Risk Management Samsung Electronics manages financial risks
by conducting an annual evaluation of suppliers’ credit ratings
based on their financial data through a third-party credit rating
agency. Based on the results, Samsung strengthens the monitoring
of suppliers with low credit ratings, and also strengthens
the management of suppliers by pre-analyzing the impact
of the credit risks on transactions with them. In 2014, about
2.4% of total suppliers received credit rating less or equal to
level 4 according to D&B credit rating agency. Regarding the
environmental & safety risk of suppliers, the company selected
and manages eight items with which each operation site must
comply. Samsung also requires the achievement of ISO14000
and OHSAS18000.
Based on the supplier risk analysis in 2014, Samsung separately
manages 6.6% of suppliers which had risks identified, and conducts
a regular monitoring of their improvement. In addition, the
company has operated the Eco-Partner Certification System since
2004 in an effort to check whether its suppliers use hazardous
chemical substances.
and provided open period to make adjustments with on-going
improvements. Suppliers with high ratings at the annual evaluation
based on the eight items are given preferential allocation of
supply for the following year and the opportunity to participate
in the supplier support program. Those with low ratings are required
to present specific plans for improvement, and should
there be no improvement at the following evaluation, they go
through the process to discontinue the transaction