Oracle Customers In The Metals & Mining Industries

Oracle Solutions for the Metals & Mining IndustriesKey Benefits Implementedrequisition-to-paysolution 20% belowprojected cost Eliminated 43 legacymaterial and capacity availability, and production schedules globally andin real-time.Oracle demonstrated its commitment to the relationship with directinvolvement of its executive management throughout deployment;strong development relationships, including the successful joint work onthe Oracle Enterprise Asset Management (eAM) application; and on-sitesupport and significant consulting resources on the ground duringdeployment.requisition-to-pay andfinance systems Reduced accountspayable transactionprocessing costs by89% Increased use ofonline procurementtool by 295% Drastically reducedreq-to-pay cycle times Converted more than10,000 monthly papercheck payments toelectronic Enabled acquiredcompany to beintegrated in 120 days Expected 25%inventory reduction Expected 15%productivity increase Expected 5% materialcost savings Expected 15% cycletime reduction Expected 20%Emphasis on Speed, Leverage, and Rate of ChangeAlcoa's first focused on deploying the solution for its req-to-pay andfinance processes, because of the significant gap to industry benchmarkgoals and the cost savings available by closing these gaps. Alcoadeployed req-to-pay and finance regionally in line with its regionalshared service structure. This approach allowed Alcoa to leverageexperience from one region to the next, accelerating the rate of change.Alcoa Europe became the first region to implement in May 2001, just 96days after completion of the common design. Using a structured 12week deployment approach Alcoa Europe completed 47 locationsacross seven countries between May and November 2001. The teamworked directly with Oracle to ensure that all European statutoryrequirements were met using "out-of-the-box" functionality.Leveraging and refining Europe's 12-week deployment approach, NorthAmerica accelerated deployment of req-to-pay and finance processes inJanuary 2002 with the target of implementing 200 locations, and addedoptimized procurement and finance processes to the deployment scope.Achieving its goal required a cross-functional team of more than 100people from finance, requisition to payment, and IT. While Alcoa definedthe mission and drove the strategy, consulting resources from OracleConsulting and BearingPoint, among others, delivered the expertise tosupport the standardized deployment process across concurrentlocations within the short timeframe. The team worked in closepartnership with deploying businesses, which appointed single points ofaccountability in each area.Alcoa achieved 110% of its aggressive North American implementationgoals, deploying a total of 217 locations. By Q2 2003, 96% of NorthAmerica will be live on req-to-pay and finance processes, and includedin Alcoa's centralized financial shared services organization. Theimplementation was accomplished at 80% of projected cost. Thedeployment generated high user acceptance across existingbusinesses. Further, the November 1, 2002 go-live of IVEX, just 120days following acquisition, demonstrated the ability of the enterprisebusiness solution to accelerate integration and cost savings, offering aviable "come-to" position for acquisitions.improvement incustomer service Expected achievementof first quintile cost forEurope integrated North America's optimized processes and refined 12week plan into its 2002 deployments. At the close of 2002, Europe wasfully deployed at its more than 85 target locations in 15 countries. AlcoaAustralia will deploy req-to-pay and finance processes in Q2 2003,followed by South America between Q3 2003 and Q1 2004.administrativeprocesses and ITShared Data and Processes Improve Business ManagementOracle's integrated technical environment provides the means toimplement common, optimized processes, sweep administrativePage 8 of 32

