David's Blog

My assessment

What do I think of the We All Can (WAC) program now that it's (almost) over ? Let's start with the beginning : the "selection". I thought it was nice it concentrated on the human aspects (what do you want to do later, why are you interested in this program, etc) rather than on the statistical aspects (what are your grades). It is my belief that good grades don't necessarily mean top-achiever, and bad grades don't mean "worthless". After all, jobs depend on many things (soft skills, technical knowledge, reasoning skills, memory) that aren't necessarily graded.

Then you're paired with your coach. I don't know how it's eactly, but it works : I had a great time with my coach. He taught me a lot about his job (more than I thought would have been possible in 2 days), and he kept it interesting with specific examples.

The topics serve their purpose : I was able to continue learning about my coach's job thanks to them, while communicating through e-mail. However, when I was first told that we'd have weekly topics to discuss, I thought it would have been more general topics, that could lead to interesting debates. I think that could be an intersting modification to the WAC program, as it would allow us participants to really communicate with each other and share ideas and opinions, rather than just facts.

And what about the trip to Canada ? Well, I think it's beside the point. I don't believe any of us participated in the program for the trip. I there hadn't been a trip to Canada, I still would have participated in the WAC program, and I'm gald I did. So if one day you see ads for the new version of the WAC program, give it a shot ! Don't think "I'll never be chosen" (I admit that idea went through my head, but I didn't let it stop me...), just sign up ! It's a wonderful experience and lets  you see how Alcan works "behind the scenes". And if you're from the EPFL in Switzerland, watch out, because I'll be back...

Topic 4

Each job in the company is essential to its growth. How key is your coach’s job? How does your coach assess his/her contribution? Where do the corporate values & strategic directives of the Group (EHS, Maximising Value, Continuous Improvement) impact? What challenges does your coach face? How can your coach remain motivated and productive? …

How key is my coach's job ? Well, I have to admit I don't quite grasp the question : as is mentioned in the popic every job is essential (or the job simply wouldn't exist). On top of that, my coach is a market manager (he sells the goods his plant produces). And if you can't sell the things you produce, you won't last very long...

So what's important in his position ? Well, you have to be able to "feel" the market, so you how how and when to modify the prices, or otherwise you won't have any market share. It's also very important to listen to your customers : to be able to satisfy their needs, you have to know about them and the industry in which they're evolving, as well as their industry's economical conditions. You also have to able to explain the reasons for a product's price increase, so the customer can explain it to his own boss. Otherwise, the customer will have the feeling he's "been had" and will find another supplier as soon as he can.

However, to be a good market manager, you don't have to know all the products and their specifications by heart. You do have to know what you're selling, but you can be a good market manager without knowing all the technical details.

How do the strategic directives impact my coach's job ? The directive that has the most impact on his job is the "Maximising value" directive, because he has to try and sell greater quantities while maintaining the product margins in a very competitive market. But it also impacts the whole plant, since Gardanne is trying to sell more specialty aluminas (to the polishing market, for example) that yield higher margins.

Next in line is the "continuous development" objective. It means that the production unit (above all) can produce bigger quantities, in less time (reduced time-to-market when launching a new product), and for lower costs. The production unit also directly benefits from the EH&S philosophy, as with fewer accidents comes increase productivity : the production unit doesn't have to suffer from weaknesses in the treatment chain.

So that's how my coach works, but how can he see if he's doing a good job, and how does he stay motivated ? Well he regularly reviews his objectives and performance with his boss, and then he can check on them on the computer network (they have a computer program that tracks personnel performance). What motivates him are the intergroup perspectives. For example, it would be possible for him to go to Alcan's packaging sector (he now works for the Bauxite & Alumina sector).

Well, I guess that's it for my final contribution !

Topic 3

Innovation

In what sense does your coach’s job entail “innovation”? What role does it play? What purpose does it serve? …
NB: “innovation” does not only mean “new products”…But also new ideas, organizations, processes...

Before I describe how my coach's job entails innovation, allow me to first expose the innovations' purpose : they were put into place to satisfy my coach's customers !

So now that we have that cleared up, I'll wlak you through two concrete examples of innovation that I was able to see during my Alcan day :

• Bauxaline :  the product's sales weren't even close to achieving the objectives, so my coach was told to take charge of its sales and make them increase significantly.

