about cat logictics
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About CAT LogicticsTRANSCRIPT
Caterpillar Logistics Services, Inc.Cat Logistics
01/26/20Maureen HealyMiami DC
2© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
Overview
Cat Logistics heritage Caterpillar culture Cat Logistics overview
– Cat Distribution Services– Manufacturing Logistics– Transportation– External Client Business
Miami DC Overview Data Files Review of Concepts
Cat Logistics Heritage
4© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
Logistics – Part of Caterpillar’s Heritage
Producing and supporting high-value, durable goods working in time-sensitive, critical environments around the world– Caterpillar manufactures more than 500 products to serve construction,
mining, forestry and power generation applications– More than 170 manufacturing facilities and thousands of suppliers around the
world– Distributes products in more than 190 countries
World-class logistics increases customer loyalty and improves shareholder value
5© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
The Differentiator
What sets Caterpillar apart?Superior customer service through 180 Dealers 1,890 Dealer branch stores1,467 Dealer rental outlets
Enabled by… world class parts distributionCat Logistics distributes more than 750,000 unique Caterpillar part numbers, with worldwide parts availability of 99.7%
Caterpillar’s ability to get the right part in the right place at the right time separates us from the competition
Caterpillar Culture
7© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
Our Values in Action
Documents high ethical standards our company has upheld for more than 80 years
First published in 1974 Global company with global standards and
expectations Living Our Values in Action
is an individual choice
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Through living Our Values in Action, Caterpillar Production System (CPS) will be an enabler for Caterpillar to achieve its Vision 2020 and business strategy
IntegrityExcellenceTeamworkCommitment
Our Values in Action and Leadership
with values LEAD
customer focus BUILD
high expectations SET
results DELIVER
inspire and engage DEVELOP
Leadership imperatives Leaders building leaders Making great leaders Employee Opinion Survey (EOS) and action planning
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CPS and Three Systems
The Caterpillar Production System is the common Order-to-Delivery process being implemented enterprise-wide to achieve our Safety, Quality and Velocity goals for 2010 and beyond
10© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
CPS and Eight Wastes
The ultimate goal of CPS is the elimination of waste. Waste is any activity that consumes resources, but creates no value for the customer
Cat Logistics
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Caterpillar’s Supply Chain
Supply Chain is the flow of materials, information, and finances as they move in a process from the origin point to the end consumer
Logistics involves all of the planning, execution & control required to successfully deliver the product to the end consumer
The goal is to optimize this flow to achieve low cost and high customer service
Supply Chain
Supplier Manufacturing Distribution Dealer / Retail Consumer
Supply Chain
13© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
Cat Distribution Services Manufacturing Logistics
Transportation External Client Business
PIRACICABAJOHANNESBURG
MELBOURNE
SINGAPORE
GRIMBERGEN MORTON
MOSCOW
SHANGHAI
Supply Chain Excellence
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Caterpillar Distribution Services
80+ year history of providing Caterpillar machine & engine owners efficient and effective global logistics support through Cat parts distribution network
22 facilities in 9 countries Serving Cat dealers world wide Modernized Cat Parts Network (MCPN):
– Americas, EAME and AP– Multi-functional facilities– Located closer to dealers and suppliers
Service Parts Management (SPM) software / processes
Strategically placed inventory 24 x 7 x 365 operations
PIRACICABAJOHANNESBURG
MELBOURNE
SINGAPORE
GRIMBERGEN MORTON
MOSCOW
SHANGHAI
15© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
Manufacturing Logistics Parts entering manufacturing facilities (inbound logistics) Inbound Logistics Centers (ILCs):
– Only hand-weight items (<35lbs or <16kgs / part)– Warehousing, inventory management, sequencing,
assembly processing, kitting and sub-assembly– 2 ILCs supporting 130 facilities (Belgium and Illinois)
Logistics Service Centers (LSCs):– Consolidating demand, planning, ordering,
staging & sequencing and storing – Quick (overnight) delivery to geographically proximal
manufacturing plant(s) / Points of Use (POU)– 19 LSCs supporting 21 manufacturing facilities
Manufacturing PlantSuppliers
Logistics Service Center (LSC)
Regional InboundLogistics Center (ILC)
16© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
Transportation Transportation of finished products and parts across all modes – truck, rail, ocean and air Caterpillar and external clients One of the largest freight movers in the world:
– Transportation spend managed – $1.8 billion– Carriers providing service – 600– Country to country lanes managed – 900
Track and trace tool enhancing visibility Sustainable development strategy
Product Distribution Centers (PDCs):– Supporting Caterpillar’s finished goods multi-lane
distribution strategy of product configuration simplification and increased availability
– Strategically located PDCs (Australia, Belgium and UAE)– Product examples – wheel loaders, excavators, track-
type tractors, wheel loaders and skid steers– Modeling, implementation and operations
The External Logistics Business
18© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
Leveraging our Core Competency
In 1987, Cat Logistics was formed as a wholly-owned subsidiary to offer logistics services to external clients
Providing logistics solutions to clients with needs similar to Caterpillar’s—time-sensitive, service-critical, unpredictable demand—leverages our capabilities and represents a significant growth opportunity
