ENTERPRISE EXCELLENCE
Caterpillar – Visibility & Assurance
September, 2014
Joshua Bloomfield, LCB
General Manager, Int’l Inbound & Trade Compliance
Caterpillar Enterprise System Group
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Company Overview
Caterpillar Business Segments
• Construction
Industries
• Resource
Industries (Coal,
• Energy &
Transportation
• Customer & Dealer
Support
Ore, Lumber, etc.)
The Caterpillar Business Model
• Financial Products
& Corporate
Services
Global Snapshot
Executed in Close Partnership with our Dealers
• 2013 Sales & Revenue - $55.7B
SEED:
• Fortune 100, Gartner Top 25 Supply Chains (2013)
 Value-based products/services
 Design and development
GROW
 Lead in field population
 Various paths to market
HARVEST
 Aggressively pursue parts/ services
 Unmatched dealer support
ENTERPRISE EXCELLENCE
• Global Reach unmatched in the industry
• CAT® Equipment — 3M+ units globally — is at work for
our customers on highways, rail lines, oceans and rivers, in
forests, quarries and oil fields
• Caterpillar Manufacturing Excellence is supplemented
by world-class service businesses, providing logistics,
financial products and remanufacturing
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How the Visibility Journey Began
Caterpillar Dealers were complaining
to the Executive Office
“We can buy a pair of $50 shoes from
Amazon and track them from the
distribution center to my door but you
cannot tell me where my $5M machine
is?
Caterpillar Global Transportation
began the process of identifying a
visibility solution and implementing it.
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What is the Business Problem?
Problem
Impact
Goal
• Unable to see what is in-transit, when
it is expected to arrive
• Higher expedite air freight cost
Visibility
Inconsistent Overseas
Transit Time
• Higher buffer stock
• Longer transit lead time
• Excess inventory
Velocity
No Validation of Parts
before Moving
• Missing point-of-use risk from late
ocean part shipping
• Moving parts with no schedule leading
to excess inventory
Control
No End-to-End InTransit Part-Level
Visibility
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In-Transit Visibility Maturity Journey
We Are
Roughly Here
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Value of Driving Visibility into Operational Control
Visibility has enabled improvements in
inventory and freight cost reductions through
improved velocity.
Reduction from 1 out of every 4 containers
suffering a delay to 1 out of every 10 containers
suffering a delay
U.S. Exports to China After GMM Controls
U.S. Exports to China Before GMM Controls
•
•
•
Parts to Arrive 95% of Time in 18 Day Range
Standard Deviation was 9.1 Days
Extra Inventory to Compensate for Inconsistent Transit
ENTERPRISE EXCELLENCE
•
•
•
Parts to Arrive 95% of Time in 8 Day Range
Reduction in Standard Deviation by 55%
Inventory Reduction - 10 Days from Consistent Transits
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Managing In-Transit Disruptions
• Unforeseen supply chain events can & do occur at any moment
• Without visibility these types of disruptions can cause costly shipping delays
• The GMM program helps to mitigate the effects of supply chain disruptions
Examples of Recent Supply Chain Disruptions
MOL Comfort Cracks in Half
6 Cat Containers Sink
June 2013
Boston Express Engine Failure
50+ Cat Containers Onboard
December 2013
Vancouver Truckers Strike
Major Trade Route for Caterpillar
March 2014
Major Road Accident in Germany
Parts for US Plants Damaged & Late
May 2014
1.
Within hours of these events, part schedule-level data was shared with the
plants on status of affected parts & next steps
2.
GMM was the enabler, merging part schedule details with transportation
status events to allow plants to make informed disruption decisions
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Unifying Process Partners for Intl Inbound Visibility
1.
Previously Each Transportation Partner Reprocessed Information in their own “Silo”
2.
LinkTransportation Process Partners Together in One Common Platform
3.
Supplier to Plant Part Level Visibility & Velocity Gate Check Points
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What Does the In-Transit Part Visibility Look Like?
2
1
Detailed Milestones
3
1
Committed Ship Date from Order, Integrated with Cargo
Ready Date from Supplier Ready to Ship Signal, also
Integrated with Need in Plant Date from Order
2
Vessel Estimated Time of Arrival from Transport Provider,
Integrated with Order & Shipping Data to View Point of
Use Risks
3
Detailed Milestone Events for Each Order within a
Container or Air Waybill, Provide Visibility into Each
Step of Process
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Key Takeaways
 Visibility is a journey
You will evolve your processes and your strategies along the way
 Data can be a powerful thing if it is correct, timely, and
available to be consumed
Manage data quality from the beginning to ensure effectiveness of your solution
 Turn information into visualization to capture the audience
and get them engaged in your project
Pictures are more meaningful than excel files
 Each step of the maturity process will drive new levels of
value creation
You have to push the team to search it out
 Different skill sets and aptitudes are needed on the project
at the different levels of maturity
Be prepared for personnel changes required to harvest the best value
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