Customer Quality NetworksGaining a Deeper Understanding of Customer Needs

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Talking Points

Macro Overview Alcoa Our Story

How We Strive To Better Connect With Our Customers Customer Quality Networks (CQNs)

14 Slides

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A Global Organization

44 Countries 123,000 Employees

2006 Revenue: $30.4 Billion

Pacific

Other Americas

57%13%

Europe 24%

6%

U.S.

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World’s leading producer of: Primary aluminum and alumina Fabricated aluminum Active in all major segments of the industry:

- Technology - Smelting

- Mining - Fabricating

- Refining - Recycling

At a Glance

Products serving: the aerospace, automotive, commercial transportation, packaging, building and construction, and industrial markets.

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Related businesses: Precision investment castings Food and beverage closures Electrical distribution systems for vehicles Fastening systems

Consumer brands: Reynolds Wrap® Alcoa® wheels Baco® household wraps

At a Glance

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Operating Philosophy

Future growth and success are rooted in the fundamental values of an organization.

We live our Values wherever we operate and strive for excellence in everything we do.

We measure our success by the success of our customers, shareholders and people.

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Our Values

IntegrityAlcoa’s foundation is our integrity. We are open, honest and trustworthy in dealing with customers, suppliers, coworkers, shareholders and the communities where we have impact.

Environment, health and safetyWe work safely in a manner that protects and promotes the health and well-being of the individual and the environment.

CustomerWe support our customers’ success by creating exceptional value through innovative and service solutions.

ExcellenceWe relentlessly pursue excellence in everything we do, every day.

PeopleWe work in an inclusive environment that embraces change, new ideas, respect for the individual and equal opportunity to succeed.

ProfitabilityWe earn sustainable financial results that enable profitable growth and superior shareholder value.

AccountabilityWe are accountable – individually and in teams – for our behaviors, actions and results.

Customer Quality Networks

. . . A Win-Win Relationship

Customer Quality Networks

. . . A Win-Win Relationship

How We Strive To Better Connect with Our CustomersHow We Strive To Better Connect with Our Customers

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Situation: Opening the Lines of Communication

…Alcoa piloted a process that gains proactive two way customer engagement

In lieu of becoming trapped in a monologue with the customer and fielding seemingly impractical requests…

Earlier Customer ConversationsIllustrative

CustomerAlcoa Representative

We are disappointed that the product does not meet specification requirements. Corrective action is necessary and MRB engineering review is required. Your company will be charged the additional cost we have incurred

Process

Capability

Features

Cost

Alcoa’s capabilities within the boundaries of price expectations were left unarticulated.

“Engage your strategic customers at a senior peer leadership level and build a relationship based on objective process capability, demonstrated process control, and a problem solving culture that provide practical confidence in the effectiveness of your business system to meet their needs. This allows for win – win collaboration that positively impact cost for each others businesses.” --- Alcoa

The Value Proposition

Customer Quality NetworksIllustrative

Alcoa Quality Organization Customer Quality Organization

Quality Leader

Quality Leader

Two-way communication process was first piloted between senior Alcoa and senior Customer leadership to be proactive and to improve the customer experience.

Results: Customer Disappointment

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Attributes: Working TogetherShared Sponsorship for CQN Breaks Down Barriers and Drives Efficiency

Current Customer ConversationsIllustrative

Focus on Capabilities

Focus on Needs

Alcoa Quality Leader Customer Quality Leader

Product Specification

- Description- Technical- Environmental- Reliability- Mechanical

Goals & Objectives

Management Support

Performance Measurement

Accountability

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Value Proposition: Commitment to the Customer

CQN’s Are More Near Term And ‘Grass Roots’ Oriented Than Other Initiatives In Securing Value For The Customer

CCQQNN

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CQN Value PropositionIllustrative

“The trust to solve problems for your customer is the key ingredient in creating open communication. Solving the complex set of business challenges creates the opportunities

for our customers to win. And when our customers win, we have the opportunity to grow.” - Director of Quality, Alcoa Howmet Castings

Building Trust

CQNs are also cost effective and result driven forums for achieving key business goals and objectives....in areas such as quality and delivery improvements.

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Leadership: Support from the Top

Management Support at both Alcoa and the Customer is a Key to the Network’s Success

                

Identification and staffing with representatives that have

meaningful contribution value

A mutual agreement to utilize the Customer data to

baseline and drive all CQN related activities

Assignment of CQN leaders from Alcoa and Customer

A formal kick-off session with the Customer, followed by

scheduled periodic sessions with structured agenda’s

The CQN must have Senior Management Support on Both Sides!

CQN Management FrameworkIllustrative

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Performance Measurement: Measuring Success

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Establishing standard metrics provides visibility into project performance

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Sales $ /Month Delivery Overall Perception

Supplier Initiated MDRsDiscovery MDRsPre-Release

Acceptance Rate

Customer Quality Network Performance DashboardIllustrative

“We have many other quality initiatives on the go, however some may be a little unfocused. The CQN process allows you to focus on actions, a few at a time, and drive them home so that you can have some homeruns.”

-Program Manager, Alcoa Customer

Going for the Win

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Accountability: Up Against the Rails

Rolling Action Items Lists Drive Systemic Fixes to Quality Issues and Concerns

Description Sponsor Principal Owner

Support Name

Time Line For Review

& NEXT UPDATE

Status

Action Item List UPDATE:Next Follow Up Call: Week of ____________

Rolling Action Items List TemplateIllustrative

Scheduled discussions allow for the early discovery of new issues as well as the opportunity to track the progress of ongoing agenda

items.

Key Benefits

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Results: A Win-Win Relationship

CQN’s Develop and Demonstrate Predictable Business Relationships

Coordinated Involvement of People in a Structured Forum Systematically Solving Issues

Shared Actions and Key Learnings

A Credible Basis for Tracking Progress

Consistent Communication with Customers

Opportunities to Expand to Other Customers

Proactive Involvement with the Customer

AQ&Q U E S T I O N SQ U E S T I O N SA N S W E R SA N S W E R S

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