities |
|---|---|---|
| Human Rights/Labor Ethics Management |
No child labor/overtime/discrimination | Identify weaknesses in new evaluation items, including anti-corruption system, ethics management, environmental regulations, and energy reduction
|
| Ethics management and anti-corruption | ||
| Response to Emergency/Safety | Emergency response system, etc. | |
| Safety system and training of hazardous installations | ||
| Environmental Management | Pollutant/environment management | |
| Hazardous substance/energy reduction |
In 2016, Coway conducted a comprehensive evaluation of 71 suppliers. The results showed that the average score of the suppliers was 87.2 points, a 1.1 point increase from the previous year. The ratio of suppliers that received grades A and B was 93%, increasing by 7% from the previous year. Notably, the number of weak suppliers decreased from 10 in 2015 to 5 in 2016.
Coway biennially conducts a satisfaction survey targeting all of our suppliers. Since 2011, the level of supplier satisfaction has continually increased. In the latest survey taken in 2015, Coway scored 91.5 points. In 2016, we improved the Coway supplier win-win cooperation structure and our support for improving suppliers’ management environment and innovation by reinforcing supplier CSR and shared growth programs such as support for participation in overseas exhibitions and the Excellent Supplier Awards.
