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Supply Chain Management

Kia is implementing three strategies to promote shared growth: fostering global competitiveness of its partners, strengthening the foundation for sustainable growth, and establishing a culture of shared growth. We also prioritize and operate supply chain management strategies so that these strategies can be implemented systematically. In the future, Kia will continue to support the improvement of ESG capabilities of its partners, recommend compliance with behavioral norms, minimize ESG risks in the supply chain, and continue to strive for sustainable shared growth.

Supplier Code of Conduct (PDF)

Status of Supply Chain (2020)

We manage ESG level of all suppliers. Based on the transaction size, as well as the characteristics and technological level of the supplier, we select our critical suppliers and suppliers at risk. We are conducting written/on-site evaluation, monitoring, and measures for all our tier-1 partners to improve the sustainability of the supply chain.

Status of Supply Chain (2020) table
Category Description Number of companies Amount of purchase
1st-tier Total No. of 1st-tier suppliers 1,860 100%
Domestic 380
Overseas 1,480*
Critical Suppliers 62 65%**
2st-tier Critical Suppliers 20 -

* Overseas suppliers : imported parts company + companies that do business with overseas factories
** Proportion of purchases from 1st-tier critical suppliers in total purchases from total 1st-tier suppliers

Supply Chain Management System

Supply Chain Management System table
Priority Category Contents
Managed items
(Annual Management Criteria)
Quality Quality management system, incoming defects ratio, claim cost reimbursement ratio, quality management
Delivery Operational failures of production lines, delivery rate for after-sales services, delivery rate for knockdown(KD)* parts
ESG perspective
Safety Safety management manual, safety management organization/personnel, safety management training, safety accidents, risk management

* Exporting a knock-down (KD) kit containing the parts needed to assemble a product in the respective local market

To establish a systematic supply chain, Kia is implementing supply chain management policies such as quality, delivery, technology, win-win cooperation, safety management, quarantine, and eco-friendliness, and conducts supply chain evaluation to diagnose and respond to supply chain risks in advance. In particular, we are operating an evaluation process. Based on ESG issues, self-assessment(assessment done by suppliers themselves and pilot evaluation were conducted to establish an evaluation system.
The supply chain ESG management is operated for all suppliers, and we select critical suppliers and high-risk suppliers in consideration of the importance of technology and industry to promote prioritized improvement. Self-assessment is conducted for tier 1 suppliers, and written/on-site evaluations are conducted for high-risk suppliers to monitor and manage matters for improvement raised as a result of the evaluation.

Self-diagnosis for tier-1 suppliers
Written/on-site evaluation on critical suppliers and high-risk suppliers
Monitoring based on evaluation results
Analysis of result
Diagnosis of areas in need of improvement

Contingency Plans

For each emergency situation, Kia has a contingency system for supply, logistics, and production stages. Through supply chain diversification, Kia is prepared to mitigate or prevent production losses resulting from parts supply issues due to natural disasters and so on.
Generally, our parts procurement for each part is done from at least 3 or more suppliers, although it may vary according to the technical and physical characteristics of the parts.
In case imported parts are required urgently, Kia also has a flexible logistics systems that enables us to interchange between shipping and air transport at any time.
In all domestic manufacturing plants, there are buffer lines at each major sector so that a sudden stop in a production process will not affect other processes or to minimize its affect.
Each of the buffer lines have additional production capacity and storage space for at least half an hour's worth of production. Therefore, even if an accident occurs, the effect to the pre/post processes can be minimized.

Supply Chain Sustainability Goals

Supply Chain Sustainability Goals
Classification Performance Goals
2019 2020 2021 2022
Acquired ISO 45001 Occupational Health and Safety Management System Certificates for Tier 1 suppliers 98% 99% 100% 100%
Acquired ISO 14001 Environmental Management System Certificates for Tier 1 suppliers 91% 92% 100% 100%
Assessing Supply Chain ESG risk - 20% 20% 100%

Supply Chain Assessment & Correction Status

Supply Chain Assessment & Correction Status table
Classification Indicator Number of suppliers
Supply Chain ESG Assessment 1st-tier suppliers subject to sustainability risk assessment* (domestic suppliers) 380 100% 380
High risk1st-tier suppliers subject to sustainability risk assessment 19
Critical Supplier Monitoring Critical 1st-tier suppliers subject to supply chain monitoring 62
Critical 2nd-tier suppliers subject to supply chain monitoring 20
Corrective actions Sustainability high risk suppliers that completed corrective measures 19

Supplier Support Program (2021)

Kia continuously supports its suppliers through technology coaching, management consulting, training, and seminars.

Supplier Support Program (2021) Table
Category Technical Instructions (Quality Technology Support Group) Management Consulting (Supplier Support Group)
1st-tier Suppliers 26 83
2nd-tier Suppliers 37 18
Contents Technical guidance by industry Management consulting by division
Support Areas 14 industries including injection and rubber 8 divisions including R&D and production

Training Performance of Global Win-Win Cooperation Center (Job training, etc.)

454 courses

59,837 people

Status of Payments for Goods & Services

Status of Payments for Goods and Services table
Classification Payment Method Pay Period
Parts for Domestic Use SME Cash Weekly
Medium Sized Company (with annual sales under KRW 500 billion) Cash Weekly
Medium Sized Company (with annual sales over KRW 500 billion) 60-day promissory notes Weekly
Large corporations 60-day promissory notes Weekly
Exportable parts Cash Monthly