Supply Chain Management
Supply Chain Management Council
Hanco operates the Group Supply Chain Management Council to ensure a sustainable supply chain. The council is chaired by the Head of Hanco’s Procurement and Investment Division and brings together purchasing executives from Hanco and its group companies to discuss supply chain strategies, emerging issues, and risk management measures.
ㆍParticipating Companies: 11 companies, including Hanco, Hanco INTERNATIONAL, Hanco E&C, and Hanco FUTURE M
ㆍAttendees: Executives responsible for procurement at each company
ㆍMeeting Frequency: 1-2 times per year *2024 Meeting Date: October 15, 2024
ㆍMajor activities: Formulating a Group-wide ESG supply chain management strategy and coordinating joint response measures
Activities
- SCM Strategies: Develop group-wide strategies to enhance the sustainability of the supply chain by coordinating and aligning supply chain initiatives across all affiliated companies
- ESG Risks: Identify and assess potential ESG risks within the supply chain and implement measures to mitigate them
- ESG Supply Chain Trends: Disseminate the latest trends and best practices in SCM to enhance overall efficiency and effectiveness
- Sustainability Goals: Define strategic goals for building a sustainable supply chain aligned with global ESG standards, and establish detailed plans to achieve them
- Training and Capacity Building: Offer a range of training programs to strengthen ESG supply chain management capabilities
- Group-Wide Collaboration: Promote partnerships among Hanco Group companies to enhance the sustainability and competitiveness of the collective supply chain
- Monitoring & Reporting: Conduct regular monitoring of ESG performance in the supply chain and report on progress toward established targets.
Operational Status
Supplier Code of Conduct
Hanco has outlined the fundamental principles that all suppliers conducting business with the company must follow through the Supplier Code of Conduct. The Code comprises 42 provisions across five areas―labor, health and safety, environment, ethics, and management systems―based on the Responsible Business Alliance (RBA) Code of Conduct and Hanco’s internal regulations. We distribute detailed guidelines to promote understanding. In response to the growing need to enhance ESG practices across the external supply chain, we have been collecting suppliers’ signed commitments to the Code of Conduct through our e-procurement portal since 2024.
Key Provisions of the Supplier Code of Conduct
ESG Purchasing Policy
Hanco promotes sustainability throughout its supply chain by implementing a purchasing policy grounded in ESG principles.
Fair, Transparent, and Ethical Management Practices
Hanco accepts supplier registration applications at any time from companies seeking to do business with the company. In accordance with our fair trade policy, we ensure full transparency by disclosing all information related to Sourcing Groups (Purchasing Item Groups). The Internal Transaction Review Committee, established to prevent unfair internal transactions, reinforces Hanco’s commitment to ethical procurement.
Sustainable Purchasing
Hanco collaborates with global suppliers of raw coal and iron ore to develop raw material technologies to minimize environmental impact. We implement structured supply chain management practices to mitigate potential social risks associated with mineral extraction. In addition to our efforts to establish a responsible mineral sourcing system, manage ESG risks, and enhance communication with both internal and external stakeholders, we create social value through the Go Extra Mile (GEM) Fund―a one-on-one matching program with raw material suppliers―and give priority to companies with strong social responsibility practices.
Strengthening Supply Chain Capabilities
Hanco recognizes that the sustainable growth of small and medium-sized suppliers is critical to maintaining a stable procurement system. We promote technical collaboration with our suppliers, support their business operations through various programs, and help strengthen their capabilities through training and consulting initiatives.
Enhancing Purchasing Competitiveness
Hanco enhances its purchasing competitiveness by adopting a Total Cost of Ownership (TCO) approach that optimizes value across environmental, quality, and logistics considerations. We identify high-performing suppliers and offer incentives such as priority negotiation rights to strengthen supply chain resilience. We also apply item-specific sourcing strategies tailored to business impact and procurement complexity.