Caterpillar Industrial Products now OEM Solutions Group: taking systems and services to other OEMs; following the Cat engine model

Diesel Progress North American Edition, March, 2004 by Mike Osenga

"As a result, we've picked those segments where we don't have to go and explain who Caterpillar is. And within that, we are finding customers where the relationship can eventually become large enough that we can proceed with confidentiality agreements and technology sharing.

"We go in and ask a customer 'what is keeping you awake at night?'" From that, Phipps said, "there are lots of things we can leverage around the world. It could be global purchasing or supply chain management. We have done collaborative R&D for people. We've done testing. We can bring in the resources of CLS-Caterpillar Logistical Services or Cat Financial.

The starting point within that, Phipps said, isn't necessarily complete vehicle systems. "Take hoses and couplings" he said. "We're very good at that. Sometimes that's the most practical way to start a relationship.

"The customer says they're buying from five different hose and coupling operations. They want to know if we can do a Kanban system and restock their racks every two days. If we do that well, they'll look to see what we can do in other areas."

Phipps made a strong point in that OEM Solutions is not just a sales organization, maintaining a staff of senior application engineers and a total engineering applications resource of more than 40 people located in North America, Europe and Asia.

"These people come from all parts of Caterpillar," he said. "We have over 300 machine models to draw from and they know where to go to find an application where we put the oil cooler here or the heat exchanger there, or one where the turbos are mounted in this way or that has a different oil pan.

"As a result, there is a tremendous menu of custom configurations that Caterpillar has manufactured that we can tap into. If something new is required, we then go back to the Transmission Business Unit or Hydraulics or Electronics and draw on their engineering expertise.

"It is taking a lot of focus and effort to not try and spread ourselves too thin, considering all that we can bring to market. But Cat OEM Solutions isn't just about a bunch of different products we can sell.

"We bring all sorts of benefits in terms of cost structure and commonality. We've already validated the designs through our own equipment. That's a plus. We don't have to start with a clean sheet of paper. We can show an equipment manufacturer real world operating reliability data from our dealer repair frequency charts.

"We can bring a lot to the table. We can talk about where we think drivetrains will be in five years. Here's where our next generation of electronics is taking us. Here's what we're doing in hydraulics.

"With emissions, cooling is critical and here's what we can do in that regard. And maybe most importantly," Phipps concluded, "here's how these product families can fit together in your machines. That's a pretty powerful message to bring to the market"

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