Caterpillar, Inc.CAT

Presented By Group 4:Divyadeep Goel (191138)

Praveen Sankisa (191158)Sudarshan (191177)

Sukrita Goyal (191178)Sunny Behl (191179)

Introduction• Founded in 1925 as Caterpillar Tractor Company (Cat) by Benjamin Holt and Daniel Best

• Worlds largest manufacturer of Diesel Engines and Heavy Machinery.

• 75% of the manufacturing in the US and over 50% of sales outside US.

• Sales over $41billion in 2006, $32 billion in 2009 and $39 billion in 2010.

•Has an extensive dealer network of 220 dealers worldwide – a source of competitive advantage.

Strengths & Weaknesses

Strengths

Holds large portion of market share(53%)

Growth through production not acquisition

Distribution system

High brand recognition

6 SIGMA

Weaknesses

Recent employee reduction

Not Service Oriented

Case Summary

Product centric Service Oriented

Transformation

Why Transformation?

Margins on products are growing thin.

Increase in competition. Some of the competitors include:

Komatsu CNHCumminsJohn Deere

Hence, additional revenue = SERVICES

Plan of Action

Bundle Customer Service Agreements(CSA’s) along with the product.

Select three pilot Dealerships in Latin America(worth $1 billion) and sell the CSA’s.

Find solutions to fill these Gaps.

Gaps Assessment with the three pilot Dealerships.

2000

• Employee Satisfaction• Leadership• Reliable Returns• World Class Core process• Growth

2011

Culture-Create a culture of sustainable development in all our business units. Operations-The Caterpillar Production System provides the recipe for deploying and sustaining excellence in our facilities.Business Opportunities-. Identify and pursue business growth opportunities created by sustainable development.

Critical Success Factors

Ref: 2009 wRatings corporation Pg. 7

Ref: 2009 wRatings corporation Pg. 7

GAP

4 Providers Gap

Expected Service

Perceived Service

Customer Gap

The Listening Gap

The Service Design and standard Gap

The Service Performance Gap

The Communication Gap

Listening GapCustomer Expectation

Company perceptions of customer expectation

Marketing Research

Orientation

• Partially designed Surveys

• Sporadically performed

Upward Communication

• Interaction b/w management & customer

• Too many layers eg. PM CSA

Relationship Focus • No Segmentation

Service Recovery

• No post interaction customer survey

Service Design & Standard GapsCustomer Driver Service Design &

Standards

Company perceptions of customer expectation

Poor Service Design

• Few CSAs• CSAs were not branded• CSAs were created in an

ad hoc manner

Customer Driven

Standards

• Promised but expectations not met

• Operationally focused not customer driven

Inadequate physical

evidence and service escape

• Customer Interact with sales people

• what to offer and what to deliver

• Contries: Culture, law, structure

Service Performance GapCustomer Driven Service Design &

Standards

Service Delivery

• Few CSAsDeficiencies

in HR Policies

Customer Role

Service Intermediarie

s

Failure to match supply & Demand

• Qualified Mechanics• Communication Skills• Lack of Team Work

• Customer & Dealer Communication

• No Reliable System

• Little advance notice• Technical Shortages

during peak construction session

4. Communication Gap

Promotion exclusively focused on product features and benefits.

No advertisements describing CSA’s.Different CSA’s were described and named in

the same way.Absence of clearly defined service features led

to over-promising.No consistent selling process that explained

and differentiated the individual CSA offerings.

Recommendations

The customer needs and expectations under gap 1 which need to be gauged can be classified into following –

1. Responsiveness – Service number availability with consumer. Responsiveness of the tele automated system with

authorized call center in attending the call. The response time of the call center executive in

handling the call. Serviceman in attending to the call and taking the

feedback The time taken by company to act on the feedback.2. Empathy – Individualized attention. The behaviour of the serviceman.

3. Assurance – The knowledge level of call center executive

or the person taking the call in assigning correct serviceman.

The skills of the serviceman in attending the call and servicing the machine properly.

4. Reliability – The ability of the executive taking service

call in understanding the call properly and assigning the proper serviceman.

The ability of the serviceman in accurately diagnosing the problem and solving it.

5. Tangibles – • The tools and servicing equipments with the

serviceman.• The latest technology gear in diagnosing the

problem.• The call attending software should be highly

receptive and customer friendly.

Ref: 2009 wRatings corporation Pg. 7

Ref: 2009 wRatings corporation Pg. 7

1. The CSA’s need to be more in number focusing on different aspects like relationship with customer, branding, convenience, timing, etc.

2. The service literature was not available and serviceman and salesman were not trained on CSA’s.

3. The CSA’s varied across dealers and customers which made them non standard leading to false promises.

4. Improper coordination among dealers led to confusion in delivering CSA’s.

5. Due to varied geographies and cultures of customers, CSA’s had to be a bit customized but under certain standards.

Information regarding the expectations of customers from CSA’s

6. The timeline of taking the surveys need to be changed to quarterly and after 3 months of rendering the service.

Different CSAs

1. “Do it for me” – larger customers Customized, yearly contracts

2. “Do it with me” – medium customers Standard CSAs with option of extra services No/ little Customization

3. “Do it myself” – small customers Altered standard CSA No customization Finance support – service package included in the

loan

About CSA (Customer Support Agreements)

Highly customized and complex– content, length, cost

Sold separatelyLarge customers – high loyaltyLimited the CSA marketability and dealer

operational efficiencyPM CSA – technician activities were not build

explicitly into contracts

Standards and measures to be set up in Gap 2 to deliver to customer expectations

Standard CSA – defined process, terms and conditions. It should be part of performance evaluation for dealership and its employees.

Focus on speed and response time, create service Blueprint

Very formal since it will give competitive edge

How to create and design new CSA

Idea Generation- Screen idea Concept development and evaluation – Test

concept with customers and employeesBusiness Analysis – Test for profitability and

feasibility Service development and testing – conduct

service prototype testMarket Testing – Testing service and other

marketing Mix elementsCommercialization

How should they get everyone to learn about them and deliver them

Service/sales expert - KRAFormal trainingMentoring Using technology – tools like CRM -

Standardized and customized reportsEmpowering techniciansInternal communication channel like extranet,

portalsFixed targets for teamDedicated team and equipments

How dealerships overcome Gap - 3

Tie up with technical institutes like ITIs e.g.- Honda in Rajasthan

Cross trainingPerformance appraisals - mandatory training of soft skills,

variable paysMeetings of different HODs daily for better understanding of

problems and communicationCRM, Scheduling of resources should be done accordingly,

daily reports which tell about Customer care centre should be developed on each dealership Introducing shift system in dealerships during peak monthsFocus on monthly package and schemes like additional service

etc should be given to those who are buying this package.Proper maintenance of records.Monthly internal audits

1. Service Circulars – with the servicemen, dealers, etc.

2. Service Manuals – these contain the complete info about the machine and how to operate or service it.

3. Brochures4. Training Modules – regular training sessions

on and off line.5. Dedicated self service websites.6. Service camps.7. Monthly Customer meets.8. Internal web portals giving product info.

Internal and external material to communicate and operate CSA’s

Thank You