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Strategy Execution

Caterpillar Strategy for Profitable Growth

Caterpillar is committed to improving operating profit and free cash flow while providing better solutions to customers and creating more value for our people, partners and shareholders. We do this through our strategy for profitable growth, which has three pillars: operational excellence, expanded offerings and services. Here’s how we executed each of these pillars in 2020:

Operational Excellence

Continuously improving our core competencies, including safety, quality, Lean and a competitive and flexible cost structure.

  • Delivered our best safety performance on record, as measured by recordable injury frequency, while providing essential products and services.
  • Leveraged our Lean culture to adapt and problem solve during the pandemic to continuously deliver customer value. Continued to focus on Lean thinking and cost management to support services and aftermarket growth.
  • Implemented an enhanced sales and operation planning (S&OP) process, which resulted in better alignment with dealers. This enables Caterpillar to be more responsive to changes in customer demand and allows dealers to better manage their inventories to support customer demand.
  • Focused on manufacturing flexibility, working across the value chain, reducing lead times, and becoming leaner to meet fluctuations in demand cost-effectively.

Expanded Offerings

A growing equipment portfolio that meets a broad range of customer needs.

  • Launched the GX line of excavators in China to provide customers even more choices to meet their needs while delivering up to 15% lower fuel consumption and up to 25% lower maintenance cost.
  • Introduced the new D9 GC that is versatile enough to be used in various applications, such as ripping overburden, production dozing, stockpiling, winching, site maintenance, fleet support and reclamation.
  • Collaborated with a South American customer to supply a zero-emissions battery-powered locomotive for yard and switching applications through our Progress Rail subsidiary.
  • Expanded our combined heat and power solutions, including the G3520H, the first EPA-certified gas fuel generator for standby power.
  • Introduced Cat® Command for Compaction, an operator-assisted, semi-autonomous technology that automates the compaction process based on operator inputs while increasing consistency, coverage and safety.
  • Introduced 23 new lower-cost Cat GC standby generator sets ranging from 33-1100 kVA to reach new retail electric power customers.

Services

The many ways, including digital offerings, that we help customers succeed after purchasing a product.

  • Supported customers affected by the pandemic through Cat Financial’s Customer Care Program, which offered payment relief arrangements to meet a range of customer situations.
  • Maintained high aftermarket parts availability throughout the pandemic, ensuring our customers were able to continue to perform essential work.
  • Built on our 30 years of success in autonomy, with our customers moving more than 2.76 billion tonnes autonomously with zero lost-time injuries.
  • Improved the quality of our data-driven aftermarket opportunity management tools to help dealers provide customers with relevant information to help simplify their service and repair decisions.
  • Optimized our parts distribution network efficiency through deployments of autonomous technology, which will increase warehouse density and velocity while enhancing safety to further support a zero-injury culture.
  • Announced the acquisition of Weir’s Oil & Gas business, now SPM Oil & Gas, expanding our global presence to serve our Oil & Gas customers with an enhanced range of well service products and over 50 service centers.
  • Increased percentage of Cat parts sold online, with a record number of customers purchasing online.
  • Enhanced The Cat Rental Store customer portal features, including telematics, enabling customers to now see equipment location, fuel levels, and time utilization, leading to rapid adoption.

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