Alcan Eyes Strategic Sourcing for European Freight Spend

Aluminum company brings on Verticalnet to tackle transportation spending in drive to reduce costs

Aluminum company brings on Verticalnet to tackle transportation spending in drive to reduce costs

Malvern, PA — June 1, 2004 — Aluminum and packaging company Alcan is set to use a solution from Verticalnet to drive a strategic sourcing project on the Montreal-based manufacturer's European over-the-road freight spending.

Verticalnet said it will support Alcan's strategic sourcing process by combining its transportation-specific bid collection ("RFX") and optimization technology with its transportation sourcing process, methodology and expertise. The solution provider already has been working on a North American transportation sourcing engagement with Alcan.

The scope of the new sourcing project will cover a substantial portion of Alcan's European over-the-road transportation spending, representing over $122 million in annual expenditures for Alcan. Goals for the initiative include reducing Alcan's transportation spending while creating better alignment between Alcan and its carriers.

"Verticalnet is providing specialist sourcing support for Alcan in Europe, building on their success with Alcan's North American transportation sourcing engagement," said Jacques Barailler, Alcan's vice president of corporate procurement. "The strategic sourcing initiative will enable us to gain better control of our freight spending and also to achieve cost synergies following the acquisition of Pechiney. The flexibility of the Verticalnet solution will result in more aggressive and creative bids from suppliers, leading to lower total costs for Alcan."

Verticalnet said that its solution, dubbed "Advanced Sourcing," provides prospective suppliers with detailed insight into Alcan's freight requirements. Category-specific bid collection capabilities then enable suppliers to submit proposals that take advantage of their unique strengths and capabilities. The solution provider's optimization capabilities then enable post-RFP data analysis and decision support to identify the highest-value sourcing scenario.

"Transportation is one of the most complex spend categories that can greatly benefit from the Verticalnet Advanced Sourcing approach," said Brent Habig, Verticalnet's executive vice president of sales and consulting. "We are pleased that Alcan has looked to Verticalnet as part of its initiative to transform the management of this critical spending category and drive savings through the use of our Advanced Sourcing solution."

In addition to the latest Alcan deal, Verticalnet's London office has scored engagements with such other European-based clients as IKEA and Cadbury-Schweppes.