POSCO has been the No.1 steelmaker in the world for seven consecutive years. This remarkable achievement has been possible because of QSS+, which has allowed continuous improvements to be made in workplace environments, along with increases in facility competitiveness. This is the result of both tangible and intangible efforts made by the employees who created QSS+, the unique innovation DNA of POSCO. QSS+ originally evolved from previous programs Six Sigma and QSS.

QSS+ can be attributed to POSCO being able to maintain its competitive edge, regardless of crises. Over the past decade, employees have managed to reduce the rate of fine dust generation as well as facility complications and unexpected glitches. They have also boosted the operation ratio to 95% by focusing on completing over 8,000 assignments dedicated to improvement under the slogan, “We will protect our facilities ourselves.” The continuous efforts to undertake these types of assignments have also contributed to nurturing suitable talents for each site, improving trust between employees and establishing a positive organizational culture.

QSS+ is a derivative of Six Sigma and QSS. Having been adopted by global companies such as GE and Sony, Six Sigma is a management strategy for innovation that has been considered quite effective. POSCO determined Six Sigma as being useful for realizing financial achievement. However, it was difficult to learn and apply into the daily work process, which led to the establishment of POSCO’s unique innovation program, QSS+, in 2005.

POSCO operated a trial plant for about a year to confirm the effectiveness of the program, and officially started using QSS in May 2006. As QSS was suitable to use at sites and easily accessible by all employees, it helped companies in POSCO foster a culture dedicated to maintain healthier facilities.

QSS was adopted not only by the two main steelworks, but also by overseas subsidiaries and outsourcing partners. It has also been significantly effective in improving the environment and surrounding facilities, as well as in eliminating waste and inefficiencies. Many outside companies have requested to evaluate QSS for their own facilities. Small and medium-sized companies in areas such as Pohang, Gwangyang and Kyeongin have actually received QSS consulting from POSCO, and are noticeably improving their performance in management areas ranging from reduction in operation time and costs to enhancements in quality and productivity.

Executives and department heads inspecting facilities during the My M&S initiative activity. (Right, in November 2014)

POSCO has been carrying out its QSS+ program, which is the upgraded version of QSS, since August 2014. QSS+ is an activity program described as having been “innovated from an innovation program,” which reflects the characteristics of the facility-intensive steelworks. Moving beyond creating a clean workplace and restoring facility performance, the program focuses on improving the performance of core facilities with functions that are tailored to each department. With its focus on the three elements of Quality, Stability and Safety, QSS+ is a goal-oriented and site-driven innovation program. In particular, the company has begun a “Smart M&S” program this year which has incorporated the IoT (the Internet of Things) into My M&S in order to establish smart manufacturing sites.

POSCO has built healthy manufacturing sites through continuous innovation activities over the past decade. It will enhance the intrinsic value of the QSS+ program by claiming it as part of its unique innovative brand, reflecting the characteristics of each location under the philosophy, “The answers are found on site.”

QSS+, One More Step to ‘POSCO the Great’

Spreading QSS innovation activities to strengthen competitiveness of small- and medium-sized companies

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On March 21, POSCO DAEWOO (President Youngsang Kim) celebrated the launch of its new name and new corporate identity (CI) at Songdo ConvensiA Convention Center in Incheon, along with more than 1,000 employees.

Prior to the change, the company had been known as Daewoo International, since being incorporated by POSCO Group in 2010.

Presidents from POSCO Group affiliates—including POSCO E&C, POSCO Energy and POSCO ICT— attended the ceremonies, along with POSCO CEO Ohjoon Kwon and Incheon Mayor Jeongbok Yoo. The national bobsleigh & skeleton team delivered congratulatory messages on video for POSCO DAEWOO’s historic first step. The event kicked off with the unveiling of the new corporate identity, followed by the presentation of the company flag, badges and employee cards.

On March 21, POSCO DAEWOO celebrated its new company name and corporate identity, and resolved to devote all its strength to enhancing synergy with POSCO Group’s overseas businesses. Youngsang Kim, President of POSCO DAEWOO, waved the new company flag presented by POSCO CEO Ohjoon Kwon.

