Cat Logistics: Customer Reference Video

Cat Logistics offers supply chain services to companies in aerospace, automotive, consumer durables, electronics, and other industries. Discover how the organization is using SAP solutions to dramatically reduce development, implementation, maintenance costs, and improve service levels.

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    • Caterpillar Logistics Services provides logistic services for the Caterpillar, the parent company, and for other external companies. We run the aftermarket service parts supply chain for Caterpillar, and we provide a variety of logistics services for other companies in the automotive industry, aerospace, construction, high-tech, and other sectors. Caterpillar Logistics, in trying to provide the logistic services particularly in the area of order management, service parts planning and execution, warehouse management, needed an integrated system solution. And then we decided that we should partner with somebody and find a solution that would allow us to run the business efficiently. And as we looked at different leading vendors, we were very happy with what SAP was able to bring to the table. We were also impressed by their financial viability and we decided to partner with SAP. We also wanted somebody who would continue to invest the research and development dollars in making the solution even better, and we were quite impressed with what SAP had done with other products and we were very impressed with the commitment they showed for this service parts inventory management space, or service parts management space in general, more than inventory management. Caterpillar expects by implementing this solution that our IT costs will begin to go down. We expect our development costs for developing IT solutions to go down by 40%. We expect the cost of implementing IT solutions for running our service parts supply chains, just for the Caterpillar business, we expect it to go down by about 30%. We also believe the ongoing maintenance costs to keep our systems running for service parts supply chains will go down by 20%. So these are the kinds of benefits we expect by implementing this solution that we co-developed with SAP. We provide logistics services to external companies. And a number of our clients, just like Caterpillar, have been going global. And they all have a need for multi-language capability in solutions, multi-currency capability in solutions. They want solutions that take into account the global trade regulations. And SAP has a solution that offers all of this. The service parts planning solution, which is for the supply chain inventory management, we expect it to give service level improvements anywhere from 5% to 10% for even some of the well-run companies. If a company hasn't been doing that well on that service parts inventory management front, they should see improvements even on the order of 20% to 25%. We expect inventory reduction to the tune of 15% to 25% for some of the well-run companies and maybe as much as 30% for companies that haven't been paying attention to this area. When it comes to the warehouse management area, we expect productivities to improve anywhere from 25% to 30% for most of the companies.
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