By Jane Han
Staff Reporter
POSCO is a giant light on its feet when it comes to cooperating with small- and medium-size enterprises (SME) as its been taking the lead in providing local firms with business and technical support.
The group has been carrying out training in wide-ranging areas, including purchasing, sales, technology development, finance and education, but in June 2005, a separate SME cooperation team was created to enhance its efforts.
Since then, in order to grow together, some of the things that POSCO has been emphasizing were its benefit-sharing system, quick settlement of fees (cash payment in three days) and transfer of patent technologies.
Just six months after the SME cooperation team kicked off, POSCO received a presidential award as the best company for ``Business Coexistence and Cooperation'' in December 2005.
The award, established by the Federation of Korean Industries (FKI) and the Korean Federation of Small and Medium Business (KFSMB), credits firms that enhance the global competitiveness of local businesses through working together.
The world's fourth-largest steel maker was awarded for its procurement/sales cooperation and manpower exchanges with SMEs.
In 2006, the company held the 5th Large Companies Management Know-How Conference and shared its insight with SMEs and tightened its cooperation network with them.
Through the session co-hosted by the FKI and KFSMB, the steel maker transferred its strategic management, personnel and technology innovations to the participating companies.
POSCO was the fifth host of the conference, preceded by Samsung Electronics, LG Electronics, SK Group and Hyundai/Kia Motors.
At the event, the company introduced its process innovation (PI) and thoroughly explained its benefit sharing system to increase orders to SMEs, in which the it jointly improves and shares accomplishments, as well as fostering manpower for growth.
POSCO President Chung Joon-yang said at the event, ``Today's management environment has been converted from individual competition to network competition, and it is difficult for large companies to survive on their own.''
A few months after the conference came another meaningful event where POSCO established a Techno Partnership with 37 local companies, including Shinil and Intech, in Pohang in September 2006.
This made POSCO the first local company to offer ``customized technological support'' to small businesses.
In cooperation with Pohang University of Science and Technology (POSTECH), the Research Institute of Industrial Science & Technology (RIST), Pohang Techno Park, the steel producer set up a system to organize a technology advisory and provide free support to meet the needs of SMEs.
The advisory, which serves as the rock of the partnership, consists of 592 Ph.D.s and specialists, and the participating companies receive onsite technological consulting and customized support to maximize the potential of their manpower, technology and equipment.
``The program has shown success and recently expanded to the Gwangyang region with almost 60 participating companies,'' said a company spokesman, adding that the partnership focuses on the SMEs' long-term improvement, rather than short-term profits.
Another ongoing effort is a purchase guarantee system to push product development for smaller companies.
If a local company develops a product that POSCO has been importing from overseas, the steel maker guarantees purchases through a set period of time so that the new item can settle in the market.
After POSCO signed an agreement with the Small and Medium Business Administration (SMBA) in 2005, a total of 22 of these contracts have been enacted so far.
Through such partnerships, the companies strengthen their business, while POSCO secures a solid supplier.
``These ties help both parties benefit from each other and the company is looking to explore further businesses that can interact with the SMEs,'' said the spokesman.
The steel powerhouse is also working together with the companies in research, as it continues to provide financial support and carry out co-studies with other firms.
Since 1999, POSCO had channeled more than 12 billion won in research funds to SMEs.
``When an SME develops a new product supported by POSCO, it receives a ticket to becoming a supplier for the company,'' said the spokesman, explaining that the SME wins business security, while POSCO can trust product quality and stable supplies _ making another win-win situation.
In terms of education and training, the company passed on the Six Sigma training to SMES so they can minimize costs, strengthen management and enhance product quality.
Six Sigma is a company wide campaign that was initiated by CEO Lee Ku-taek that pushes people to work smarter, not harder.
``The program is crucial as it helps companies to improve weak management points, and self-diagnose problems and cure them,'' said the spokesman.
Of the many initiatives under way, a counseling center for SMEs is a way to give practical help to developing firms as they can seek advice regarding various business issues.
``The center has been up and running since July 2005, along with an online forum and hotline so that the company can keep its ears open to any complaints that SMEs have in working with larger companies,'' the spokesman said.