Annual Report 2010 - Outokumpu

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52 During 2010, Outokumpu established a process that governs sales to the armaments and military sector, even though this sector receives only a marginal proportion of the Group's total deliveries. Customers in this sector are required to provide assurances that they will comply with the EU, UN and US embargo lists, and also asked to provide Outokumpu with evidence that they have in place measures comparable to Outokumpu's Code of Conduct and associated ethical standards. In cases of non-compliance, Outokumpu withholds sales to such customers. outokumpu.com The Outokumpu website at www.outokumpu.com, is widely recognised as one of the steel industry's most attractive and informative Internet locations. In 2010, it received more than a million visitors, making it the industry's secondmost-visited website. Outokumpu Annual Report 2010 – Business – Group Sales and Marketing
53 Supply Chain Management Procurement excellence Responsibility in procurement Product development and sourcing optimisation Supply Chain Operations The Supply Chain strategy supports the Group Commercial strategy through the focus on higher delivery performance, stable and shorter lead times and it supports the Group's overall strategy by optimising inventories, which results in efficient use of working capital. The focus placed on delivery performance was very successful in 2010; achieving a significant improvement from the 2009 figure of 82% to 88% in 2010. Contributing factors included a diligent use of realistic available capacities for sales and increased operational focus on all shipments. More efficient and lower working capital is a key strategic target for Outokumpu and in 2011 there will be extra focus on increasing efficiency of use of inventory in order to increase competitiveness. During 2010 Outokumpu's sales volume increased by 27% while inventory volumes increased by 12% compared to the situation in 2009. Important activities in 2011 will consist of further increasing the efficient use of inventories, e.g. between the Group's service centres and production units in order to achieve more inventory consolidation opportunities within the Group. This is being supported by integrating the functions and business units. The existing common excellence tools and techniques will be used to achieve the ambitious long term supply chain targets especially in inventories, delivery performance and lead times. Excellence programmes The Operational Excellence programmes launched in 2005 and originally comprising Production and Commercial Excellence were expanded to include also Supply Chain Excellence in 2007. Work in all areas of the Excellence programmes has continued in order to achieve significant sustainable benefits for the Group. Benefits have been achieved through the Operational Excellence programmes for example by improved Group-level supply chain management, more efficient utilisation of raw and other materials, exploiting the procurement leverage, providing additional capacity for solving production bottlenecks, improved pricing discipline, and achieving growth in key customer accounts. The project phase of the Operational Excellence Programmes ended at the end of 2010. The excellence work has now become part of daily operations management and will remain Outokumpu's method to identify, implement and maintain improvements. In the short term the Excellence work will continue to focus on working capital reduction, optimising raw material usage, quality development and capacity enhancement. All activities continue to be underpinned by the greater involvement of all Outokumpu employees to provide sustainable improvement and the sharing of best practise and rigorous standardisation where necessary. Outokumpu Annual Report 2010 – Business – Supply Chain Management
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Annual Report 2010
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Table of contents Outokumpu - an in
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Group Executive Committee .........