POSCO DAEWOO vows to enhance the POSCO Group’s value

The new CI of POSCO DAEWOO (pictured on the left) displays the company’s determination to lead in the globalization of POSCO Group by combining the POSCO brand, which symbolizes trust and innovation, with the Daewoo brand, which stands for the idea of “creative challenge.”

“POSCO DAEWOO’s new start is significant in that the unique advantages that POSCO and POSCO DAEWOO have obtained over the last half-century will be combined and embedded into the employees’ DNA,” said CEO Kwon in his congratulatory address. “I look forward to seeing POSCO DAEWOO take the initiative in making POSCO Group proud by enhancing the synergy of the company’s global businesses as a key affiliate of the group.”

“The foundation of POSCO DAEWOO is an important opportunity to solidify a sense of unity for POSCO Group, as well as to strive to create and lead the synergy of the group’s overseas businesses,” said President Young-sang Kim. “As employees and executives, let’s all equip ourselves with POSCO DAEWOO’s creative and challenging spirit, and serve as the main agents of the forward base that will develop the future value of the POSCO Group throughout the world.”

POSCO DAEWOO was founded as Daewoo Industry in 1967, then renamed as Daewoo International in 2000, specializing in international trade, project organizing, and resource development. It was incorporated into POSCO Group in 2010.

The change of name to POSCO DAEWOO will help establish it as a leading global trading company. Moreover, the company plans to actively break into new global markets as a comprehensive trading company that connects value chains in all business areas based on business know-how and abundant overseas networks that have been cultivated over a long period of time.

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[Iron is the Future] blog post series will explore the history of the iron and speculate on how it will unfold in the future.

Iron has had a significant impact on the advance of human civilization. Do you know how iron, which is now taken for granted and used widely, entered our lives in the first place?

Today, to kick off the first edition of [Iron is the Future] series, we have prepared the behind story of the emergence of iron on Earth, as well as, various origin theories of iron.

How is Iron, number 26 on the periodic table and the fundamental element of life forms, made?

Atomic number 26 Fe, a.k.a. iron, makes up 35% of Earth’s mass and 5.2% of Earth’s crust. The abundant metal is truly one of Earth’s essential building blocks.  As mentioned in our previous post, there are 3 grams of iron even in the human body. Let’s take a look at how it’s made.

Long, long time ago, in a galaxy far away, iron was born during a nuclear fusion reaction within a star. During the initial stages following the Big Bang, no elements that were heavier than hydrogen or helium existed. In other words, iron didn’t even exist in the very beginning.

Nonetheless, all elements have the tendency to return to the most stable state. In order to achieve this, elements continuously go through nuclear fusion and fission. Since iron is the most stable element in the universe, all elements naturally try to convert to it.

However, lighter elements require extreme heat to become iron through nuclear fusion, and to obtain such heat, extreme pressure is necessary. The only place that fulfills such requirements is within a giant star. Thus,  iron is  born when a giant star explodes into a supernova. This is why stars are nicknamed “Iron Factories in Space”.

How much iron is there in Earth?

Like we said, all elements have the tendency to turn into iron, the most stable element in the universe. Let’s see how much iron, one of the most widely used metals, makes up the Earth.

Iron accounts for a third of Earth’s mass. Most of it exists not in the crust, but within the core. It exists as a liquid in the outer core and as a solid in the inner core. In fact, 91% of the Earth’s core is made up of iron!

The iron within the outer core forms Earth’s magnetic field as it rotates along with the Earth. Though the force of Earth’s magnetic field is negligible compared to that of magnets, it nonetheless plays a very important role. The reason why have compasses to show us direction and help us tell north from south is due to Earth’s magnetic field!

Furthermore, the iron in Earth’s core makes our planet habitable by forming Earth’s magnetic field which protects us from solar wind.

Then why is it so important to not be directly exposed to solar wind?

The upper atmospheric layer of the Sun emits plasma, which is what we call solar wind. Plasma, in turn, is essentially for the flow of electrons and protons which is known as radiation. Space radiation, if exposed, could 1) alter our DNA which will lead to cancer; 2) take away the electrons from the atoms that form our bodies; or 3) be absorbed by the atoms. All three scenarios will inevitably make life unsustainable.  If there were no iron in Earth’s core, there would be no magnetic field to shield us and we wouldn’t be able to exist on Earth in the first place.

