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Posco Expands Benefit Sharing with Small, Medium Businesses
09/29/2011 - Posco is expanding its benefit sharing system to fulfill its goals of mutual growth with small- to medium-sized businesses in Korea. Posco expects the benefit-sharing pay to surpass KRW30 billion by the end of the year, compared to KRW16.9 billion being paid out in 2010.
Posco is expanding its benefit sharing system to fulfill its goals of mutual growth with small- to medium-sized businesses (SMBs) in Korea.
Posco has paid out KRW17.6 billion as of August, and the company expects the benefit-sharing pay to surpass KRW30 billion by the end of the year. This is in comparison to KRW16.9 billion being paid out in 2010.
The benefit sharing system, introduced in 2004, involves sharing the profit that occurs when a SMB completes a joint assignment with Posco based on its ideas on extending the life of a facility, cutting costs and localizing imported items.
In December last year, the system was extended to include not only first tier partners but also second and third partners, promoting active improvement for SMBs and key materials. The Quick Benefit Sharing system was also created to eliminate the prototype testing step, simplifying the procedure from eight steps to four. With the simplified process, the processing period is reduced from six months to up to one month.
Posco will pay off the results of the benefits created with its SMB partners in cash for three years, with a contract of up to three years. Posco is also supporting them financially in the production of prototypes and field applications for production improvement assignments.
In addition to monetary compensation, SMBs can make autonomous reforms and promote technology developments, while Posco can attain long-term competitiveness and enhanced quality, benefiting both groups.
