Suppliers

By focusing on philosophical elements such as trust, communication, change, innovation, and a sense of a community brought together by fate, we strive to build a new future with our partners by achieving sustainable growth together, based on activities aimed at mutually-beneficial cooperation and voluntary compliance with fair trade standards. We implement support activities that aim to bring real help to suppliers by selecting 5 implementation tasks with a view to achieving win-win growth through unwavering trust.

  • Win-Win Growth Cooperation Strategy

Building a Future with Our Suppliers Challenge Toward Sustainable Growth Fair Trade / Mutually-Beneficial Cooperation Trust and Communication / Jeong-Do Management / Fair Competition Change and Innovation / Manufacturing Competitiveness / No. 1 Spirit Partners with a Shared Future / Social Responsibility / Win-Win Building a Future with Our Suppliers Challenge Toward Sustainable Growth Fair Trade / Mutually-Beneficial Cooperation Trust and Communication / Jeong-Do Management / Fair Competition Change and Innovation / Manufacturing Competitiveness / No. 1 Spirit Partners with a Shared Future / Social Responsibility / Win-Win

  • 5 Major Tasks for Symbiotic Cooperation

Win-Win Strengthening competitiveness • Support automation, informatization, and RPA • Support quality and productivity upgrades Support for next-generation technology • Support the development of components for domestic production • Technology escrow and brainstorming ideas Funding • Interest-free funds • Mutually-Beneficial Cooperation Fund • Mutually-Beneficial Payment System Provision of training and manpower • Win-Win Growth Academy • Free consulting from improvement specialists Infrastructure improvement • Supplier Grievance hotline • Support employee benefits Win-Win Strengthening competitiveness • Support automation, informatization, and RPA • Support quality and productivity upgrades Support for next-generation technology • Support the development of components for domestic production • Technology escrow and brainstorming ideas Funding • Interest-free funds • Mutually-Beneficial Cooperation Fund • Mutually-Beneficial Payment System Provision of training and manpower • Win-Win Growth Academy • Free consulting from improvement specialists Infrastructure improvement • Supplier Grievance hotline • Support employee benefits

  • | Support for Achieving the Highest Level of Global Competitiveness |

    • Since 2018, we have been sharing our accumulated know-how regarding automating production lines and building infrastructure for digitalization with to our suppliers in order to help them enhance their competitiveness in terms of manufacturing.
    • As a result, we contributed to increasing the overall productivity (output per person/hour) and sales of our suppliers, as well as creating new jobs
    • From 2020, we extended our support to second-tier suppliers to help them enhance their manufacturing competitiveness.
    • Going forward, in 2021, we plan to improve business productivity by supporting the establishment of RPA (Robotic Process Automation) with a view to accelerating the digital transformation of our suppliers.
    • Throughout the entirety of the RPA process, our experts will stay with suppliers and share with them the accumulated expertise.


  • | Support for Strengthening Next-Generation Technology |

    • Support for developing parts using new technologies and methods: We provided royalty-free use of our intellectual property, and engaged in joint technology development including new injection technology and automatic parts lifting robot technology.
    • Protection of Suppliers’ Core Technology: The core technologies of our suppliers are escrowed by a trusted government agency, thereby ensuring the protection of trade secrets and core technologies, and we cover the full cost of this technology escrow service.
    • Supplier Idea Proposal System: We operate the proposal system in order to cut back on costs by suggesting ideas about developing new technology or boosting the productivity of our suppliers, and apply these improvements to the production lines.


  • | Funding |

  • Zero-Interest Direct Financing

    • Provide suppliers with interest-free funds necessary for productivity and quality improvements, expansion of facilities, overseas expansion, and development of advanced technologies.
    • Starting in 2020, we increased financial support from a yearly amount of USD 33.9 million to USD 46.6 million in order to help our suppliers deal with the damage caused by the COVID-19 crisis.


  • Mutually-Beneficial Cooperation Fund

    • Operate a mutually-beneficial cooperation fund worth 200 billion won that provides loans at low interest rates of primary and secondary suppliers that have entered into a fair trade agreement with our company (as of 2021).
    • Starting in 2021, the eligibility for the Mutually-Beneficial Cooperation Fund was expanded to include third-tier suppliers


  • Mutually-Beneficial Payment System

    • In 2015, we introduced and began operating the mutually-beneficial payment system in order to ensure that payments for goods made by large companies to primary suppliers are safely delivered to secondary and tertiary suppliers.
    • The participation of first-tier suppliers in the system was encouraged and, accordingly, additional points were awarded through regular evaluations to suppliers that adopted the system.
    • The performance of companies in terms of mutually-beneficial payments was reflected in the requirements for joining our Mutually-Beneficial Cooperation Fund
    • We were selected as 2021 Outstanding company in Mutually-Beneficial Payment


  • | Supporting Talent Cultivation |

    • Win-Win Growth Academy: We established the Win-Win Growth Academy, which offers free training courses exclusively for employees of our supplier.
    • We provide special technical training in collaboration with local universities (Kyungnam University and Korea Polytechnics).
    • In 2021, differentiated training courses on topics such as RPA and AI are being provided in order to secure new technology capabilities for suppliers.


  • | Infrastructure Improvement |

    • Supplier Grievance Hotline: We operate the Supplier Grievance Hotline, a channel for suppliers to report corrupt conduct or unfair practices of our employee, and the reports are followed up by fact checking and appropriate measures.
    • Support for Supplier Employee Welfare: In order to promote the welfare of our suppliers’ employees, we offer a reward program called the Mutually-Beneficial Performance Sharing Fund’, provide support for the use of leisure facilities, offer incentives and tickets to sporting events, and operate an online shopping mall exclusively for the employees of our suppliers. - Efforts to promote employee welfare, including providing masks and hand sanitizers to suppliers experiencing difficulties due to COVID-19


  • Support for Suppliers’ Management of Working Environments

    • In, 2018, with a view to systematically managing on-site fire safety consulting and prevention activities, we established LG Group’s first ever fire safety management system for our suppliers
    • We conduct on-site inspections and improvement consultations once a year, and we manage improvement tasks for nonconformities by conducting activities aimed at supporting improvements, in addition to monitoring progress
    • We offer guidance to suppliers to carry out prevention activities such as carrying out special robot safety inspections aimed at preventing major disasters, disseminating safety management manuals and best practice guides, and monitoring the use of chemical substances.

  • Communication with Suppliers

    • In order to facilitate effective communication with our suppliers, our CEO or procurement executives visit them regularly to hear their opinions on expanding technology exchange and difficulties related to management.
    • We are strengthening our communication with our suppliers by operating various information sharing channels such as a website and a newsletter along with grievance resolution channel
    • In an effort to prevent major disasters, we send an official letter requesting that our suppliers manage major risks related to the working environment, safety, and health in order to raise the awareness of our suppliers regarding these issues and ultimately prevent supply chain risks.