Page 7 and 8: 1 Outokumpu - an international stai
Page 9 and 10: 3 CEO's review 2010 was characteris
Page 11 and 12: 5 Next steps The managerial agenda
Page 13 and 14: 7 Group key figures 2010 2009 2008
Page 15 and 16: 9 Strategic themes Outokumpu's stra
Page 17 and 18: 11 Excel in operations Safe working
Page 19 and 20: 13 Management discussion of financi
Page 21 and 22: 15 € million Operating profit Gen
Page 23 and 24: 17 When the additional ferrochrome
Page 25 and 26: 19 also resulted in a substantial i
Page 27 and 28: 21 Group earnings per share totalle
Page 29 and 30: 23 € million Stainless steel base
Page 31 and 32: 25 Developing Outokumpu's corporate
Page 33 and 34: 27 A significant proportion of Outo
Page 35 and 36: 29 Market position In recent decade
Page 37 and 38: 31 amount of stainless steel consum
Page 39 and 40: 33 General Stainless - high-quality
Page 41 and 42: 35 An efficient, integrated single-
Page 43 and 44: 37 chromium ore was found to extend
Page 45 and 46: 39 Long Products Sheffield The Shef
Page 47 and 48: 41 Specialty Stainless key figures
Page 49 and 50: 43 Special Coil and Plate Special C
Page 51 and 52: 45 Outokumpu Stainless Tubular Prod
Page 53 and 54: 47 Group level functions Outokumpu'
Page 55 and 56: 49 Headquarters in Belgium Outokump
Page 57: 51 Expansion of our service centre
Page 61 and 62: 55 50% compared to 2009. The ferroc
Page 63 and 64: 57 Research and development Product
Page 65 and 66: 59 perfectly safe for use in equipm
Page 67 and 68: 61 Stainless is optimal for sustain
Page 69 and 70: 63 Environmental goals and results
Page 71 and 72: 65 Results 2010 Sheffield melt shop
Page 73 and 74: 67 Until the beginning of 2009, sla
Page 75 and 76: 69 Material balance Materials used,
Page 77 and 78: 71 Improving waste handling and pre
Page 79 and 80: 73 Primary actions included in the
Page 81 and 82: 75 Despite of protective actions ag
Page 83 and 84: 77 Stainless steel in innovations a
Page 85 and 86: 79 Emissions and effluents One of O
Page 87 and 88: 81 ficiation and clarification basi
Page 89 and 90: 83 Water - a natural resource for c
Page 91 and 92: 85 Water withdrawal and discharges
Page 93 and 94: 87 studies monitoring the prevailin
Page 95 and 96: 89 Environmental investments furthe
Page 97 and 98: 91 Outokumpu and stakeholders The s
Page 99 and 100: 93 Goals for 2011 Improve HR report
Page 101 and 102: 95 Personnel facts and figures Outo
Page 103 and 104: 97 The US 330 321 403 Others 33 33
Page 105 and 106: 99 Open communication Employee moti
Page 107 and 108: 101 Compensation and benefits Outok
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103 Developing our people through c
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105 Health and safety Health and sa
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107 Everyone deserves a safe workin
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109 We value our stakeholders' opin
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111 Outokumpu and our customers - a
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113 Current and future employees Bo
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115 our home market Europe, resulte
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117 Production employees are repres
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119 Public sector support, sponsori
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121 Regulatory framework Outokumpu
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123 General Meeting of Shareholders
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125 To make other proposals to Gene
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127 Board committees The Board of D
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129 The CEO and Deputy CEO The Chie
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131 Group Corporate Management Outo
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133 Vice Chairman of the Board, Soi
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135 Key aspects of internal control
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137 Controller meetings were organi
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139 Risk management Outokumpu opera
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141 Strategic and business risks St
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143 Operational risks Operational r
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145 Both these financial risks and
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147 Good level of environmental man
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149 Climate change is taken serious
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151 Ethics, corporate responsibilit
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153 Internal audit monitors complia
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155 Outokumpu Annual Report 2010 -
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157 Solidium Oy 56 440 597 30.8 The
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159 Board authorisations Board Auth
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161 Shares subscribed with 2003B op
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163 programme for the earnings peri
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165 Information for shareholders An
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167 Stock exchange releases 2010 2
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169 Members of the Executive Commit
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171 Responsibility: HR strategy and
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173 Board member: Marzac Investment
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175 Based on its own assessment, Ou
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177 Risk management 4.10 Processes
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179 8 EN15 Species with extinction
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181 Human Rights Investment agreeme
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183 Fines for non-compliance PR9* c
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185 Measurement techniques Economic
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187 Days lost due to strikes is cal
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189 • Tested the completeness, ac
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191 8% from 2009. The clearly highe
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193 Profitability Earnings per shar
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195 During 2010, Outokumpu's net in
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197 Outokumpu's strategic prioritie
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199 Outokumpu is participating in t
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201 Outokumpu has been systematical
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203 completed in November 2010 and
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205 Short-term outlook Following th
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207 Opinion on the company's financ
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209 Diluted earnings per share, €
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211 Retained earnings 1 365 1 735 N
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213 Proceeds from sale of property,
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215 Key financial figures of the Gr
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217 Quarterly information Income st
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219 Share-related key figures 2010
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221 Definitions of key financial fi
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223 Income statement of the parent
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225 Share capital 311 309 Premium f
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227 Disposals of intangible assets
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Outokumpu is a global leader in sta
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Annual Report 2010 - Outokumpu

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