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2019 | Annual Report

Executing Our Strategy

Partnering with Dealers to Deliver Innovative Services

Aftermarket services have long been part of Caterpillar’s value proposition — and our network of Cat® dealers has always been the primary way we’ve delivered these services to support our customers. With the refresh of Caterpillar’s enterprise strategy, along with our intention to double Machinery, Energy & Transportation (ME&T) services revenue by 2026, we’re further strengthening our service offerings. Enabled by advances in digital technology, we’re introducing new and innovative ways to support dealers in providing services that help customers be more productive and lower their owning and operating costs throughout the product lifecycle.

To start, our distribution services divisions (DSD) and field-facing teams are partnering with dealers to identify more opportunities for services growth. As dealers grow their service capabilities, the Dealer Operational Excellence Program provides a way for us to measure dealer performance in a consistent way and drive continuous improvement in the areas of parts, service, sales and marketing, digital and rental. Performance standards increase each year, challenging dealers not only to exceed market expectations but also to surpass customers’ ever-growing needs.

With Caterpillar’s support, dealers across our network are raising the bar. For example:

  • Providing support for certified rebuilds that not only bring machines up to current standards, but also enhance their functionality with the latest technology and upgrades.
  • Increasing adoption of digital tools like Cat Inspect and the Cat App, which provide detailed information about machine health, creating streamlined workflows and opportunities for further customer support.
  • Improving parts availability for customers through parts inventory analytics to create visibility into parts distribution center inventories across the Caterpillar network.
  • Expanding rental capabilities, complemented by the new Cat Rental Store website and mobile app.
  • Using Customer Value Agreements (CVAs) to build valued connections with customers over the life of their equipment.

Cat® dealer Zeppelin, which is based in Germany and active in more than 13 countries, has been particularly successful with CVAs. The dealer’s sales group and product support group work together closely to ensure that every sale takes the entire life of a machine into account. As a result, more than 90% of new machines that Zeppelin sells are accompanied by a CVA. After a purchase, Zeppelin uses robust email communication to inform customers when parts are due for replacement and ships parts in easy-to-use kits — all of which continues to strengthen the customer relationship.

“It’s a tool for our customers to improve their business — and it works,” says Michael Heidemann, Dealer Principal of Zeppelin. Sebastian Collas, a Zeppelin customer, echoes this sentiment: “Our core competence is earthmoving, not repairing machines,” he says. “With the full-service contract from Zeppelin, I can fully rely on machine uptime and the best possible cost calculation when it comes to maintaining and repairing my equipment.”

Achieving our goal to double ME&T services revenue will require closer collaboration than ever before between Caterpillar and our dealers worldwide. None of us can do it alone. We are committed to providing the resources, training and tools that dealers need to succeed, because when dealers perform at peak levels, it’s a win-win-win for dealers, customers and Caterpillar.

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