Caterpillar 2011 Annual Report Download - page 34

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Customer & Dealer Support 34
WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message
Construction
Industries
Customer &
Dealer Support
Financial Products &
Corporate Services
The Caterpillar
Foundation Leadership Performance
Resource
Industries
Energy &
Power Systems
Caterpillar machines and engines put in long hours in tough
conditions in service to customers. When a part wears out or
needs replacement, ensuring that the right parts are in the
right place at the right time is the brand promise our customers
have learned to expect from Caterpillar. Delivering on this
promise requires a world-class global logistics network. Widely
considered to have the industry’s best distribution system,
Cat Logistics is investing to set an even higher standard as the
growth of the company’s machine population accelerates. In
2011, parts availability climbed to historic highs, and inventory
turns and fill rates exceeded efficiency targets.
The improvements are the result of better forecasting of dealer
and customer needs and improved visibility into both internal and
external supply chains. A new planning system fully implemented
during 2011, for example, uses machine population data to plan
distribution center inventory levels. An SAP-based Service Parts
Management (SPM) system is also key, supporting facilities around
the globe on a single platform with significant efficiency gains.
Equally important is an ongoing expansion of Caterpillar’s parts
distribution network. The latest phase of this expansion is adding
millions of square feet of distribution center space by growing
some facilities and constructing new distribution centers.
During 2011, a new, one-million-square-foot distribution center
opened in Clayton, Ohio. In 2012, the current Spokane, Wash.,
distribution center will be replaced with a new 500,000-square-
foot-facility, which will be four times the size of the existing facility.
In addition, two other new distribution centers were announced,
located in Dubai and California, that will add a combined 850,000
square feet during 2012.
These investments have one simple purpose: to get parts to
dealers and customers faster. “One of the key reasons customers
buy Caterpillar products is the superior product support capability
our dealers provide,” notes Steve Larson, vice president with
responsibility for the Parts Distribution & Logistics Division.
These expansions will not only support anticipated growth in
parts demand, but also help to optimize the parts supply chain.
These facilities are the latest in an ongoing parts distribution
expansion that has included the new distribution centers in
Shanghai in 2006, Russia in 2007 and Waco, Texas, in 2009.
These physical investments, combined with new systems and
processes, are not only transforming Cat Logistics, but also are
helping to realize one of Caterpillar’s strategic “Big 8” imperatives,
Execute the Business Model…accelerate aftermarket parts and
services growth.
Best Gets
Even Better
Global expansion is helping Cat
Logistics help us to increase
aftermarket parts sales and service.
2.5 Million More Square
Feet of Distribution
Center Space