Alcoa expands its global sourcing

20 January 2009

20 January 2009 | Jake Kanter

Alcoa, one of the world's largest metal producers, will increase global sourcing and work more closely with suppliers in a bid to save $1.3 billion (£893.8 million) a year until 2011.

The US company said it was now purchasing raw materials such as aluminium fluoride and energy from a "variety of non-traditional sources" as part of a plan to fight the economic downturn.

Purchasing from countries such as China has saved Alcoa more than 20 per cent on all of the major commodities it needs for production. The firm has changed the specifications of the materials it purchases so it can become more flexible about its sourcing locations.

Alcoa is also investing in its vendors' facilities to help boost their output and has taken advantage of lower oil and gas prices by signing long term energy supply deals.

Chief executive Klaus Kleinfeld said: "We have been using Alcoa's scale and well established global supply chain to buy raw materials such as coke and caustic soda where we can find better pricing."

Other cost reduction initiatives include making 15,000 redundancies and introducing global salary and hiring freezes.


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