  Since Bauxaline's  applications were studied during 5 years, my coach's job is mostly finding a new way of selling the product to increase its widespread adoption. That means he'll mostly go after markets that have a bigger potential from the volumes point of view. That is, he'll prefer the road surfacing market to the trashbag pigment market.

  In this case, the innovation was mostly commercial : Gardanne didn't use to sell products to urban communities. So the challenge is now to find and understand Gardanne's role in this public-sector market.

• AIN : my coach was able to make each AIN representative take responsabilities where possible, which allows him to concentrate on the big picture (because he doesn't have to take care of all the details anymore). Naturally, if there is a prolbem, my coach doesn't hesitate to become involved to find the adequate solution ! And since before my coach did this, it was done differently (and less effectively), I believe it's not only an innovation, but one that allows Alcan to use its ressources more effectivly, thereby allowing it to remain competitive on a cut-throat market. After all : it's difficult to remain competitive when you're so focused on the details you can't see the market's long-term evolution !

Topic 2

To what extent does your coach’s job entail international aspects? At first sight, this may seem obvious for some jobs and surprising for others but take your time to think it over: certainly you will all have a lot to say about this!…

To tell you the truth, my coach's job as a market manager seems so international to me that I don't really know what I should write. But I'll do my best :

The two most important international aspects in his job are

• his job as market manager
• Alcan itself

Market manager
As a market manager, my coach has to deal with customers coming from many different countries (Alcan has a presence in over 60 countries and regions). He also has to be in a very close relationship with AIN (which is international by definition). So he thus has to deal with many different cultures, languages (he frequently has to negotiate in English and Spanish, besides his French mother tongue), and more importantly : many markets different both in size, potential, and growth (the speed at which the market develops).

Alcan is international
As I mentioned previously, Alcan has a presence in over 60 countries and regions. That means that its employees also come from different cultures, countries, speak different languages, and may see the same problem completely differently.

But they are all united by Alcan's philosophy, so although employees come from varying horizons, they are all part one family : if you are one of  Alcan's employees, then you share it's philosophy. And these shared beliefs are, in my humble opinion much stronger in uniting very different people and harnessing their potential for one common goal than just "working for the same company".

During my Alcan day, one of my coach's colleagues was leaving the company to travel around the world. So he was showing the man who was going to replace him around. Where did his replacement come from ? Vaudreuil, Canada. And that happens to be almost on the other side of the planet. His work experience in a different culture will probably help bring some freshness to the Gardanne plant : a new person, with new ideas, and probably different ways of doing things.

AIN

AIN : the Alcan International Network
AIN is basically a group of salespeople spread out around the world who contact potential customers, stay in touch with old customers, etc. Alcan customers communicate with Alcan through AIN. To sum it up, you could say that AIN's principal objective is to increase Alcan's market  share.

Here's the "down and dirty" organisation of AIN (as far as I've understood) :

• each country has an AIN office (usually in its captital), in which several agents work
• each agent has certain customers to take care of. The customers contact Alcan through the agent. The internal agent earns a commission on the sales that are made to the customers for which he is responsible.
• Alcan depends on AIN to develop its market share. It's the AIN agents that go out, find potential customers, and make them sign contracts

AIN is what is called a direct sales force. Here is what Geoffrey A. Moore has to say about them (taken from "Crossing the Chasm")--keep in mind it doesn't mean AIN operates in this exact same way :

The direct sales force is optimized for creating demand. At its center is a consultative salesperson who works with the client in needs analysis and then, supported by a team of [...] specialists, develops and proposes solutions, which after an additional interaction with the customer, and a competitive procurement, turn into purchase orders. This is a very expensive way to sell, with the cost of sales built into the product's price. It works reasonably well when two conditions are met.
For the customer, the key condition is that the vendor supply a broadly comprehensive and reasonable competitive set of offerings. If this condition is not met, it means that additional vendor interactions are needed. there is only so much time and effort the customer is willing to put into educating and negotiating with vendors, so breadth of product line is crucial here.
For the vendor, the key condition is both the volume and the predictability of revenues. [...] Another underlying point is the importance of what salespeople call account control but which might more accurately be termed account cooperation. Direct sales force can bring lots of service to an account, but not if they lose the deal during the competitive procurement. Basically then, for this system to work, there has to be a fundamentally uncompetitive agenda operating, a you-scratch-my-back-and-I'll-scratch-yours agreement under which vendors are granted a limited monopoly, subject to their not exploiting it egregiously and continuing to provide premium service. this confers a high degree of predictability of revenue and a lower cost of sales.

