Caterpillar Logistics Services, Inc.

Cat Logistics

01/26/20
Maureen Healy
Miami DC

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

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

Cat Logistics
Heritage

Logistics Part of Caterpillars Heritage

Producing and supporting high-value, durable goods working in timesensitive, 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

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

The Differentiator

What sets Caterpillar apart?

Superior customer service through 180 Dealers
1,890 Dealer branch stores
1,467 Dealer rental outlets

Enabled by world class parts distribution

Cat Logistics distributes more than 750,000 unique
Caterpillar part numbers, with worldwide parts
availability of 99.7%

Caterpillars ability to get the right part in the right place at the
right time separates us from the competition

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

Caterpillar Culture

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

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

Our Values in Action and Leadership

Through living Our Values in Action, Caterpillar Production System
(CPS) will be an enabler for Caterpillar to achieve its Vision 2020 and
business strategy

Leadership imperatives
Leaders building leaders
Making great leaders
Employee Opinion Survey (EOS) and action planning

LEAD

with values

BUILD

customer focus

Integrity
Excellence
Teamwork
Commitment

SET

high expectations

DELIVER

results

DEVELOP

inspire and engage

2010 Caterpillar Logistics Services, Inc.
Caterpillar: Non Confidential

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

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

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

10

Cat Logistics

Caterpillars Supply Chain

Supply Chain

Supplier

Manufacturing

Distribution

Dealer / Retail

Consumer

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

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

12

Supply Chain Excellence

Cat Distribution Services
MORTON

Manufacturing Logistics

MOSCOW

GRIMBERGEN

SHANGHAI
SINGAPORE
PIRACICABA

JOHANNESBURG
MELBOURNE

Transportation

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

External Client Business

13

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
MOSCOW
Serving Cat dealers world wide
MORTON GRIMBERGEN
SHANGHAI
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

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

14

SINGAPORE
PIRACICABA

JOHANNESBURG
MELBOURNE

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

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

Suppliers

Regional Inbound
Logistics Center (ILC)

15

Logistics Service
Center (LSC)

Manufacturing
Plant

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 Caterpillars 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, tracktype tractors, wheel loaders and skid steers
Modeling, implementation and operations

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

16

The External Logistics

Business

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 Caterpillars
time-sensitive, service-critical, unpredictable demandleverages 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

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

18

Significant Growth & Long Term Relationships

INDUSTRIAL

AUTOMOTIVE

MAINTENANCE, REPAIR & OPERATIONS (MRO)

(Mining, Oil & Gas)

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

O THE R SERVICE PARTS

(Aerospace & Defense, Technology, and Consumer Durables)

19

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

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

20

Service
Parts
Management

Cat Logistics Global Network

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

21

Cat Logistics Today

Americas

76 Locations
7,000 Employees

Europe, Africa, Middle East & CIS

6 Continents
23 Countries
20 Languages
130 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 SKUs Serviced/Yr
42 Locations
4,600 Employees

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

22

Asia-Pacific

12 Locations
800 Employees

Miami DC Overview

Miami Lakes, Florida

2010 Caterpillar Logistics Services, Inc.
Caterpillar: Non Confidential

23

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)
C2Building2002

YardExpansion
(NotShown)
2007

C1Building1997

CBuilding1976

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

24

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 3 rd 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

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

25

Problem Statement
Current Utilization by Concept

Need 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.

TYPE

In scope: Improved use of current

concepts, new storage concepts, off-site
Out of scope: Facility expansion, Yard

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

26

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

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%

Facility Layout

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

27

Facility Process Areas

InboundMaterialFlow(Red)

Maint.

Inbound/InboundSort

Office

StagingBays PackLanes

LoadingDocks

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

OutboundMaterialFlow(Blue)
28

Facility Storage Areas

YRD
FLR

ELG ELG/GLS

FLR CTL HRK HRK

FLR
YRD

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

RCK

RCK

FLR

RCK

FLR

29

MZB

Data Files
Item Master (Parts Stocked in Miami)

Bin Map

Sales History

Part Number

Location

Part Number

Recommended Storage Quantity

(RSQ)

Part # (if occupied)

Country of Origin

Country of Origin

MR Qty

Location Storage Quantity (LSQ)

Customer Code

Facility Stock Available (FSA)

Pack With ID

Concept type (CAT term for slot)

Order Class

Concept size (slot size)

Weight

Concept sector

Volume

Min
Max
Pieces per entry
Forecast annual demand
Forecast annual entries (lines)
Package Quantity

Required Completion Date

Weight

Picks (Impact of package

quantities)

Length
Width
Height

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

30

MZB (Mezzanine/Bins)

Fullquantityinonelocation
Partsunder30lbs
Handpickedontocarts
2010 Caterpillar Logistics Services, Inc.
Caterpillar: Non Confidential

31

RCK

Partsmayhavemultiplelocations
Partsunder50lbs
Handpickedusingorderpicker

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

32

CTL (Cantilever)

Cratedanduncratedparts
Heavyparts
Partsmayhavemultiplelocations
Machinepickedwithreachtruck
2010 Caterpillar Logistics Services, Inc.
Caterpillar: Non Confidential

33

ELG (Elongated)

Elongatedparts
Handpickedusingorderpicker
Difficulttostoreandpick
Slowermovingparts

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

34

FLR (Floor)

LargeCrates,Filters,andRollers
Primarilypickedwithreachtruckorhoist
Mixofcommodities

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

35

GLS (Glass)

Fragileitems
Storedvertically
80%Handpicked
20%Palletizedpickedwithreachtruck

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

36

GSK (Gasket)

Longnarrowcommodity
HandPickedwithorderpicker
Fragileitems

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

37

HRK (Heavy Rack)

Machinepickedwithreachtruck
Mixedcommodities

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

38

YRD

WeatherResistantItems
Mostitems>50lbs

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

39

QUESTIONS?

2010 Caterpillar Logistics Services, Inc.

Caterpillar: Non Confidential

40