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Caterpillar Logistics Services, Inc. Cat Logistics

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

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Caterpillar Logistics Services, Inc. Cat Logistics

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  1. Caterpillar Logistics Services, Inc.Cat Logistics 01/26/20 Maureen Healy Miami DC

  2. 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

  3. Cat Logistics Heritage

  4. 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. 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

  6. Caterpillar Culture

  7. 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

  8. LEAD with values BUILD customer focus SET high expectations DELIVER results DEVELOP inspire and engage 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 Integrity Excellence Teamwork Commitment

  9. 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. 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

  11. Cat Logistics

  12. Supply Chain Supply Chain Supplier Manufacturing Distribution Dealer / Retail Consumer 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

  13. MOSCOW • MORTON • GRIMBERGEN SHANGHAI SINGAPORE JOHANNESBURG PIRACICABA MELBOURNE Supply Chain Excellence Cat Distribution Services Manufacturing Logistics Transportation External Client Business

  14. MOSCOW • MORTON • GRIMBERGEN SHANGHAI SINGAPORE JOHANNESBURG PIRACICABA MELBOURNE 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

  15. Regional Inbound Logistics Center (ILC) Logistics Service Center (LSC) Manufacturing Plant Suppliers 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 proximalmanufacturing plant(s) / Points of Use (POU) • 19 LSCs supporting 21 manufacturing facilities

  16. 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

  17. The External Logistics Business

  18. 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. Significant Growth & Long Term Relationships I N D U S T R I A L A U T O M O T I V E O T H E R S E R V I C E P A R T S (Aerospace & Defense, Technology, and Consumer Durables) MAINTENANCE, REPAIR & OPERATIONS (MRO) (Mining, Oil & Gas)

  20. Service Parts Management 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

  21. Cat Logistics Global Network

  22. Cat Logistics Today Europe, Africa, Middle East & CIS Americas 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 Asia-Pacific 76 7,000 Locations Employees 12 800 Locations Employees 42 4,600 Locations Employees

  23. Miami DC Overview Miami Lakes, Florida

  24. 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) C2 Building 2002 Yard Expansion (Not Shown) 2007 C1 Building 1997 C Building 1976

  25. 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. 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. • In scope: Improved use of current concepts, new storage concepts, off-site • Out of scope: Facility expansion, Yard

  27. Facility Layout

  28. Facility Process Areas Inbound Material Flow (Red) Maint. Inbound / Inbound Sort Office Staging Bays Pack Lanes Loading Docks Outbound Material Flow (Blue)

  29. Facility Storage Areas Facility YRD ELG ELG/GLS FLR FLR CTL HRK HRK RCK RCK MZB FLR FLR YRD RCK FLR

  30. Data Files • 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 • 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) • Item 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

  31. MZB (Mezzanine/Bins) Full quantity in one location Parts under 30 lbs Hand picked onto carts

  32. RCK Parts may have multiple locations Parts under 50 lbs Hand picked using order picker

  33. CTL (Cantilever) Crated and uncrated parts Heavy parts Parts may have multiple locations Machine picked with reach truck

  34. ELG (Elongated) Elongated parts Hand picked using order picker Difficult to store and pick Slower moving parts

  35. FLR (Floor) Large Crates, Filters, and Rollers Primarily picked with reach truck or hoist Mix of commodities

  36. GLS (Glass) Fragile items Stored vertically 80% Hand picked 20% Palletized picked with reach truck

  37. GSK (Gasket) Long narrow commodity Hand Picked with order picker Fragile items

  38. HRK (Heavy Rack) Machine picked with reach truck Mixed commodities

  39. YRD Weather Resistant Items Most items >50lbs

  40. QUESTIONS?

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