All topics

A list of all the topics I've written about
This is a list of all the topics I've written about for and about Alcan. If you're looking for other posts I have written, click on the "Archives" button on the right. As its name implies, it will take you to the archives, where all my posts await your perusal.

Now for the topics' list. Click on the link to go to the topic you wish to visit. The topic's theme is given in full below the link :

• Topic 1 :

"In the business chain, you can easily identify a company’s clients and suppliers, but what about its employees’?

Each of them also has clients and suppliers …and we are not only talking about sellers and buyers!

Though it may seem unexpected, every job at Alcan has clients and suppliers! Who are those of your coach? What kind of relationship does your coach keep with his or her clients and suppliers? What are the major purposes for these relationships?…"

• Topic 2 :

To what extent does your coach’s job entail international aspects? At first sight, this may seem obvious for some jobs and surprising for others but take your time to think it over: certainly you will all have a lot to say about this!

• Topic 3 :

In what sense does your coach’s job entail “innovation”? What role does it play? What purpose does it serve? …
NB: “innovation” does not only mean “new products”…But also new ideas, organizations, processes...

• Topic 4 :

Each job in the company is essential to its growth. How key is your coach’s job? How does your coach assess his/her contribution? Where do the corporate values & strategic directives of the Group (EHS, Maximising Value, Continuous Improvement) impact? What challenges does your coach face? How can your coach remain motivated and productive? …

Topic 1

"In the business chain, you can easily identify a company’s clients and suppliers, but what about its employees’?

Each of them also has clients and suppliers …and we are not only talking about sellers and buyers!

Though it may seem unexpected, every job at Alcan has clients and suppliers! Who are those of your coach? What kind of relationship does your coach keep with his or her clients and suppliers? What are the major purposes for these relationships?…"

My coach's job title is "market manager". What does that mean ? Well, Alcan  gives him the resposibility of selling several product categories. So who would his customers be ? From closest to furthest :

• customers who use alumina to make tiles, advanced ceramics (spark plugs, filters, etc.), and abrasives.
• distributors : they buy, recondition, and resell Alcan's products to customers that are too small to deal with Alcan directly
• My coach's boss
• The Gardanne alumina plant, la Bâthie (white fused alumina), Bayrède (brown fused alumina), Alifin (tabular alumina)
• The B&A (bauxite and alumina) group of Alcan
• Alcan

So what can my coach possibly offer his customers ? As you may know, one of Alcan's main objectives is to double the group's value every five years. How can that be done ? You can reduce costs, buy competitors, innovate, increase margins on products, increase sales, etc. Increase sales ? That sounds like it's right up my coach's alley, huh ?

Here's what he does for his customers : he achieves (or surpasses) the sales objectives laid out in the five year plan (which are in line with the overall Alcan strategy). Those objectives can be increasing sales, increasing margins on sales, or launching a new product (such as polishing-grade alumina).

Besides those already mentioned, my coach has other customers to satisfy at Alcan : his boss' boss, human ressources, colleagues. For example, he's done great things with Cyprien due ingreat part to the fact they get along very well. The commercial-R&D relationship is great and the results reflect that, which isn't the case for all of their colleagues...

Here are the different relationships my coach has with his customers :

• high trust relationships : my coach has a customer that he really trusts. Negotiations are always long and difficult, but both parties know that all arguments and propositions are honest. Therefore, when he asks for help (for example, to get more of a product in the current shortage situation), he knows that my coach is going to do everything he can to try and satisfy the customer. And when he's told about the market and the associated costs, he understands that prices are going to go up, and tries to minimize the increase ; but he doesn't outright refuse.

  The same goes for the relationship he has with his boss : if my coach has a problem, his boss helps him. If he has a difficult decision to make, they both think about it and decide together. That way, if something goes wrong my coach it's wasn't a silly decision, but a good decision gone bad due to unforeseen events.

