Who is Caterpillar?Cat DealersCat Business Units Worlds leading
manufacturer of construction & mining equipment; diesel &
natural gas engines; and industrial gas turbines. Provider of
financing, insurance, leasing, counter-trade and logistics $20.1!
sales in 2002, $.2! e"ported from t#e $.%.&"pect sales gro't#
to $(0! b) t#e end of t#e decadeWho is Caterpillar?Cat DealersCat
Business Units &mplo)s *+,,,0 -orld'ide .anufacturing
facilities in 21 countries. .ar/eting #eadquarters in 11
countries.0istributions 1enters in 1, countries.Cat DealersCat
Business Units Products distributed around t#e globe b) independent
dealer network ,0,000 people dedicated to the customer *0 0ealers
in t#e $% and over 10 outside 1+20 branc#es 3 1100 4ental %toresOur
DealersWork Tools & Services 5ur aim is to be t#e leader in
providing 'or/ tools and related services t#at enhance Caterpillar
machine performance. .anufacture tools for construction, mining and
forestr) equipment. 5ver 2,00 end items sold in 2002. &mplo) 20
in t#ree facilities.Our DemandSouthworth MiltonSyracuseHO
PennFoleyBeckwithClevelandG &
RAlbanMichianStowersMacAllisterHolt o!
OhioCarter"alkerOhio"hayneBlanchardCarolinaGrePooleFabickFabcoPattenAltor!er#ho$%son
Mchry#ho$%son
#ractor&anceyFabickCarltonRinPowerRinhaver'ellyShe%herd(A
RisPuckett)ouisianaMustan"arren CatHolt o!#e*as+ean Martin #rFoley
#r,ielerButler-ebraska#ractor & ./ui%$ent"yo$in"aner-C
MachineryHaltonPa%e0 "estern States"estern StatesPetersonHolt o!
CalCash$anRust"heeler.$%ire1uinn(ohnsonHawthorneFinnin-C
MachineryKramerToromontHewitt#oro$ontToromontAtlanticCustomer
Overview(Dealers)Medium Sales $Low Sales $High Sales $Customer
buin! criteria3). Cost2). Quality1).
AvailabilityAvailabilityAvailabilityCustomer availabilit
e"pectations1!1. Custome"s held 2 to 3 mo#thso$ %o"& 'ool
i#ve#to"y2. Ma&e(to(Sto)& *"odu)ts +"de" to shi, i# 3-.
wee&s3. Ma&e(to(+"de" *"odu)ts +"de" to shi, i# /(!
wee&s 'oday1. Custome"s hold limited i#ve#to"y2.
Ma&e(to(Sto)& *"odu)ts +"de" to shi, i# 0-1 days3.
Ma&e(to(+"de" *"odu)ts +"de" to shi, i# 3(1 wee&s 1!1.
2eale"s held 2 to 3 mo#thsi#ve#to"y2. Ma&e(to(Sto)&
*"odu)ts +"de" to shi, i# 3-. wee&s3. Ma&e(to(+"de"
*"odu)ts +"de" to shi, i# /(! wee&s 'oday1. 2eale"s hold
limited i#ve#to"y2. Ma&e(to(Sto)& *"odu)ts +"de" to shi, i#
0-1 days3. Ma&e(to(+"de" *"odu)ts +"de" to shi, i# 3(.
wee&s %o"& 'ool )hoi)es have i#)"eased 103 si#)e 4!2eale"s
a"e #ot willi#g to i#vest i# i#ve#to"y $o"$ea" o$
obsoles)e#)eCom,etitio# is toughothe"s a"e ,"ovidi#g
5ui)&availability.Customer availabilit e"pectations have
chan!edWh?1). Meets 2eale" 6 Custome" availability e7,e)tatio#s3).
