12 September 2008 | Jake Kanter
Hyundai Motor Company (HMC) has cut its billing times and is paying small and medium-sized suppliers in cash to help them manage high raw material costs.
In its 2008 sustainability report, the Korean automotive firm announced that it paid 8.2 trillion won (£4 billion) in cash to its small vendors last year. It also reduced payment times from 120 days to 60 days. The scheme forms part of HMC's efforts to increase supplier competitiveness and improve collaboration.
In 2007 HMC increased vocational training for vendors in areas such as engineering, technology, labour relations and ethical management. It also boosted its investment in joint procurement projects with other automotive firms, in an effort to improve the supply chain. In 2007 it spent 13.4 billion won (£6.8 million) through collaborative purchasing, compared with 2.5 billion won (£1.2 million) in 2006.
Jae Kook Choi, president of the automotive company said for a better brand, supplier relations need to be carefully considered.
"HMC actively implements co-operative management in order to grow together with its suppliers, building partnerships based on mutual trust," he added.