Sustainability in Supply Chain > Supply Chain Management

Responsible Purchasing Practices

Samsung Electronics is committed to responsible purchasing practices. We conduct all business operations according to the Global Purchasing Code of Conduct. By rendering basic transaction agreements obligatory, we build the basis for strengthening our suppliers’ legal compliance. Based on the system, we manage various risks, expand the scope of supply chain information management, and support compliance and mutual growth efforts for first-tier suppliers and some sub suppliers.

 
Global Purchasing Code of Conduct

The Global Purchasing Code of Conduct outlines essential regulations from our purchasing rules and manuals, along with the ethical obligations of purchasing staff. The Code supersedes other operational rules and manuals. We are committed to upholding it to ensure ethical purchasing practices, as detailed below.

  • When searching for new suppliers, we evaluate ESG performance, in addition to price competitiveness and technological advancement. Through open sourcing, we provide all global companies with sufficient opportunities to do business with us.
    (In 2024, the average transaction period with suppliers is 14 years.)
  • We finalize the unit price through the following four steps – market research, cost review, price negotiation, and price determination – based on mutual consent with suppliers.
  • When establishing new prices or renewing contracts, we consider changes in raw material costs and labor rates.
  • We do not require suppliers to provide their technical data to us or a third party for reasons regarding the transaction – price review – without justifiable grounds.
  • We provide demand forecasts for materials required for mass production in advance to allow suppliers to make necessary preparations.
  • We operate a system-based automated ordering system based on agreed order quantities, lead times, etc. with suppliers.
  • We adhere to the principle of acquiring 100% of the ordered quantity. We prohibit any unilateral changes or cancellations to the quantity and delivery date without the supplier’s consent. If a change is necessary due to product discontinuation, specification changes, or demand changes, we negotiate with the supplier through the order change process.
    (In 2024, approximately 40% of all automated orders were adjusted through mutual agreement with suppliers after being placed.)
  • We determine and deliver all payments in consultation with suppliers pursuant to the terms and conditions specified in individual contracts.
    (In 2024, we completed full payments to all 579 of our small and medium-sized suppliers in South Korea within 10 days.)
 
Standard Supplier Contract

Samsung Electronics utilizes a standard contract framework established by the Korea Fair Trade Commission (KTFC) for South Korean suppliers. This framework addresses subcontracting laws, market conditions, and compliance. For contracts with suppliers outside of South Korea, we use a global contract, to be signed between Samsung’s local corporation and their supplier. To ensure accessibility for local suppliers, our global contracts are provided in multiple languages, including English, Chinese, and Vietnamese, in compliance with local legal requirements.

Our contracts include clauses on compliance with the Supplier Code of Conduct* and greenhouse gas management to help suppliers enhance their sustainability efforts. Additionally, they feature anti-corruption provisions to ensure fair-trade practices and environmental safety clauses to prevent workplace accidents.

* Requires compliance with obligations such as prohibiting child and forced labor, adhering to legal minimum wage standards, and following policies on minerals sourced from conflict-affected areas
 
System-based risk management

Samsung Electronics strives to operate a sustainable supply chain by promptly addressing potential internal and external risks. We have identified potential risk areas, such as suppliers, corruption, and natural disasters, and mitigated these risks based on the system.

  • Supplier risk
    • - Through our system, we regularly and proactively monitor and manage our suppliers’ financial status, labor and human rights performance, environmental impact, health and safety, and responsible mineral and hazardous substances use.
  • Corruption risk
    • - We ensure transparency by systematically preventing any abnormal business processes that may be related to corruption.
    • - We regularly conduct on-site audits and monitor compliance with fair trade and subcontracting laws.
  • Natural disaster risk
    • - We obtain relevant information from major global disaster information agency
 systems, including the Global Disaster Alert and Coordination System (GDACS) 
 and the United States Geological Survey (USGS).
    • - In the event of a disaster, we analyze its impact on the supply chain using 
 suppliers’ location details registered in our system. We automatically share this 
 information with the purchasing manager.
 
Sub supply chain management

To address increasing supply chain volatility and uncertainty, Samsung Electronics is expanding our information management beyond first-tier suppliers to include sub suppliers of key materials. Using our system, we map major suppliers with supply chain data (Supply Tree) by product category, creating a comprehensive supply chain map. By leveraging collected data, including actual manufacturing site details, we can respond swiftly to various supply chain challenges.

Furthermore, to promote fair-trade practices, we require first-tier suppliers to support and oversee their sub suppliers in accordance with the Samsung Electronics Supplier Code of Conduct. We help sub suppliers strengthen compliance management through initiatives such as signing standard supplier contract, improved payment terms, adherence to labor and human rights regulations, the establishment of safe working environments, and the advancement of fair-trade practices.

Last updatedJune 27, 2025