  He also has such relationships with some AIN agents and with Cyprien.

• unstable trust relationships : some customers try to seduce  my coach when they need to, but he can tell that they'd go with another supplier from one day to the next. In fact, my coach probably wouldn't try his hardest to try and help such a customer
• trustless relationships : both parties talk to each other, but no one trusts what the other is saying. My coach doesn't have this type of customer because it's impossible to do business in such conditions. On the other hand, he has such relationships with some of his colleagues. The only reason such a relationship exists is because they have to work with one another ; if they could separate, they would... Take production, for example : when he asks whether he can offer 100 tonnes of some product to a customer, he knows the answer can't be trusted and that he has to find out by some other means or he might end up offering 100 tonnes of a product he wouldn't be able to deliver !

But if he has customers, he surely has suppliers, right ? Who could they be ? Well, I would say his major supplier is Gardanne prodcution unit : they tell my coach how much they're going to produce in the current year, and he tells them how much he intends to sell. Thy then try to find some middle ground to strike a balance between supply and demand.

When the production unit has a shortage (as is now the case, due to the current market situation), they have to tell my coach as soon as possible, so that he can inform customers. On the other hand, if a customer needs more product than he had announced, the production unit must be told immediately so they can figure out how to produce the needed quantity.

AIN  (Alcan International Network) is also a very important "supplier"--although my coach considers them as being colleagues. My coach works in close synergy with AIN : he tells them about the products, available volumes, prices, how much has been sold in other countries, etc. In other words, he's there to motivate them ! On the flip side, AIN tells my coach about the market (potential, competitors, in which way it's developing, etc.). When things get tough (product shortage, unsatisfied customer, etc.), my coach is there to help out : he doesn't hesitate to go out and see the customer to show him that the whole plant is working hard to try and satisfy them.

My coach has a special relationship with his boss : his boss is both a customer and a supplier. Here's why his role is so special :

• a customer because he "buys" my coach's yearly objectives : my coach has to "sell" what he's going to do during the year, and what he won't do. And at the end of the year, my coach is graded on how well he did, but also according to his boss' subjective perception of the environment in which my coach evolved during the year. For example, if a competitor tries to gain market share  with very low prices, but that wasn't accounted for when defining the annual objectives, my coach's boss can "grade" the performance better (as long as he knew the situation all along).
• a supplier because he has to "sell" his commercial strategy to  my coach, to motivate him, and to want to stay and work with him. After all, if someone leaves a company it's because his boss didn't give him satisfaction (naturally, it can also be due to many other causes : interesting opportunities, the organisation, or other elements the boss can't do anything about)...

I'll end this post with my coach's wise words : the key to a plant's succes is to have an absolute trust relationship between the commercial people and the production people.

Gardanne

About the plant
Gardanne (you can visit it's internet site here : http://www.specialty-aluminas.alcan.com/gardanne/webgardannev2.nsf/vwurl/Gardanne_VI) was built in 1893, and was the first plant to use the Bayer process. The Gardanne plant is one of the very few on the market to produce small series of specialty aluminas. But this philosophy was put into question when Alcan aquired the plant (it belonged to Péchiney before), because Alcan   has a plant in Vaudreuil, Candada that custom tailors products. In other words, Vaudreuil produces a unique product for a single customer and thus has long contracts ("imprisoning" the customer). On the other hand, Gardanne usualy has many customers for a given product.

After Alcan bought Péchiney, they wanted to impose that philosophy in Gardanne, too. However, Gardanne kept it's own philosophy : to replace standard metallurgical grade alumina with higher value specialty aluminas. This, in turn, means producing many different products for many different customers. In other words, Gardanne's philosphy is to value each product and each customer.

The ying and the yang
The funny thing you can't help but notice when you arrive at the Gardanne plant, is that there are clearly 2 sides : the red one, where the bauxite comes in and is broken down, and the white side, where the alumina  is sorted, etc.

As a matter of fact, emloyees will usually say they work in "the red part" or in "the white part", instead of referring to bauxite or alumina.

The market

What's a market ?

