Alcoa 2012 Annual Report Download - page 7

ALCOA 2012 Annual Report 5
In anticipation of Alcoa’s 125
th
Anniversary celebration this year, we
took time to reexamine the principles upon which the Company was
founded and thrives to the present day. We spoke to thousands of
Alcoans around the world to identify their hopes and dreams for
Alcoa’s future and to ask them how Alcoa’s enduring values can best
be expressed to guide future Alcoans.
The vision that best defi ned our employees’ hope for the future is
an inspiring recognition of Alcoa’s contributions to mankind: Alcoa.
Advancing Each Generation. In acknowledging that vision, we recognize
that today’s Alcoans stand on the shoulders of the generations of
Alcoans who came before us, and we are committing to carry on that
legacy for future generations.
The value statement that emerged from our examination is a
reaffi rmation of those principles that guided us for the past 125 years.
The statement focuses on the fi ve enduring values that our employees
told us should remain Alcoa’s True North for centuries to come.
Of Alcoa’s three strategic priorities, I consider the Alcoa Advantage
the priority that provides the stable foundation for Alcoa’s continued
performance. This is all about Alcoa’s unique attributes that make each
one of our business units better – creating an unbeatable competitive
edge for Alcoa’s businesses and unmatched value for Alcoa’s customers.
That parental advantage consists of fi ve major levers.
OPERATING SYSTEM
The productivity and working capital savings that enabled Alcoa’s
businesses to manage costs and cash despite the challenges of 2012
are outcomes of the Company-wide business systems grounded in
regular performance reviews with clear metrics. This provides a means
for the leaders of the separate businesses to benefi t from proven
processes, a sophisticated information technology infrastructure and
corporate centers of excellence that set best-in-class standards for
both quality and savings.
PROCUREMENT
As a buyer of more than $18 billion annually of materials and services
worldwide, Alcoa has major purchasing scale and a global footprint
that is producing value in new ways. In 2012, we upgraded our
procurement processes and business intelligence systems, providing
us the foundation to accelerate our productivity efforts. For example,
we recently recognized $48 million in savings by leveraging our
Ma’aden-Alcoa joint venture and developed an integrated carbon
strategy that will provide Alcoa over $100 million annually in reduced
raw material costs.
CUSTOMER
To measure customer satisfaction and loyalty, Alcoa uses a process
called Net Promoter Score (NPS). During 2012, our NPS score
improved by 9.5% and 14 of our 24 business units now have higher
scores than their direct competitors. A unique strength of Alcoa is our
deep and enduring relationships – from the C-Level of our customers
to the shop fl oor – with global leaders in aerospace, transportation,
power generation and packaging. These relationships help Alcoa’s
businesses to anticipate emerging customer needs and introduce to
them the innovations and solutions to meet those needs and make
our customers more competitive.
TECHNOLOGY
The strong organic growth of our businesses in 2012 is due in large
measure to innovation that provides a major competitive advantage
to Alcoa’s customers and businesses. Pulling experience from each
of our markets, the Alcoa Technical Center (ATC) is our innovation
cornerstone, developing the next generation of Alcoa products,
processes and services. The ATC has become a busy forum for visits
by customers seeking to draw on the benefi ts of our metals research
and development of proprietary alloys, processes and fi nishing
technologies. During 2012, ATC made major strides in a wide range
of areas, from advancing jet engines to breakthrough aluminum die
casting technology to using byproducts of our production process to
safely clean waste water. Since appointing a new Chief Technology
Offi cer from one of the Alcoa business units, we’ve dramatically
accelerated commercial technology applications across all our business
sectors and strengthened external licensing of technology to generate
additional revenue for Alcoa.
TALENT
In today’s world, where
information circles the
globe in nano-seconds,
I firmly believe that
people are the only
sustainable advantage.
We are finding that
Alcoa has become a
magnet for top talent
aspiring to join a high-
performance team. Ambitious professionals see a company with a
can-do attitude and tremendous career opportunities, with mobility
across diverse businesses and growth regions. Alcoans in plants and
offi ces around the world are energized and motivated, as refl ected
in the 40% rise of our employee engagement scores in the past
fi ve years. Because strong leadership is key to maintaining a highly
motivated and productive workforce, in 2012 we accelerated training
for supervisors at all our global locations. We also expanded Alcoa
Academy, our leadership learning school with a faculty of successful
leaders from across the Company, by adding a program for emerging
leaders to the existing executive and plant manager curriculum.
Besides the cross-fertilization and best practice sharing that takes
place in our training programs, we also are increasingly moving talent
across business sectors through a disciplined succession planning
process that ensures we have successors ready to move into our
300 most-critical positions.
The Alcoa Advantage
Alcoa participated in the National Society of Black Engineers’ annual
convention and career fair in Pittsburgh.
Values