making progress possible - library.corporate...
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MAKING PROGRESS POSSIBLE
Serving a Variety of Industries
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LandscapingUrban DevelopmentSite Development Housing Development
MAKING PROGRESS POSSIBLE
Paving
Serving a Variety of Industries
Landscaping
Mining Quarry and Aggregates Sewer & Water
Urban DevelopmentSite Development
Road Construction
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Housing Development
Forestry Waste DemolitionScrap HandlingPipeline
MAKING PROGRESS POSSIBLE
14%12%
7%8%
7% 8%9% 9%
11%
0%
5%
10%
15%
1997 1998 1999 2000 2001 2002 2003 2004 2005
Machinery Business Trends
$13.4 $13.4$11.7 $11.9 $12.2 $12.0
$13.7
$18.8
$22.9
$0
$5
$10
$15
$20
$25
1997 1998 1999 2000 2001 2002 2003 2004 2005
(in b
illio
ns)
Net Sales *
Operating Profit %
* Primarily our design, manufacturing, marketing, and parts distribution operations for our machinery lines of business
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MAKING PROGRESS POSSIBLE
Manufacturing Facilities Throughout the World
Continued investment•Equipment replacement and update
• Increased capacity• Machines• Components
•Supplier development• Capacity• Cost
Over 100 plants around the world• Serving markets around the globe• Increased velocity and flexible sourcing• Low cost producer opportunities• Reduced currency risks
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MAKING PROGRESS POSSIBLE
Knowledge: Technology Leadership in the Industry
8,000+ engineers, distributed around the world.
Technology solutions that provide the best return on investment
for our customers
Robust research and development capabilities
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Engineering Design Center - India Research & Develpment Center - China
MAKING PROGRESS POSSIBLE
Leadership Through Core Competencies
Power Management• Drive Trains• Engine Technology
Materials• Structural Components• Wear Components• Friction Materials• Lubricants
Controls• Electronics• Hydraulics• Mechanical
Manufacturing Process• Manufacturing Engineering• Assembly• Machining• Heavy Structure Fabrication• Heat Treat• Supply Chain Management
Serviceability• Diagnostics• Maintenance• Modularity• Remanufacturing
Technologies developed to address customers needs
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MAKING PROGRESS POSSIBLE
Leadership Through Core Competencies
Technologies developed to address customers needs
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Power Management• Drive Trains• Engine Technology
Materials• Structural Components• Wear Components• Friction Materials• Lubricants
Controls• Electronics• Hydraulics• Mechanical
Manufacturing Process• Manufacturing Engineering• Assembly• Machining• Heavy Structure Fabrication• Heat Treat
Serviceability• Diagnostics• Maintenance• Modularity• Remanufacturing
MAKING PROGRESS POSSIBLE
Product Support Capability
• Integrated product support capabilities ensure optimized utilization of products
•Worldwide parts availability•Proactive diagnostics and prognostics•Well trained service technicians•Service shops and rebuild centers
• Profitable business for Caterpillar and our dealer organization
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MAKING PROGRESS POSSIBLE
Fulfilling Vision 2020
From Good to GreatFrom Good to Great
Strategic Goal: Number one for every major product line on every continent for markets we serve
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MAKING PROGRESS POSSIBLE
Investments in Research and Development
0
200
400
600
800
1000
1200
96 97 98 99 00 01 02 03 04 050.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Investments in long term competitiveness, safety/environmental requirements and profitable business growth.
R&
D E
xpen
ses
(milli
ons
of d
olla
rs)
23
(per
cent
of s
ales
)
MAKING PROGRESS POSSIBLE
Emissions Reduction: A Driver for Differentiation
ACERT• Introduced in 2004
• On Highway Trucks
• Extended to all Applications• Competitive Advantages
• Performance• Operating Costs• Durability• Reliability
• Platform for the future• Emissions• Integrated Power Train
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MAKING PROGRESS POSSIBLE
Year Model Engine2005 950H C7
962H C7966H C11 972H C13 980H C15 988H C18990H C27
Off-Road Tier 3 Progress
Year Model Engine2004 D8T C152005 D6RIII C9
D9T C18D10T C27
Year Model Engine2005 345C C13
365C C15385C C18
2006 324D C7325D C7330D C9
Year Model Engine2006 770F C15
771F C18773F C27775F C27777F C32
Year Model Engine2006 140M/143M C11
160M/163M C13
Year Model Engine2004 725/730 C11
735/740 C15
Year Model Engine2005 621G/623G/627G C15 / C9
631G/637G C18 / C9 657G C18 / C15
Over 180 models updated in the
2005/2007 period
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MAKING PROGRESS POSSIBLE
Focus On Business and Customer Priorities
Business Priorities
• Quality
• Regulations
• Cost competitiveness
• Manufacturability/order fulfillment
Customer Priorities
• Quality/Reliability
• Safety
• Performance
• O&O costs
• Operator environment& interface
• Site management
• Serviceability
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MAKING PROGRESS POSSIBLE
Caterpillar Production System: Focus on Quality and Velocity
Sustainable Performance• Production efficiency
•Reduce movement of work-in-process•Optimize ergonomics on the job•Process rationalization•Reduce inventories•Eliminate rework•Better utilization of work force
• Benefits for our employees, customers and shareholders
