Customer Quality Networks
Gaining a Deeper Understanding of Customer Needs
Talking Points
 Macro Overview
 Alcoa Our Story
 How We Strive To Better Connect With Our Customers
 Customer Quality Networks (CQNs)
14 Slides
2
A Global Organization
44 Countries
123,000 Employees
2006 Revenue:
$30.4 Billion
Other Americas
Pacific
Europe
13%
24%
6%
57%
U.S.
3
At a Glance
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
Products serving: the aerospace, automotive,
commercial transportation, packaging, building
and construction, and industrial markets.
4
At a Glance
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
5
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.
6
Our Values
Integrity
Alcoa’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 safety
We work safely in a manner that protects and promotes the health and well-being of the
individual and the environment.
Customer
We support our customers’ success by creating exceptional value through innovative and
service solutions.
Excellence
We relentlessly pursue excellence in everything we do, every day.
People
We work in an inclusive environment that embraces change, new ideas, respect for the
individual and equal opportunity to succeed.
Profitability
We earn sustainable financial results that enable profitable growth and superior shareholder
value.
Accountability
We are accountable – individually and in teams – for our behaviors, actions and results.
7
How We Strive To Better Connect with Our Customers
Customer Quality Networks
. . . A Win-Win Relationship
Situation: Opening the Lines of Communication
In lieu of becoming trapped in a monologue with the customer and fielding seemingly impractical requests…
Earlier Customer Conversations
Illustrative
Alcoa’s
capabilities
within the
boundaries of
price
expectations
were left
unarticulated.
Process
Capability
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
Features
Cost
Alcoa Representative
Customer
Results: Customer Disappointment
…Alcoa piloted a process that gains proactive two way customer engagement
Customer Quality Networks
Illustrative
Quality
Leader
Alcoa Quality Organization
Quality
Leader
Customer Quality Organization
The Value Proposition
“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
Two-way communication process was first piloted between senior Alcoa and senior Customer
leadership to be proactive and to improve the customer experience.
9
Attributes: Working Together
Shared Sponsorship for CQN Breaks Down Barriers and Drives Efficiency
Current Customer Conversations
Illustrative
Focus on
Capabilities
Focus on
Needs
Product
Specification
- Description
- Technical
- Environmental
- Reliability
- Mechanical
Alcoa Quality Leader
2
1
Goals &
Objectives
Customer Quality Leader
4
3
Management
Support
Performance
Measurement
Accountability
10
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
CQN Value Proposition
Illustrative
CQNs are also cost effective
and result driven forums for
achieving key business goals
and objectives....in areas such
as quality and delivery
improvements.
C
Q=
N
Building Trust
“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
11
Leadership: Support from the Top
Management Support at both Alcoa and the Customer is a Key to the Network’s Success
CQN Management Framework
Illustrative
A mutual agreement to utilize the
Customer data to
baseline and drive all CQN
related activities
Identification and staffing with
representatives that have
meaningful contribution value
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!
12
Performance Measurement: Measuring Success
Establishing standard metrics provides visibility into project performance
Customer Quality Network Performance Dashboard
Illustrative
Delivery
Sales $ /Month
Overall Perception
80
70
200
60
150
50
100
40
50
30
0
20
Jan Feb
10
Mar Apr May Jun
Jul
Aug Sep Oct
Nov Dec
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Discovery MDRs
Oct
Nov
Dec
Pre-Release
Acceptance Rate
Supplier Initiated MDRs
Going for the Win
“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
13
Accountability: Up Against the Rails
Rolling Action Items Lists Drive Systemic Fixes to Quality Issues and Concerns
Rolling Action Items List Template
Illustrative
Action Item List UPDATE:
Next Follow Up Call: Week of ____________
Description
Sponsor
Principal
Owner
Support
Name
Time Line
For Review
& NEXT
UPDATE
Status
Key Benefits
Scheduled discussions allow for the early discovery of new issues as
well as the opportunity to track the progress of ongoing agenda items.
14
Results: A Win-Win Relationship
CQN’s Develop and Demonstrate Predictable Business Relationships
Proactive Involvement
with the Customer
Coordinated
Involvement of People
in a Structured Forum
Systematically Solving
Issues
Opportunities to Expand
to Other Customers
A Credible Basis for
Tracking Progress
Shared Actions and Key
Learnings
Consistent
Communication with
Customers
15
Q U E S T I O N S
A N S W E R S
17