Caterpillar 2013 Annual Report Download - page 11

CATERPILLAR INC. 2013 YEAR IN REVIEW
9
COMMON GROUND
Gaining
Market Share
through Quality
A Conversation with Ed Rapp, Group President
What were your successes and challenges during 2013?
I feel really good about how our group is positioned coming out of 2013.
We had many challenges relative to the industry – business conditions,
managing inventory and other things. But as I look at the foundation
we’ve collectively built, the health of our product line, the progress
we’re making in critical markets and the gains we’re making relative
to market share, I have great confi dence going into 2014. We are
well-positioned for additional successes in the years to come.
From a competitive perspective, how does quality factor into
Caterpillar winning business?
Our value proposition is based on the belief that our customers will
make more money with Cat® equipment than they would with our
competitors’ equipment. Quality is a key component of that proposition
because customers can only make money when their equipment is
in operation. Our products tend to operate as part of a system – an
excavator loading a truck or a wheel loader loading a hopper. So if
one Cat® machine goes down, the customer’s whole operation could
potentially go down. There is no Caterpillar value proposition without
quality products and quality service. No matter where our customers
are located around the world, the expectation of quality is always
the same. So for us, quality is the price of admission.
What are the most effective measures of quality?
As I think about quality, I always remember “only the paranoid prevail,”
and so we’re on top of metrics on a regular basis; we have internal
metrics and metrics from our dealers that we review daily. But I also
measure quality in terms of the feedback we get as we travel and visit
with dealers and with customers. I often ask the question, “What are
the things we’re doing that you really like and what are the things
we’re doing that need to get better?”
And it’s through that feedback from customers that we get a good
sense of our strengths – the things that we’re doing right and need
to continue – and other areas of opportunity. I’d say the biggest risk
in this job is isolation, and the way to break through that is to engage
directly with customers and get their feedback.
What sort of quality trends has Construction Industries experienced
in recent years?
Quality trends have been good over the last number of years. What
makes that even more remarkable is that we’ve seen improving trends
in our quality during one of the more challenging periods of new product
introduction, as we have launched Tier 4 product in developed parts of
the world. It was incredibly challenging to deliver emissions levels that
have never been achieved before, while also improving fuel effi ciency
and doing so at better quality levels. Sometimes people underestimate
the signifi cance of Tier 4 – better quality, better emissions, better fuel
effi ciency – it really does show the power of systems integration,
the power of Caterpillar.
Beyond quality, what factors are driving success for Caterpillar?
The primary factor is the strength of the Cat product portfolio. The
depth and breadth of that line is a key part of our strength – from the
smallest machines to the largest mining equipment, from generators
to engines that power ocean-going vessels. It’s a testament to the fact
that building machinery at Caterpillar is a team sport – a collaboration
between product, component and service groups, coupled with feed-
back and engagement from customers. All of these players work jointly
in terms of product development, and help us create solutions that
meet customer requirements.
This collaborative environment at Caterpillar is better than it has ever
been, allowing us to deliver more quality products today than ever before.