Meets i#)"easi#g e7,e)tatio#s o$ i#ve#to"y tu"#ove"2). Meets 2eale"
6 Custome" ,"i)e 8 5uality e7,e)tatio#sOur Challen!e#Create a Suppl
Chain that.). Meets ou" $i#a#)ial e7,e)tatio#sma"gi# 8
,"o$it97te"#al:#te"#al85% of Supply isfrom North AmericaProduct
SupplyOverviewCanada: 13%U.S.: 52%Mexico: 20%U.K.: 6.5%Europe:
5%Sweden: 1.5%Japan: 1%Indonesia: 1%Over 2500 End Items Sold in
2002Product Supply vs. DemandSouthworth MiltonSyracuseHO
PennFoleyBeckwithClevelandG &
RAlbanMichianStowersMacAllisterHolt o!
OhioCarter"alkerOhio"hayneBlanchardCarolinaGrePooleFabickFabcoPattenAltor!er#ho$%son
Mchry#ho$%son
#ractor&anceyFabickCarltonRinPowerRinhaver'ellyShe%herd(A
RisPuckett)ouisianaMustan"arren CatHolt o!#e*as+ean Martin #rFoley
#r,ielerButler-ebraska#ractor & ./ui%$ent"yo$in"aner-C
MachineryHaltonPa%e0 "estern States"estern StatesPetersonHolt o!
CalCash$anRust"heeler.$%ire1uinn(ohnsonHawthorneFinning-C
MachineryKrameroro!on"Heitt!oromontoro!on""tlanticMedium Sales $Low
Sales $High Sales $ 3 M$g ;a)ilities 2 *a"t#e"s < =ey Su,,lie"s
3 2ist"ibutio# Ce#te"sFloridaQuebecKasas200 Su,,lie"s!100 *a"t
>umbe"s!ompoet Supply"he #speed$ of repleishmetis critical for
meeti%!ustomer #demad$ whilemiimi&i% 'vetory ivestmet(#esource
$%annin& Mode%$%ans'eed(ac) *o%u!e and #a"es$roduc"sMa"eria%s +
$ar"s,oursSa%es + -pera"ions $%annin& Mix $%annin&Mas"er
$roduc"ion Sc.edu%in&Ma"eria%s $%annin&/e"ai%ed Capaci"0
$%anninou&.1cu" Capaci"0 $%annin&Mar)e"in& Co!panies2
'orecas"s$urc.asin& Execu"ion $roduc"ion Execu"ionS"ra"e&ic
$%ansSc.edu%e $roduc"s per".e 3new4 Supp%0 $%anCo!!i" "o:15.
-rderin& $roduc"s + Ma"eria%s25. Manu6ac"urin&
$roduc"s$nderstandin! Our Customer%s &Demand' (or )roducts15.
17 Mon". Sa%es $%an18 $roduc" 'a!i%ies25. Supp%0 $%an/o we .a9e
capaci"0"o supp%0:/e"er!ine 'orecas" Sp%i"Ma)e1"o1S"oc) ;MS5 9s.
Ma)e1"o1-rder ;M-5 1aterpillar 1onfidential6 7ello' Jan FebMar Apr
May Jun Jul Aug Sep Oct Nov DecS&OP'orecas" pro9ided (0/ea%ers
+ #eps.1102003 ;o"e)astM'S vs. M'+ mi7 is dis)ussed $o" ea)h o$ 1
*"odu)t ;amilies110'orecas"1). Meets 2eale" 6 Custome" availability
e7,e)tatio#s3). Meets i#)"easi#g e7,e)tatio#s o$ i#ve#to"y
tu"#ove"2). Meets 2eale" 6 Custome" ,"i)e 8 5uality e7,e)tatio#sOur
Challen!e#Create a Suppl Chain that.). Meets ou" $i#a#)ial
e7,e)tatio#sma"gi# 8 ,"o$it97te"#al:#te"#alHow are we doing?How are
we doing??#de"sta#di#g the @,layi#g $ieldA*e +lements o( an
e((ective Suppl Chain0rives 1apacit) Planning8acilities, People,
%upplier 1ommitments-#at ma/es t#e customer tic/9 -#at Products,
-#at :ead ;imes, -#at Price&ssential for ac#ieving