Are you curious about the various origin theories of iron? There are three theories about the birth of iron, let’s find out now!

Theory 1: A Mistake

The first theory is that the discovery of iron was, interestingly, a mistake. This theory posits that our ancestors mistook iron for chalcopyrite, an ingredient of bronze, which happened to be of similar shade and color. This theory becomes plausible when we assume that our ancestors already had the technology to manufacture bronze during the Bronze Age.

Theory 2: Wildfire

Next is the wildfire theory. This theory argues that a wildfire melted the iron ore that emerged on the earth’s surface, thus allowing our ancestors to discover iron. According to this theory, prehistoric humans took the now deoxidized and exposed iron ore and molded it into different shapes for use.

In general, the fire we use daily seldom goes over 800℃, which is insufficient heat to deoxidize iron ore. However, a wildfire in thick, prehistoric jungles could have been much larger and may have lasted for much longer, which makes the wildfire theory possible.

Theory 3: Meteorites

Last but not least is the meteorite theory. This theory posits that humankind discovered iron from fallen meteorites. In fact, many of the meteorites which landed on Earth contain abundant iron, which is called meteorite iron. Meteorites, which are an alloy of iron and nickel, are reported to contain 4~20% nickel and 0.3%~1.6% cobalt.

The most plausible of the aforementioned theories is the first one, which states that our ancestors mistook iron for bronze. According to ancient documents and ruins, humankind first began to use iron around BC 4,000 in the Asia Minor region. Also, evidence claims that iron refining technology existed around 3,000 B.C. in Mesopotamia and Egypt.

From cars to ships, planes, homes, various daily necessities, iron is indeed all around us. We hope this post provided some enlightenment around Iron. Look forward to our part 2 in the [Iron is the Future] series.

Following his inauguration, POSCO’s CEO Ohjoon Kwon gave a special lecture on March 22^nd about ‘POSCO the Great’. This special lecture took place at POSCO Center in Seoul and caught the public eye as it was also broadcasted to a total of 32 other locations including Pohang, Gwangyang, Song-do, Pangyo, Changwon and more. Over 2,500 individuals connected to POSCO, including employees, department managers, CEOs of external partners, tuned in to hear CEO Kwon’s speech. Read on for the passionate speech that CEO Kwon gave to elaborate on the new management philosophy of POSCO.

POSCO’s Vision, ‘POSCO the Great’!

New vision of POSCO – ‘POSCO the Great’. How was the vision born? & what does it mean?   

‘POSCO the Great’ was born through careful consideration of keywords that signify POSCO during the CEO selection interview process. At that time, I was reminded Korea’s most respected and famous ruler, ‘Se jong Daewang’ where ‘Daewang’ means “the Great”.  I wanted to apply that same phrase to POSCO as it also got good responses during the interview process. Thus, after becoming CEO, ‘POSCO the Great’ has become incorporated into our vision for the future. This is how ‘POSCO the Great’ came to be and it signifies a revival of past achievements and glorious history to continue moving forward.

Using ‘Innovation POSCO 1.0’ to Implement the ‘POSCO the Great’ Vision

“POSCO family…have pride in leading the steel industry!”

Prior to elaborating on ‘POSCO the Great’, let me say to the POSCO family…have pride in leading the steel industry. In Chinese characters, ‘steel(鐵)’ is constructed by the characters that mean gold(金), king(王) and a particle. So it means “the king of metals”. I believe that even our ancient ancestors acknowledged the wonder of steel and therefore gave the Chinese characters that meaning. As you see, from ancient times, steel has been an integral and essential element of our lives. Moreover, the total GDP of our country made by non-steel materials cannot even reach 1/10^th of the GDP accounted for by steel. So I hope that everyone here takes pride in their association with steel and helps POSCO achieve its vision for the future.

What’s the meaning of ‘Innovation POSCO 1.0’?

After I was elected as the CEO, I established ‘Innovation POSCO 1.0’ as an execution plan for overcoming the current challenges and to revive the glorious past through the vision of ‘POSCO the Great’. Why 1.0 instead of 3.0 or soon-to-be 4.0?

‘1.0’ signifies going forward as one entity, creating a new start based on differentiating ideas, and being number one in technology, sales, quality and all other aspects. I believe that if we can implement ‘Innovation 1.0’, POSCO can once again be great.

