Energy & Transportation
Meeting the world’s growing needs for power and transport.

Segment Sales*
(in millions)

*Includes inter-segment sales

Segment Profit
(in millions)

services

Caterpillar is more than just a prime product manufacturer. We provide expanded services that enhance product life cycles such as aftermarket parts, remote monitoring and remanufacturing. Within rail services, we go beyond the moving train to the surrounding infrastructure. Caterpillar made two acquisitions in 2018 to increase service capabilities for rail customers: ECM and Downer Freight Rail. ECM is an international provider of signal solutions and technologies devoted to the safety, control and enhancement of railway infrastructure. Downer Freight Rail, based in Australia, provides a full suite of rolling stock aftermarket parts and services that complement Progress Rail’s rolling stock services portfolio. An increasing number of products sold with customer value agreements will accelerate our services strategy and give more customers access to these offerings.

Operational Excellence

The Cat® G3600 A4 gas compression engine, manufactured exclusively at Caterpillar’s large engine facility in Lafayette, Indiana, is an industry-leading product in gas compression and transmission. In 2018, Caterpillar saw elevated demand for Cat G3600 engines due to pipeline development in North America, especially in the Permian Basin in West Texas and New Mexico. This increased demand required the Lafayette facility to dramatically increase production while maintaining quality performance and ensuring a safe work environment. Using Lean methodology, a cross-functional team identified a solution to increase capacity for both engines and parts by streamlining assembly and test processes and improving component planning. Rapid improvement workshops helped improve agility on the 3600 line, resulting in significant reduction of sub-assembly process times and an increase in production with only modest immediate capital investment. As G3600 demand remains high, Lafayette’s Lean execution continues to improve service to customers.

Expanded Offerings

Caterpillar’s customers need generator sets that provide maximum value with engines that deliver more power and with lower emissions. In 2018, our reciprocating engine business responded to these needs with the CG Series of generator sets, which increase power output, offer high reliability and reduce costs by operating on natural gas and biogas.

We also completed a series of strategic acquisitions that bring us closer to serving as an end-to-end supplier for customers in key industries. For example, our acquisition of Kemper Valve & Fittings Corp. expands our well service offerings from the pump to the wellhead. In addition to expanded offerings, these purchases are expected to improve our customer loyalty, cost structure, reliability, quality and delivery performance.

Working to Generate Clean Power

Provo Power, a member of the Utah Municipal Power Agency (UMPA), operated a power plant that had served their community for more than 75 years. However, the plant was contributing to air quality issues in the Utah Valley. Provo, Utah’s third-largest city, needed a solution that would help reduce emissions for its more than 1 million residents.

Opting for a fresh start, Provo Power teamed up with Cat® dealer Wheeler Power Systems to create a new, state-of-the-art plant. Powered by five Cat G3520H generator sets, the plant yields more power (13 MW) annually than the previous structure and is considered the cleanest burning natural-gas-fired power plant in the state. The plant allows for peak shaving, reducing power consumption and costs between 10 and 30 percent during periods of maximum demand. Wheeler ensures that generator sets are always ready to run, delivering continual maintenance and technical support.

“UMPA made a commitment to use the cleanest emission control technology and install the most efficient generating equipment to meet customer needs,” says Kevin Garlick, UMPA power resource manager. “Overall, the new plant reduced emissions by 97 percent, representing a quantum leap from the former facility.”