Professional Profile: Christine S. Breves, Vice President, Procurement, Alcoa Global Business Services
Staff -- Purchasing, 1/15/2004 2:00:00 AM
Title: Vice President, Procurement, Alcoa Global Business Services, Pittsburgh, Pa.
Responsibilities/background: Breves leads the global procurement organization, covering over 350 manufacturing locations in 41 countries. "One of the things we do best is to maintain clear alignment with company goals," Breves says. She has an undergraduate degree in accounting plus an MBA. She began her career in accounting, but also has experience in maintenance management, strategic planning, materials management and purchasing.
Contributions: Breves has helped to guide a number of improvements. "One of these is that we are now very integrated into all of the functions and initiatives in the company," she says. "For example, we work with HR to source benefits." A second is making contributions and generating an impact on the company's bottom line, although, Breves notes, "We are also focused on helping to grow Alcoa's top line and other initiatives, including working capital improvement." A third is working on development of the supply management discipline at Alcoa. "It is through improving these capabilities that we have been able to make a much greater contribution," Breves says. "The company's cost-reduction goal for 2001-2003 is $1 billion, and procurement owns a significant portion of this."
Strategies
Breves outlines five important strategies. One is a disciplined global strategic sourcing process called Comprehensive Leveraging, which emphasizes the importance of sourcing at the appropriate level. The team asks questions such as: What should be sourced globally? What should be sourced in individual regions, such as Europe? What is specific to a business unit? What should be sourced at a local level? "We believe that no more than 10-15% should be sourced by individual plants, which are things that don't lend themselves to leveraging at all." Another has been to improve transaction processes. "We developed standardized best practice flow paths for each transaction type, which have helped to reduce the costs of transactions."
A third strategy involves using the Alcoa Business System (ABS), which is based on lean manufacturing. "We use ABS to eliminate waste in our internal processes and in our connections with our suppliers," she explains. One example involves reducing excess supplier inventory.
Another strategy involves working with suppliers on value creation. "Suppliers can be a huge source of value potential, but you have to create partnerships to develop this," emphasizes Breves. Fifth, the organization also places a lot of emphasis on developing the capabilities of the procurement discipline itself and developing people in the function. "The skill sets required today are entirely different than they were five or ten years ago," she notes. "Today, we separate strategic from tactical, and we provide a lot of training on the technology tools that are available to supply management today." These days, she believes, it is important for sourcing people to have experience in different disciplines.
Strategic sourcing
Comprehensive Leveraging is carried out using a seven-step strategic process. Step One identifies opportunities via detailed spend analysis. Step Two defines internal requirements and gathers market intelligence: Who are the suppliers? How much of an impact does each one have? Are suppliers trying to enter this market or exit? Where do people make money in the supply chain? Where does waste exist? Step Three develops a go-to-market strategy. Questions include: Where are we headed with this buy? What will the market look like short- and long-term, and how do we prepare for this? Step Four identifies selection factors. "A cross-functional team creates objective criteria for how suppliers will be selected," notes Breves. Step Five is go to market. This can involve using face-to-face negotiations after suppliers respond to RFPs or using various technology tools like online bids. Step Six is supplier selection and contract development. "It's important to get clearly in writing what you agree on so everyone understands and so you can measure performance against it," Breves says. Step Seven is to implement and manage the contract. Alcoa tracks implementation by location.
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