Some of you may find the answer quite obvious, but I'm reading a book by Geoffrey A. Moore called "Crossing the Chasm" (ISBN : 0-06-662002-3). It's about how to bring a new high-tech product (I'm a computer science student) to the market. It gives the following definition of market :

• a set of actual or potential customers
• for a given set of products or services
• who have a common set of needs or wants, and
• who reference each other when making a buying decision

Although the last point is very true in the high-tech market, it isn't set in stone for other markets. However it is apparently true for the polishing market (which is somewhat a niche market), so I'll continue and pass on what the author has to say about htis last point :

If two people buy the same product for the same reason but have no way they could reference each other, they are not part of the same market. That is, if I sell an oscilloscope for monitoring heartbeats to a doctor in Boston and the identical product for the same purpose to a doctor in Zaire, and these two doctors have no reasonable basis for talking to each other, then I am dealing with two different markets. Similarly, if I sell an oscilloscope to a doctor in Boston and then go next door and sell the same product to an engineer working on a sonar device, I am also dealing with two different markets. In both cases, the reason we have separate markets is because the customers could not have referenced each other.

That's why providing quality products and services is of utmost importance : the word of mouth spreads very quickly and has muchmore impact than any advertising campaign (be the effects positive or negative). And so a satisfied customer can bring more potentail customers to you and increase your market share "for free".

 

The current situation
Right now, there is a worldwide alumina  shortage. Why ? In a word, because China is buying all of it... And according to some sources, China is not only the largest user of commodities, but also the fastest-growing. And it's the same on the alumina market.

How did that impact the European market ? Well, take India for example : it used to supply Europe (because of the high buying price). But when China started buying  alumina in large quantities, it decided to supply them. And from one day to the next next, European customers were left without a supplier. So they're now looking for reliable suppliers. And guess who that could be ?

As a matter of fact, the Gardanne plant is the only supplier willing to manufacture small series of specialized alumina. It can thus ask for higher prices (due to the strong market position, and to the fact that Alcan is a reliable supplier).

Now, if you've read my post about sales, you'll remember (I hope), that Gardanne wishes to have a strong position on the polishing market before 2007. But why the rush if there's a worldwide shortage (driving the prices up) ? As you've probably guessed, the shortage won't last...

2007
In 2007, the supply and demand should once again be aligned, as new alumina plants will open, thus increasing offer.

That's why it's important for Gardanne to have a strong position before 2007 when competitors will be back on the market. To give you specific example of what already happened with another of Gardanne's products when competitors arrived on the market aggressively, I'm going to tell you about corundum  (or fused alumina) :

On corundum

In 2004, the price of white fused alumina from la Bâthie fell by 20% due to competition. Then, this year (2005), the competitors left the market (according to my coach they probably found a way to sell their products at higher margins). So this year (2005) la Bâthie can command higher prices, as there is a shortage in the supply and it is the only supplier. La Bâthie expects to see next year's (2006) price go up to € 820 per tonne.

But why is la Bâthie the only supplier ? Well, as I've already said, the other competitors left the market. But exotic suppliers are still in the game, right ? Well, no. Corundum is difficult to produce (it is difficult to sort the grains according to their size) and the Indian suppliers are not able to do it.

The sale

The sales meeting
Besides me, there were 7 other people present. On this picture, that would be (from top left, clockwise) : me, Caroline, Thierry, Cyprien, Frits, Dieter, and Oliver.

Now that you know what their names are, let's get on to telling you what they do :

• Caroline works for the Research & development departement. She recently worked on the polishing test the plant uses to determine the quality of the alumina  they sell to the polishing market. She also participates in technical support.

• Thierry is my coach. You can learn more about him here. He hopes to develop the polishing business through this meeting.

• Cyprien is the development coordinator for polishing, laminates, blasting, and surface treatment. He's also a green belt (i. e. : he spends roughly 25% of his time increasing the plant's efficiency).

• Frits is a black belt (that is, he spends ALL of his time increasing the plant's efficiency). He has worked in Gardanne  for 3 years in the continuous improvement department. Before that, he worked for Alcoa. (100 years ago, Alcoa and Alcan were the same company.)

• Dieter is the potential customer, and one of Frits' past colleagues. He worked for Alcoa for over 18 years befor starting his own company. He now sells polishing machines (among others) for pots, pans, cuttleries, etc. His second most important business is household cleaners and the car polishing market.