Global crisis for the steel industry and future direction for POSCO

Despite the continued crisis for the steel industry, POSCO is striving to overcome it in various ways.

Looking back at the global steel industry, the demand in China has plummeted since the 2000s, causing a huge surplus in production. In the past, POSCO’s operating profit margin reached nearly 20% but now reaches only single digit figures. Despite this difficult operating environment, POSCO has pursued various strategies to overcome this crisis.

POSCO has mobilized its business strategy to increase investments and foster innovation. POSCO has expanded its core business, steel, to cover other areas including renewable energy and also has invested in the materials industry. In addition, POSCO has invested in creating a world-class production system in the Americas, Asia and Korean markets. Furthermore, POSCO has introduced an innovative methodology for work process.

In particular, creating and applying QSS has led to increased profitability and improved performance through development of employees. POSCO has been able to be a well-respected and loved company because of its focus not only on profitability but the growth of its employees and other stakeholders.

Pictured here: CEO Kwon’s speech broadcasted to 32 locations on March 22nd

POSCO to expand abroad.  A new leap through humility, introspection and reflection

Until now POSCO has strived to create good results, however I think now is the time to take a look back at POSCO. First of all, POSCO has ranked 1^st as the world’s top steelmaker for four years in a row. It was also ranked as the most respected company by Fortune and was recognized as a global sustainable leading company for 9 consecutive years in the SAM-Dow Jones Sustainability Indices (SAM-DJSI). It was also included in World Economic Forum’s global 100 group.

On the other hand, the internal rate of return has been low for four consecutive years since 2010 making prospects for a turnaround difficult. Furthermore, market capitalization ranking has fallen from second to third. Operating profit to sales ratio decreased compared to net debt equity ratio rising and credit ratings have fallen as well. All in all, I strongly believe that it is time for POSCO to humbly take a step back to reflect.

I’d like to compare POSCO’s current state to ‘Dong-yi-bul-hwa’ – ‘同而不和’. The meaning behind these Chinese characters is acting in agreement on the outside, but not fully acknowledging on the inside. ‘Too big to fail’ is no longer valid. To rise above the current environment, POSCO must have faith in itself to take on new challenges.

3 Management Ideologies and Agenda behind ‘POSCO the Great’

3 management ideologies behind the vision of ‘POSCO the Great’…

3 management ideologies behind the vision of ‘POSCO the Great’… are One POSCO, Creative POSCO, and Top POSCO.

First of all, One POSCO puts importance on pursing business development based on shared values and seeking shared growth for customers, suppliers and society. This can be achieved through harmonious cooperation and all employees having a sense of ownership.

Creative POSCO means to propose new ideas to create new value. This places importance on going beyond traditional thinking so that new creative ideas can be developed. Through this, better customer services can be delivered to meet customer needs.

In the past Top POSCO may have meant following advanced technologies, but now the goal is to develop products and technologies that do not yet exist. Top management is about seeking success of customers based on the best talent and confidence.

4 innovation agendas based on One POSCO, Creative POSCO, and Top POSCO

‘Innovation POSCO 1.0’ includes the 4 innovation agendas that POSCO must execute in order to fulfill the three management ideologies. Since taking office, I have been emphasizing strengthening the competitiveness of the steel industry, selecting new growth business areas, improving the financial structure and management infrastructure.

Strengthening the competitiveness of the steel industry will be done by innovating value creation, production cost, quality and business structure and global management. We should especially strengthen technology-based solutions with marketing to establish differentiation from competitors and provide products that fit customers’ needs.

Although there have been many new growth businesses, there were unexpected challenges that caused delays and made profit generation difficult. We are planning to refine and strengthen the selection of new business opportunities. We will re-evaluate market attractiveness, technology competitiveness, entry barriers, and evaluation of the value of POSCO’s materials and energy.

Furthermore, the improvement of financial structure has a close association to securing profitability through improving original competitiveness of the steel industry. In terms of financial structure, business restructuring and exchanging certain subsidiaries or selling the equity holdings will help the group’s overall efficiency.