• Improved as-delivered quality• Improved velocity (order-to-delivery)• Improved productivity•Reduced costs•Safety excellence
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MAKING PROGRESS POSSIBLE
Technology to Enable Customer Success
•Operator Comfort
•Increased Visibility
•Increased Productivity
Ergonomics
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MAKING PROGRESS POSSIBLE
Technology to Enable Customer Success
•Versatility
•Reduced Fuel Consumption
•Enabler for Automated Features
• Increased Productivity
ErgonomicsProgrammable Hydraulics
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MAKING PROGRESS POSSIBLE
Technology to Enable Customer Success
ErgonomicsProgrammable Hydraulics
•Control and Guidance•Automated Functions
•Ease of Operation
• Improved Work Output
•Fleet Management•Asset Management
•Health Monitoring
•Productivity
Remote Connectivity
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“…the biggest advancement I have ever seen…not only increased safety, but can cut schedules by 30%.“
Dwayne McAninch, CEO of McAninch Corp.2005 Award of Excellence
MAKING PROGRESS POSSIBLE
Technology to Enable Customer Success
ErgonomicsProgrammable Hydraulics
Remote Connectivity
•Reduced Parasitic Loads
• Increased Performance•Reduced Fuel Consumption
•Lower Operating Costs• Increased Durability
Integrating components to maximize productivity
in each application
Power Management
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MAKING PROGRESS POSSIBLE
Simplification: Improved Technology/Component Commonality
New Motor Grader Platform•39% cost reduction in the frame
•From 9 to 5 models•From 6 to 4 rear frames•From 5 to 3 front frames•From 3 to 2 transmissions
Customer Benefits• Improved Reliability• Improved Parts Availability• Increased Uptime•Lower O&O Costs
Component commonality and simplification drive business and customer benefits.
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MAKING PROGRESS POSSIBLE
Accelerated Product Development Cycles
Shorter Time to Market for Improved Competitiveness
By the end of 2008 we will have updated most, if not all of our equipment. And we’ll start again in 2010.
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MAKING PROGRESS POSSIBLE
Robust Product Development Process
Taking superior products to the market requires knowledge, solidprocesses and discipline
• Customer requirementsmanagement
• Embedded 6 Sigma: emphasis on rigor, data, and metrics
• Higher engagement of all functions, including our supplier partners
• Virtual product development andtesting
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MAKING PROGRESS POSSIBLE
Caterpillar New Products – M Series Motor Graders
• Intuitive joystick controls• Unmatched visibility• Operator ergonomics• Productivity & performance
• Electro-hydraulics• Accugrade ready
• Tier 3 Emission compliant • ACERTTM Technology
The New Standard for Ease of Use and Operator Ergonomics
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MAKING PROGRESS POSSIBLE
Caterpillar New Products – Quarry and Construction Trucks
•Improved operator efficiency
•Superior cab access & egress
•Reduced operating costs
•Regulatory compliance
•New platform for future generations
F Series - 2006 Introduction, Complete 5 model update
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MAKING PROGRESS POSSIBLE
Caterpillar New Products – E Series Backhoe Loaders
• Improved operator environment• Increased versatility
• Extendable Stick• Superior serviceability• Innovative technology
• Load sensing hydraulics• Priority flow• Accugrade
E-Series – 2006 Introduction
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MAKING PROGRESS POSSIBLE
H Series - 2005 / 2006 Introduction
• State of the Art Technology• Load Sensing Hydraulics
• Fuel Efficiency• Enhanced Machine Information• Unmatched Operator Comfort
and Efficiency• Tier 3 Emission Compliant
• ACERTTM Technology
Caterpillar New Products – H Series Medium Wheel Loaders
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MAKING PROGRESS POSSIBLE
Caterpillar New Products: D Series Hydraulic Excavators
•Increased Performance•Greater breakout force•Faster cycle times•Power Management
•Increased Versatility•Work tool integration•Programmable flows and pressures
•Enhanced Operator Environment •Tier 3 Emission Compliant
•ACERTTM Technology
D Series: 2006 / 2007 Introduction
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MAKING PROGRESS POSSIBLE
Caterpillar New Products: Mining Trucks
2008 / 2009 Introduction•Proprietary electric drive
•Two models over 200 tons•Mechanical drive upgrade
•Five models•Complete truck integration
•Unique Caterpillar strength•State of the art C175 engine
•Tier 4 – integrated solution •More alternatives with the addition of electric drive
Mining Trucks: Dual Path Product Strategy
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MAKING PROGRESS POSSIBLE
Equipment Management Solutions
• Monitoring / Analysis & Decision / Solutions
• Machine Control and Guidance
Remote connectivity:• Delivers productivity and efficiency gains• Improved fleet management• Strengthens customer relationships
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MAKING PROGRESS POSSIBLE
Integrated Solutions Capability
A complete line of products, integrated with comprehensive business solutions…
Financing Logistics Remanufacturing Countertrade Insurance Product Support
3
MAKING PROGRESS POSSIBLE
Maximized Value
The strongest distribution network in the industry
• 182 independently owned dealers• 105,000 employees• 3,000 branches and rental stores in 180
countries
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