• Oliver is the German representative for AIN. Should a deal take place, he would be the "man in the middle", relaying information between Dieter and the Gardanne plant. He has both a sound technical knowledge of the products he sells, and knows his market.

The deal
So, what did each party want from the meeting ? And most of all, why did Dieter come to Alcan, instead of one of it's numerous competitors ?

According to Dieter, Alcan is the only company that is weak in the polishing market, while at the same time having products that are good enough to penetrate the market . And what's in it for the Gardanne plant ? Well, as you may know, according to Alcan's business strategy , the Alcan group should double it's value every 5 years. And to achieve that, one of Gardanne's objectives is to double their sales in the polishing market. And that's what Dieter is proposing to do. Bingo ! Commercial synergy...

So how would the deal go down ? Well, Dieter has an extensive experience in polishing, and has very interesting potential customers (from Germany, Austria, Switzerland, Italy, and the Netherlands). What he would like to do is to sell and develop products for his customers. Alcan would provide the products.

Dieter believes Alcan has a very strong potential, because their products are very good. How does he know that ? Well, there's something called the "blue-color effect" in the industry that's very sought-after. It takes two years of training to see (no, I'm not kidding), but it was described as "like when they show shiny steel in Japanese mangas". The blue-color effect is purely aesthetic (silver is a warm color, blue is a cold color. The combination is apparently beautiful), but it's presence indicates a very high quality of the product. In fact it is so rare that besides Alcan , only one other company has a product giving the effect...

Now, you're probably wondering (as I was) "what does alumina have to do with polishing ?". It works like this : alumina  is mixed with oil to produce a paste. That paste is then rubbed on cars, pans, or whatever one wishes to polish. But Mercedes has developped a new car paint that is resistent to scratches (you can apparently rub a key on the car and the paint will stay intact...). But this new paint is so hard, it needs new aluminas to polish it (on a side note, Mercedes also had the problem that with the paint being so hard, if the car had an accident, the paint would fly off...). There are aluminas currently on the market that can do the job, but they're too slow (i. e. : it takes too long to polish a car with them).

The potential market
So how do the customers determine whether an alumina is good, or not ? They must have some precise, scientific test right ? I mean they have to be able to compare different products objectively, right ? Nope. Although Dieter admitted the test Caroline had developped was very good, he also said they shouldn't mention it to customers...

So how do they test the products ? First of all, take a pinch of alumina, rub it between your fingers and listen to the sound it makes. It should be high-pitched, and feel soft. The alumina should also stay on your fingers : if it runs off, it's too big. On the picture to the left, you can see how a professional does it.

Naturally, not everyone can actually use this test reliably (remember it takes 2 years of training to see the blue color effect...). So what to do ? Well, as Dieter suggested, just take the alumina between your fingers, roll them around and act impressed. It should look something like Thierry  (on the right).

That's for the first contact. Then comes the polishing test. So, what expensive machine do they use in the industry ? Well, I'll let you look for it in the picture to the left.

Did you see it ?

No ?

Well, that's probably due to the fact that there is none. What they do is just take a piece of felt, wet it, and add some alumina. And they then rub that on the metal (usually steel or copper) with their finger. That's why it's called the "finger test".

So how do you sell in a market consisting of enthusiasts who believe more in traditional tests ? Well, according to Dieter, your best shot is to talk about ideas and "by the way" sell your products...

How Gardanne fits in
So, what's Gardanne going to do in the polishing market, and more importantly, why do they want to have a strong position in that same market  ?

Since there now is a worldwide shortage  of alumina, Gardanne would like to reinforce it's position on the polishing market before 2007  (when the shortage should be over). "I understand, but why polishing ?" Because specialty aluminas cost the same to produce as other "normal" products, but are sold for more. In other words, specialty aluminas yield a higher margin.

Gardanne's overall strategy is to gradually increase the "specialty VS standard" ratio, because it will be able to be competitive in the specialty aluminas market. So,  Gardanne'sobjective is to become a one-stop shop for all  specialty aluminas by developing a full range of polishing aluminas (i. e. : the products customers need), and by developing new products very fast.