Today, Cat Logistics is one of the fastest growing divisions within Caterpillar– 15% CAGR 2002 – 2008– 3X growth projected from 2000 – 2010– More than 80% of our growth is with current clients
Logistics knowledge gained by serving 60+ clients has allowed us to constantly improve the logistics solutions and competitive advantage for all our clients
19© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
Significant Growth & Long Term Relationships
A U T O M O T I V E I N D U S T R I A L
MAINTENANCE, REPAIR & OPERATIONS (MRO)(Mining, Oil & Gas)
O T H E R S E R V I C E P A R T S(Aerospace & Defense, Technology, and Consumer Durables)
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Provide Our Competitive Advantage 80 years of global product support heritage
– Globally integrated aftermarket approach with sound, proven business practices
Empathy – we live what our customers live– We are the only major 3PL that has origins in
manufacturing and prime product support
Solution leader + =
– Co-developer of state-of-the-art flexible supply chain IT system built by market-leader SAP
Talented people and proven processes – Subject matter expertise and years of experience
in the many facets of supply chain management
ServiceParts
Management
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Cat Logistics Global Network
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Cat Logistics Today
Europe, Africa, Middle East & CISAmericas
Asia-Pacific
6 Continents 23 Countries
20 Languages130 Facilities & Offices
Shipping to 190+ Countries 12,000+ Employees
29M+ Sq. Ft.160M+ Orders/Yr
21B lbs. Of Freight/Yr$1.8B Transportation Purchased/Yr
18M SKU’s Serviced/Yr
767,000
LocationsEmployees
424,600
LocationsEmployees
12800
LocationsEmployees
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Miami DC Overview
Miami Lakes, Florida
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Miami DC History The first Miami area facility opened in 1956 The current Miami Lakes facility opened in 1976 Facility expanded (C1) in 1997 Facility expanded (C2) in 2002 Yard Expansion Completed in 2007 Opened Off-Site facility in 2008 (17,000 sq. ft)
C Building 1976
C1 Building 1997
C2 Building 2002Yard Expansion
(Not Shown)2007
25© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
Miami DC Overview Facility Overview
– 441,000 sq. ft. under roof, 44,000 sq ft. yard, 17,000 sq. ft. under roof off-site– 229,000 stocked parts / 264,000 locations– 230+ employees, 3 shift operation (M-F) + Weekend Shift
Volume Overview– 12,000 Outbound lines/day – 65% stock orders processed on 3rd and 1st shift
• 35% emergency orders processed on 1st and 2nd shift– 3,000-3,500 inbound lines/day– 500 cross dock cases/day
Customers– Facing facility for 1 Florida Dealer and export to over 33 other dealers– Secondary facility in search tables for other dealers – Ship to over 1,200 Destinations– 55% of outbound is shipped in Ocean containers to facing dealers– 43% of outbound is air or LTL to facing dealers– 2% of outbound is shipped to non facing dealers
26© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
Problem StatementNeed to develop 5 year space solution for facility with implementable plan to achieve 85% maximum utilization. Plan for 5,000 additional parts to store each year across all concepts.
In scope: Improved use of current concepts, new storage concepts, off-site Out of scope: Facility expansion, Yard
TYPE FULL EMPTY TOTAL PCNT_FULL
CTL 2068 54 2122 97.46%
ELG 12780 1002 13782 92.73%
FLR 1778 118 1896 93.78%
GLS 610 12 622 98.07%
GSK 2265 17 2282 99.26%
HRK 1607 2 1609 99.88%
HVR 10734 434 11168 96.11%
MZB 191549 21599 213148 89.87%
RCK 11508 2268 13776 83.54%
YRD 4102 364 4466 91.85%
Current Utilization by Concept
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Facility Layout
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Facility Process Areas
Inbound / Inbound Sort
Office
Pack Lanes
Staging Bays
Loading Docks
Maint.
Inbound Material Flow (Red)
Outbound Material Flow (Blue)
29© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
Facility Storage AreasFacility
YRD
MZBRCKRCK
ELG ELG/GLS
YRD
HRKHRK
FLR
CTLFLR
FLR FLR
FLRRCK
30© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
Data FilesItem Master (Parts Stocked in Miami)
•Part Number
•Recommended Storage Quantity (RSQ)
•Min
•Max
•Pieces per entry
•Forecast annual demand
•Forecast annual entries (lines)
•Package Quantity
•Weight
•Length
•Width
•Height
Sales History
•Part Number
•Country of Origin
•MR Qty
•Customer Code
•Pack With ID
•Order Class
•Weight
•Volume
•Required Completion Date
•Picks (Impact of package quantities)
Bin Map
•Location
•Part # (if occupied)
•Country of Origin
•Location Storage Quantity (LSQ)
•Facility Stock Available (FSA)
•“Concept type (CAT term for “slot”)
•Concept size (slot size)
•Concept sector
31© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
MZB (Mezzanine/Bins)
Full quantity in one location Parts under 30 lbsHand picked onto carts
32© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
RCK
Parts may have multiple locationsParts under 50 lbsHand picked using order picker
33© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
CTL (Cantilever)
Crated and uncrated partsHeavy parts Parts may have multiple locationsMachine picked with reach truck
34© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
ELG (Elongated)
Elongated partsHand picked using order picker Difficult to store and pickSlower moving parts
35© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
FLR (Floor)
Large Crates, Filters, and RollersPrimarily picked with reach truck or hoistMix of commodities
36© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
GLS (Glass)
Fragile itemsStored vertically80% Hand picked 20% Palletized picked with reach truck
37© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
GSK (Gasket)
Long narrow commodityHand Picked with order pickerFragile items
38© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
HRK (Heavy Rack)
Machine picked with reach truckMixed commodities
39© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
YRD
Weather Resistant ItemsMost items >50lbs
40© 2010 Caterpillar Logistics Services, Inc.Caterpillar: Non Confidential
QUESTIONS?