Alcoa Procurement Advantage provides technology solutions to enable efficient global trading connections. This includes Ariba/Quadrem B2B for electronic exchange of purchase orders, contracts, orders, and invoices. Ariba Sourcing supports sourcing events and collaboration with suppliers. Ariba Contracts will provide a global repository for procurement agreements and link to Oracle to report spend under contract. The goal is error-free, touchless collaborative commerce through a common procurement technology platform.

2. Alcoa Procurement Advantage
Technology for the Journey
Christie Breves
Alcoa Chief Procurement Officer

3. Today’s Global Trading Environment
Developing Efficient/Effective Trading Connections
Is Essential Today and Even More So in the Future
Unprecedented…
• Connectedness
• Transparency
• Timely, accurate, structured information
Unprecedented…
• Volatility and instability
• Extended Supply Chain risk
• Interdependency
Leading to…
• Unprecedented opportunity to create business
value through our collaborative trading
relationships

4. Alcoa at a Glance
• Founded in 1888
• 200+ locations
• 31 countries
• $25 billion 2011 revenue
Number of Employees
• Alcoa’s lost workday injury rate is 1/10 that of the
U.S. 24,000
average U.S. manufacturing workplace
Europe 17,000
• Award-winning sustainability leadership
Other Americas 11,000
• 120 years of aluminum technical leadership,
Pacific 7,000
including the original aluminum process
59,000

5. Procurement Evolution
From Coordination, through Transformation to Integration
1 2 3 4 5
1998-2004 2005 - 2007 2008 – 2010 2011 2012 +
Coordinated Procurement Procurement Global Financial Crisis Development of New Strategic Plan /
Transformation Strategic Plan (PACE) Full Potential Execution
• Small centralized • World class status not • Organization ready when • Develop vision • Procurement more tightly
procurement group possible with existing crisis strikes for 2015 linked to business
• Elective participation org • Leveraged new structure • Evaluate external data strategy
• Influenced BU spend • Foresaw commodity • SRTs formed, break through (trends, best • Longer-term fully
through matrix org headwinds collaboration with business practices, competition) integrated Commodity
• Began taking Enterprise customers • Identify opportunities Strategies
• Began to leverage
across locations view of procurement • Achieved $2.5B spend • Set priorities • Full potential target
across locations reduction & $300M+ setting
• Engage large part
• Global Transformation Working Capital of org in formulating • Deeper Supplier
of organization, Improvement their own future Relationships
processes and systems • Outsourcing Competency
• Confirm with
customers • Procurement Capability
Development

6. Alcoa Global Procurement Is Committed
to Continuous Improvement
• Center-led global organization
• Design globally, deploy regionally
Procurement
• Leverage COE expertise
Operations
• Follow disciplined approach Operational Service
• Demand the same of strategic partners Quality & Excellence
and expect active collaboration
• Committed to best in class status
• Technology enablers of the journey
• Quadrem/Ariba B2B Center of Commodity
• Ariba Sourcing Excellence Management
Supply Market Mgt &
• Ariba Contracts Functional Excellence
Commercial Leverage
• Technology impacts cost and value
• Supported by robust spend
management program

7. Holistic Spend Management Programs Optimize
Value to Our Businesses

8. Common Procurement Technology Platform
Enables Continuous Improvement

9. Our Vision Is Error-less, Touch-
less, Collaborative Commerce

10. Ariba/Quadrem B2B Is Critical Component in Achieving
that Vision
B2B Transactions • 2 of 4 regions complete:
$300 90 NA and AUS
80
$250
70
• EUR and SA build complete and
Count in Thousands
PO Value in Millions
$200 60
$150
50 starting supplier on-boarding
40
$100 30 • Includes electronic exchange
20
$50 of PO, CO, OR, ASN, INV
10
$0 -
• Alcoa implementation unique
USD Value # of Invoices # of POs • Built business rules into system
to address issues at the point
Over 99% of entry, rather than later
first time match
rate accuracy on • Let the system enforce your
B2B transactions best practices!

11. Ariba Sourcing Helps Us Increase
Sourcing Velocity
Sourcing Events • Supports aggressive market goals
2008 2009 2010 2011
2500 • Active in all major regions
2004
2000
1457
• 200 users ran over 2,000 events
1500 1186
in last 12 months
1000 819
500
0
AUS EUR NA SA Total
46
• Access Ariba network suppliers 100 users
and Alcoa suppliers users
• Intuitive collaboration tools
• Create, post and run 13
RFI, RFP, auctions, reverse auctions users 39
users

12. Ariba Contracts Is Being Rolled-out Globally
Repository for all Maintenance of Link to Oracle
Procurement Alcoa’s Preferred and Global Data
agreements Contracts List Warehouse for
globally spend reporting
• Documents • Align purchases • Managed spend
• Key attributes with commodity • Spend under
• Review and strategies contract
approval • Optimize value • Spend under
workflow from preferred preferred
contracts contract

13. When Complete, Our Contracts Module Will Include…
Global Integration of Contract and Spend Data
North America
Australia
Europe
Brazil
159users
48 users
61
92
1000contracts
2400 contracts
1400
400

14. Success Driven by Several Factors…
Keys to Success
• Strong vision – Errorless, touchless
1
• Structured Process
2
• Commitment and Discipline –
3 Global standard (few regional exceptions), global alignment, and metrics
• Good Partnership – Ariba and Alcoa
4

15. Where Do We Go from Here with Our Networked
Buyer/Seller Communities?
Started with enabling more Future: Enabling trading partner
efficient and consistent processes collaboration to drive top-line
to support cost management growth and mutual value