Customer Quality Networks Gaining a Deeper Understanding of Customer Needs

2 Talking Points  Macro Overview  Alcoa Our Story  How We Strive To Better Connect With Our Customers  Customer Quality Networks (CQNs) 14 Slides

3 A Global Organization 44 Countries 123,000 Employees 2006 Revenue: $30.4 Billion Pacific Other Americas 57%13% Europe 24% 6% U.S.

4 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.

5 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

6 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.

7 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.

Customer Quality Networks... A Win-Win Relationship Customer Quality Networks... A Win-Win Relationship How We Strive To Better Connect with Our Customers

9 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 Conversations Illustrative Customer Alcoa 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 Networks Illustrative Alcoa Quality Organization Customer Quality Organization 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

10 Attributes: Working Together Shared Sponsorship for CQN Breaks Down Barriers and Drives Efficiency Current Customer Conversations Illustrative Focus on Capabilities Focus on Needs Alcoa Quality LeaderCustomer Quality Leader Product Specification - Description - Technical - Environmental - Reliability - Mechanical Goals & Objectives Management Support Performance Measurement Accountability

11 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 CQNCQNCQNCQN = CQN Value Proposition Illustrative “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.

12 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 Framework Illustrative

13 Performance Measurement: Measuring Success Establishing standard metrics provides visibility into project performance Sales $ /Month Delivery Overall Perception Supplier Initiated MDRs Discovery MDRs Pre-Release Acceptance Rate Customer Quality Network Performance Dashboard Illustrative “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

14 Accountability: Up Against the Rails Rolling Action Items Lists Drive Systemic Fixes to Quality Issues and Concerns DescriptionSponsorPrincipal Owner Support Name Time Line For Review & NEXT UPDATE Status Action Item List UPDATE: Next Follow Up Call: Week of ____________ Rolling Action Items List Template Illustrative 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

15 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

A Q & Q U E S T I O N S A N S W E R S

17 A