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Procurement—Approach
Procurement at Alcoa is a global function focused on delivering world-class solutions that drive increasing, sustainable value at a lower total cost to our businesses and communities.
We faced challenging business conditions in 2008 that highlighted the critical need to ensure continued focus on sustainable initiatives. The economic forecast remains extremely challenging for 2009 and beyond. As such, we will continue to seek out opportunities to establish relationships within the supply chain dedicated to achieving the economic well-being of our shareholders, our stakeholders, and the communities in which we operate.
Since 2001, we have worked to transform our procurement from a location-based, tactically focused organization to world-class global supply management. We have established a foundation of core strategies, processes, people, tools, and measures that support leveraging opportunities on a local, regional, and global basis. We have also embedded sustainability in the way we do procurement, making it an integral part of our organizational structure and core processes.
To address the need for overall coordination of the procurement sustainability strategy, we created a new role in our procurement organization—director of sustainability—in 2008 to manage this important objective.
Our procurement mission is to deliver value and a competitive advantage by promoting an innovative, results-oriented culture focused on people, customers, and supply chain. We will strive to be the strategic business partner for our customers by:
- Providing unique perspective and expertise in supply markets throughout the supply chain;
- Leveraging supplier relationships to bring product and process innovation;
- Delivering the lowest total cost of ownership for all categories globally;
- Actively managing and enhancing the skills and capabilities of our people; and
- Approaching all relationships with professionalism and integrity.
We do face challenges in our procurement efforts. These include managing a globally diverse portfolio of spend; fluctuating commodity markets, with unprecedented swings during the last six months of 2008; changing business conditions and requirements with acquisitions and divestitures; conducting business in emerging markets like Russia and China; establishing and managing globally consistent business controls and practices; and balancing near-term business needs with long-term company and organization requirements.
There is an increasing level of commitment within the procurement organization to support sustainability, from the acquisition of green products to strategically engaging the local communities in building up regional and local providers of goods and services. We are seeking to ingrain this commitment to sustainability in every procurement decision—from the initial request from the internal customer to engaging the market.
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