Why Equipment Simulators ?

1. Why Equipment Simulators ?

2. Caterpillar Equipment Training MISSION Assist our customers in improving their return on investment from the use of Caterpillar products and services

3. Situation: • World equipment fleet not safely / effectively utilized • New equipment not used as designed • Equipment abused /accidents • Licensing and regulatory pressures building • Deepening skill vacuum: • Exit bubble • Entry shortage • Consequence: • End-user ROI potential capped • Negative effect on perception of value • Loss - all parties • Conflicting, costly, confusing standards • Work delayed, not started, purchases delayed

4. What’s the Reaction? User sees need, wants to change, but . . . - perceives costs of correction as too high - feels no regulatory “force majeur” - competitors have same problem Actual costs of correction are high: - equipment - time - production loss - effectiveness of training is low “There is no help!” Some users do not see need ( ! )

5. What’s at the core? Traditional training programs targeted on some basic level of competency that may, or may not be defined in regulations, policies, etc. All too widely, these efforts are viewed as pure cost. The focus is not on proficiency and the surety that knowledge and skill underlie safety and profit.

6. How is this to be addressed ? Traditional training programs targeted on proficiency plus Employment of tools and techniques from similar * industries: aircraft, shipping, heavy lifting, railroads, surgery, military vehicles Technological advances have lowered costs of these tools, SIMULATORS, dramatically-10 years *Definition of similar: high capital cost, high operating cost, critical nature of emergency techniques, high risk to human and equipment

7. Caterpillar Equipment Training Sim I

8. Simulator Evolution Increasingly employed on a commercial basis: Cranes, trains, ships, emergency vehicles Interest turning to earthmoving/mining equipment: Skill development efficiency Effective at all levels of skill development “Infinitely” flexible Consistent Risk free Systems integration

9. Simulator Application • Evaluation • Basic training • Production refresher • every 6 months • old & new hands • seasonal prep • New mine situations • New equipment • Supervisor training • Candidate aptitude • Perform all operations before put on truck • Periodic booster • Reinforce new hands • Refresh/correct old • Rain, ice, snow • Pits, hauls, night/day • Systems, features • Awareness

10. Simulator - Series I

11. Simulator Series II Operator station on long axis - floor to ceiling view Air conditioning Air compressor

12. Truck setup Shovel setup

13. Installing shovel module

14. Arctic package for Nuna Logistics

15. Feedback • Print out an operator's detailed report, and log or "play back" the operator's session to evaluate performance

16. VIDEO

17. Results? Most common benefit mentioned Increased equipment availability Most commonly observed errors: Improper service brake use Failure to use/don’t know how to use retarder Engine overspeed Failure to react correctly to emergencies Do not react to/know levels of warning Wide variety of traffic/safety violations

18. Experience - I USA December, 2000 35 operators 1 hour each Long history of brake problems - 190 ton truck fleet Not one operator used the retarder Mine management initiated complete retraining program for 2001 and 2002

19. Experience - II USA 2001 42 operators 2 1/2 hours each Service brake used incorrectly 2028 times/12 hr Shift fwd while moving backwards 156 “ “ Shift reverse while moving forward 234 “ “ Service brake not engaged 936 “ “ when park brake released

20. Experience - III Labrador September, 2001 182 operators I hour each 5761 faults recorded 85% among 6 faults 66% in one fault - Service Brake used incorrectly Emergency tests 40% failed to extinguish fire Employee morale Initial concern, turned very positive - “high tech"

21. Experience - IV British Columbia October, 2001 85 operators 3 hours each Program any road condition, truck problem without risk Common criteria for evaluation Neutral “instructor” - the computer Objective basis for comparison and seeing improvement

22. Simulator Training Cost Strawman 40 trucks 160 operators 20% turnover 32 new operators per yr @ 20 hrs each 640 hrs 128 experienced operators at 4 hours each 512 64 op candidates @ 2 hrs each 128 Total hours 1280 hrs Sim interest and depreciation $50,000/yr Sim operating expense 10,000 Instructor @ $30/h 38,700 Total annual expense $98,700 Cost per hour $77

23. Simulator Training Cost Strawman 20 trucks 60 operators 20% turnover 12 new operators per yr @ 20 hrs each 240 hrs 48 experienced operators at 4 hours each 192 24 op candidates @ 2 hrs each 48 Total hours 480 hrs Sim interest and depreciation $50,000/yr Sim operating expense 5,000 Instructor @ $30/hr $14,400 Total annual expense $69,400 Cost per hour $147

24. Simulator Application • Evaluation • Basic training • Production refresher • every 6 months • old & new hands • seasonal prep • New mine situations • New equipment • Supervisor training • Candidate aptitude • Perform all operations before put on truck • Periodic booster • Reinforce new hands • Refresh/correct old • Rain, ice, snow • Pits, hauls, night/day • Systems, features • Awareness

25. Integrated Training Program Evaluation Current and candidates Foundation skills Proficiency, emergency Re-qualification After an incident “Check ride” Semi-annual New conditions Layout, equipment, seasonal Effective program requires use of simulator and actual equipment - simulator not a “silver bullet”

26. Increased Production Lower Repair Costs Longer Power Train Life Fewer Sudden Death Tire Failures Reduction in Injury Rates Fewer Safety Citations Lower Employee Turnover Reduced Downtime Increased GET Life Reduction in Structural Failures Longer Tire Life Higher Resale Value Reduced Insurance Costs Improved Employee Morale Greater Safety & Profit What Can Proper Operator and Supervisor Training Deliver?

27. Caterpillar Equipment Training Get the most out of your investment