Customer Availability Focus

THE VISION THE FOCUS

Leverage one integrated network to deliver Definition of Winning: Increase parts sales and
CONSISTENT PREMIUM PARTS AVAILABILITY customer loyalty through BETTER PARTS
leading the industry in cost efficiency and asset utilization AVAILABILITY.

TAKING THE CUSTOMER’S PERSPECTIVE

Does Cat deliver my complete Service parts order on time?

Aligned with the vision OTIF

Order level Does Cat/Dealer DELIVER
my COMPLETE ORDER on
Time?

PDI (Parts Data Interfaces) CCPA OTIL

Does Cat/Dealer HAVE Does Cat/Dealer DELIVER
2013 → Current Line level
my individual parts my COMPLETE LINES on
AVAILABLE? time?

PIC 1.0 (Parts Inventory Collaboration) Sourcing On time delivery

2014 → Current
Dealer Centric Customer Centric
From Line Level
Measure Sourcing
To Order Level
Measure On Time Delivery

CATERPILLAR CONFIDENTIAL: GREEN 1

Caterpillar: Confidential Green

 Partnering to Improve Customer Availability

Network footprint AVAILABILITY TARGET “Definition of Winning”

▪ Nodes/locations Both Cat and Dealer performance is required to close the gap in availability
▪ Role/type of nodes
(e.g., emergency vs.
full facing)
C AT E R P I L L A R Dealer
Inventory strategy Focus of today’s session
CATERPILLAR NETWORK STUDIES PIC 2.0
▪ Which SKUs Define node locations & roles, integrating Advanced Recommendations
▪ Where inventory management best practices to move toward true service potential
▪ When
▪ How much OPERATIONS EXCELLENCE METRIC
Focus on lean projects to create a Define Dealer specific targets in Fact Packs,
more efficient workstream enabling availability target gap closure
Ops excellence
through lean CONTINUOUS IMPROVEMENT CONTINUOUS IMPROVEMENT
Further develop our CAT IM systems Active engagement and feedback for PIC
▪ Productivity to focus on end customer needs
▪ Densification
▪ Automation
CATERPILLAR CONFIDENTIAL: GREEN 2

Caterpillar: Confidential Green

 PIC Journey and 2.0 Overview

Implementation of the new collaboration PIC 1.0 Lessons Learned

PIC 1.0 2014 — 2018
platform to help plan Dealer inventory. ▪ Global Dealer data: improved setting for all Dealers
▪ Expanded simulation capability: better, quicker
analysis
Proof of Worked with selected Dealers to identify Q1 & Q2 2019
▪ Dealer knowledge: experience with pain points &
Concept opportunities to further optimize Dealer challenges
inventory.
Continuous Improvement
PIC 2.0 New Program shifting the PIC focus from Q3 2019 –
▪ Expanded PIC team, expanded skills sets
Q1 2020
implementation to optimization. ▪ Academic partnerships
▪ Advanced optimization techniques
Metrics
PIC Execution (Parameter and Order Acceptance) Availability Focus
New metric – Inventory Plan Advancement index (IPA) – that measures the gap ▪ Focus on improved customer experience across the
between current settings and optimized, recommended settings CAT parts networks
▪ Inventory Plan Advancement (IPA) Index
As always…. ▪ Research & analytics: identify most cost-effective
investments
Dealers will retain decision rights on what parameters to implement in production

CATERPILLAR CONFIDENTIAL: GREEN 3

Caterpillar: Confidential Green