Lastly, we will innovate the management structure to renew the work process and establish a consensus for the current situation. Projects centered around professionals will create results and project team leaders will have more responsibility. Above all, we will motivate the creation of new ideas by rewarding those who propose new projects and put forth new ideas.

Since POSCO began promoting a project-based approach set out by “innovation POSCO 1.0’, 380 projects have been developed and a professional employee system has been implemented. The managing directors have decreased by more than 50%. On one hand, it has created motivation for employees to strive to become directors which will be evaluated on the performance of project-based results.

[box] Last words to share with POSCO Family..!

In order to achieve the vision of ‘POSCO the Great’, I believe that empathy of employees regarding risk is crucial. Going forward I will do my best. The time has come for ‘POSCO the Great’. The POSCO family has the innate DNA to create from nothing. This trait will allow us to begin a renewed 50 years and to continue the history of ‘POSCO the Great’.[/box]

Can you feel the hope and positive energy coming from the words of CEO Ohjoon Kwon? We hope you now have a better understanding of ‘POSCO the Great’ and look forward to your continued interest in POSCO as we set out to fulfill the vision of ‘POSCO the Great’!

]]> https://newsroom.posco.com/en/posco-family-deposited10-billion-krw-funds-charity-help-less-fortunate-2/ Mon, 30 Dec 2013 13:26:49 +0000 December 20th, POSCO made a deposit of 10 billion KRW to the Community Chest of Korea, of which was  gathered from its family companies as year-end charity funds to help the less fortunate.

The 10 billion KRW in funds comprises 8 billion KRW from POSCO, 500 million from Daewoo International, 400 million each from POSCO E&C and POSCO Specialty Steel, 300 million from POSCO Energy, and 200 million each from POSCO ICT and POSCO CHEMTECH.  30 employees attended the delivery ceremony, including Vice President Hwang Eunyeon, Vice Chair of the Community Chest of Korea, Lee Jaehu, and other POSCO and Community Chest personnel.

Vice President Hwang Eunyeon said, “There is a DNA of sharing and public good at POSCO. We will continue to implement a range of volunteer activities in local society and fulfill our social responsibilities as a company.”

POSCO has been donating year-end charity funds annually since its founding. The company has donated 10 billion won for the less fortunate every year together with POSCO-funded companies since 2007.

POSCO also established a ‘POSCO 1% Sharing Foundation’ this November to effectively manage donations collected through the ‘1% Sharing Campaign’( a charity program) in which employees donate 1% of their wages. To promote the sharing and donating culture, officers and senior managers of POSCO-funded companies have been voluntarily participating for the past two years, which encouraged the participation of other employees. Over 90% of POSCO employees joined the donation, and the overall participation rate of 26 POSCO-funded companies has been also increased. The company has also been donating via a matching grant.

‘East Asia 30’ is an event where CSR (Corporate Social Responsibility) activities of companies in East Asia are analyzed based on social, environmental, and governance structures, and 30 leading companies are selected and announced.  This year, 8 companies including POSCO were selected from Korea. POSCO received high marks for stakeholder communication and governance structure.

POSCO announced the management philosophy of becoming a ‘company loved by stakeholders’ in 2011, and established the stakeholder model ‘SPICEE’ consisting of ‘Society, Partners, Investors, Customers, Employees, and Environment.’  Based on this model, proactive stakeholder communication and transparent information sharing through the sustainability report were evaluated highly.  POSCO was also acknowledged as a leading company in governance structure as the position of the CEO and Chairman of the Board of Directors are separated, while the ‘Outside Director Ethics Code’ was established to promote responsibility and transparency of activities of outside directors.

Prior to the award ceremony on the 30^th at the 4^th Annual Asia Future Forum, POSCO CSR Division Director Yang Wonjun in his case study presentation introduced POSCO’s activities, stating “POSCO established social enterprises to enhance the self-support of those neglected in the region, and is also making efforts to support local resident self-support in regions overseas were POSCO has a presence by building agriculture training centers and dispatching Saemaul new community volunteer corps.”

Seoul City Mayor Park Won-soon, who headed the panel discussion that followed, introduced POSCO’s win-win activities with the local community and mentioned that, based on the ‘volunteer and sharing, thanks’ execution DNA of all POSCO Family employees, POSCO has been carrying out its social responsibility as a company, receiving great applause from attendees.