Oracle Solutions for the Metals & Mining Industriesfunctionality into shared services, and eliminate legacy systems. Alcoaeliminated 43 legacy systems to generate significant cost savings. Butthe true power of Alcoa's enterprise business solution extends beyondthe common platform to encompass common data and commonprocesses.Together, common data and processes strengthen Alcoa's ability tomanage its business effectively and knowledgeably, with severalbusiness benefits in req-to-pay and finance. For instance, Alcoa hasdrastically reduced cycle times by verifying receipt of goods andautomatically generating receipts for payment. It has increased thenumber of automatically generated accounts payable invoices from 43to 70%, reducing transaction-processing costs by 89%.In addition, Alcoa has centralized finance and procurement activities toachieve nearly 20% of Alcoa's worldwide cost reduction goal. Use ofAlcoa Mall, Alcoa's online procurement tool, increased by 295% in thelast year, to handle nearly 10% of all transactions. This figure willcontinue to grow as optimized processes are fully implemented and theMall becomes Alcoa's single, integrated source for purchases. Becausethe Mall process is totally electronic, more than 10,000 payments amonth have been successfully transitioned from paper check toautomatic, electronic payment.Alcoa Sets Sights on Improved Asset UtilizationTo create the next-generation asset management system, Alcoapartnered directly with Oracle, committing four Alcoa maintenanceexperts to work at Oracle for a year to develop the Enterprise AssetManagement Solution (eAM).Oracle eAM will enable Alcoa maintenance organizations to moreclosely map maintenance strategy to production requirements. All assetrequirements--from engineering design and recommended scheduledmaintenance to utilization-based requirements--will be traced andcoordinated from a single location. This single view of assets will enableAlcoa to maximize asset utilization, plan resources more efficiently andeliminate disparate legacy systems.Alcoa has implemented Oracle eAM at seven production facilities todate. Full implementation, slated for 2004, will encompass more than250 manufacturing facilities.Order to Cash Improves Product Flow, Cycle TimeAlcoa's many business lines perform most of the steps in creating itswide array of aluminum products, from mining and refining to design,engineering, and production. Alcoa's highly vertical organizationalstructure produces products to serve a wide range of industries, fromaerospace and vinyl siding to Reynolds Wrap and Alcoa wheels.The enterprise business solution order-to-cash process deploys alongthis business unit organizational structure using both vertical OracleProcess Manufacturing and Oracle Discrete Manufacturing, as well asthird-party tools that integrate to Oracle for shop floor and qualityfunctions.While the majority o Alcoa's large businesses have manufacturingsystems in place, they are disparate across and within businesses, andrequire significant interfacing and maintenance to support businessrequirements. Oracle's integrated order-to-cash solution leverages orderPage 9 of 32

Oracle Solutions for the Metals & Mining Industriesmanagement, planning, costing, quality, shipping, and manufacturingsolutions to lower costs and reduce inventory, yielding faster productflow; improve customer satisfaction; and reduce resource requirementsand eliminate legacy systems. It also enables more consistentprocesses and improves business decision making with more accurate,common data.As an example, integrated with Alcoa's ABS business system, OracleAdvanced Planning will offer insight into customer demand whencoordinating manufacturing and supplier schedules, and reduce onhand inventory requirements to meet customer orders and delivery leadtimes. Real-time information sharing along the supply chain will helpreduce cycle times and increase productivity, since all participants havemore timely and accurate information for strategic decision making.Oracle Quality will also support cycle time reductions through improvedquality analysis and a resulting decrease in rework volumes and waste.The order-to-cash solution was live at 25 sites across five business linesat the end of 2002: forgings, alumina, primary, rolling and extrusions.Order-to-cash continues to roll out at an accelerated pace.HR Optimizes People ProcessesThe common design phase for Alcoa's Global Human ResourceManagement System (HRMS) was conducted in Australia in 2002.Australia became the first region to go live on HR, payroll, andpersonnel processes in Q1 2003, using an HR portal as its front-end.Processes include assignment management, recruitment, and trainingand development.Implementing a common, global HR solution will position Alcoa toanswer global questions about the company's bench strength (includingROI), financial investments, correlations between quality and investmentin training, and headcount. For example, if Alcoa is considering anacquisition that requires a specific competency, global HR will be able toquickly assess the availability of this skill set in its existing resourcepool, enabling such HR considerations to become a factor in acquisitiondecisions.Implementation of a common, global solution also will enable Alcoa toreduce HR service delivery costs while ensuring more consistent,higher-quality customer (employee) service. The global solution willsupport Alcoa's employee service centers, HR regional and businessunits in becoming aligned management environments, where servicedelivery can be measured and compared. It will also enhance Alcoa'scapability for activity-based pricing to enable minimum standards fora

Oracle Solutions for the Metals & Mining Industries Companies need accurate information in real time, including up-to-date performance metrics, financial ratios, and profit-and-loss summaries. They need information for all departments, products, and geographies. And they