Caterpillar

7/13/2019 Caterpillar

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Case 8-1

Caterpillar Case

Case

8

McGraw-Hill/Irwin

Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
http://www.cat.com/


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Case 8-2

Objectives for Case 8:Caterpillar

To summarize the strategies in the gapsmodel - a structured way to view servicestrategy

To use the gaps model to analyze thestrategies and tactics of an actual firm

To see how service can be used to expandthe offerings of a goods firm


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Case 8-3

Discussion Questions

What else do you need to learn in the Listening Gap(Gap 1) about customer needs and expectations?

LACD had general information from the customer valuesurveys, but this information did not tell them what

service features customers expected in the CSAs. What were they and how could they find out?

In particular, how could they find out what they needed to know toestablish standards in the Design and Standards Gap (Gap 2)?

Should they offer different CSAs to the differentsegments of general construction? What would that imply for research, standards, and

implementation?


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Case 8-4

Discussion Questions

What standards and measures should be set in the Designand Standards Gap (Gap 2) to deliver to customerexpectations? How formal should they be?

How should LACD create and design the new CSAs? How should they get everyone in the dealerships to learn about

them and get on board to deliver them?

How should the dealerships overcome all the PerformanceGap (Gap 3) issues that they faced in order to insure

consistent delivery? What internal and external materials were necessary to

communicate the CSAs to salespeople and customers? What else would be needed?


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Case 8-5

Examples of Caterpillar Products


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Case 8-6

The History of Caterpillar


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Case 8-7

The CaterpillarDealer Relationship


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Case 8-8

The Customer Gap


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Case 8-9

The Service Quality Gaps Model


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Case 8-10

The Importance/Performance Matrix


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Case 8-11

In-class Exercise

Put yourselves in the position of the CaterpillarLACD dealers and staff. You have the informationthat is given in the case and you want to use the

gaps model of service quality to move forward.

Instructions:

Get into a group of four people. Spend 25 minutes

developing ways to close each of the four gaps.Assign a spokesperson from your group to discuss your

framework at the end of the exercise period.


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Case 8-12

Customer Expectations

Company Perceptions ofCustomer Expectations

Ways to Close the Listening Gap

Gap

1


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Case 8-13

Customer-Driven ServiceDesigns and Standards

Management Perceptions ofCustomer Expectations

Ways to Close the Design andStandards Gap

Gap

2


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Case 8-14

Service Delivery

Customer-Driven ServiceDesigns and Standards

Ways to Close the Performance Gap

Gap

3


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Case 8-15

Service Delivery

External Communications to

Customers

Ways to Close the Communication Gap

Gap

4


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Case 8-16

Any industrial manufacturer that hasnot awakened to the fact that it must

become a service business is inserious peril today.

Glen Allmendinger and Ralph Lombreglia

Harvard Business Review


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Case 8-17

Current Services at Caterpillar

Sales

Rental

Repair and maintenanceWarranties

Parts and labor

Customer support agreements

What otherservices

does or canCaterpillar offer?


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Case 8-18

CompanyPerceptions of

ConsumerExpectations

ExpectedService

CUSTOMER

COMPANY

Gap 1:The Listening Gap

Provider Gap 1

PerceivedService


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Case 8-19

Key Factors Leading to Provider Gap 1


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Case 8-20

Types of Questions CaterpillarShould Be Asking Customers

What are the problems you face day in and day out withyour business?

In what ways could Caterpillar help you with theseproblems?

What would make you more efficient in your business? What services would help you when you purchase

equipment for general construction? What services or assistance would help you after you

purchase equipment?

What services or equipment would help you when you buythe product? Can the product be updated with services? Can customer burdens involving customization be

reduced?


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Case 8-21

21

Transaction-based Surveys Added


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Case 8-22

Target Segments for Focus GroupSessions

Because the iron and lead segments offergreat potential, and because their numbersare so large, we will develop and test CSAconcepts for them.

PLATINUM--Big and loyalcustomers, capture most ofbusiness

GOLD Smaller customers, butwe capture most of business.More sales means growingthem as companies.

IRON Larger customers withwhom we lose a large portion ofbusiness. Need to know whatwould drive them to spendmore with Cat.

LEAD Small customers withno brand loyalty to Cat. LowDCAL and low number ofmachines.


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Case 8-23

Iron and Lead Segments

Platinum Gold Iron LeadCustomers Number

PercentCat Eqpmt Number

Avg.PercentParts Sales/Cat Eqpmt

POPS-CAvg. Survey Score

Top ModelsMachine

Engine

Average Age

311%703

237%$3,485182%

5.88CV713

844S

D6C3306B

32083304B

31

33112%712

27%$3,384

311%5.08

420DD6D

D4H34123208

3306B20

1455%

3,776

2638%$77716%6.15D6D

120G

D6R3306B

31263412

27

2,32482%

4,766

248%$579

5%5.61D6D

320L

D6C3306B

32083306

23


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Case 8-24

Customer Support Service Packages


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Case 8-25

CUSTOMER

COMPANY

Gap 2: The Design and StandardsGap

Customer-DrivenService Designs and

Standards

CompanyPerceptions of

ConsumerExpectations

Provider Gap 2


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Case 8-26



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Case 8-27

Example of a Competitors Strategythat Leads to Service Opportunities

GreenStar AutoTrac is ahands-free assistedsteering system. GlobalPositioning System (GPS)satellites are used along

with the StarFire receiverto pinpoint the machine'slocation and to work thefield in parallel lines.


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Case 8-28

GreenStarField Doc

Data Collection

Track cultivation (e.g., seeding) or chemical applications, then, utilize alldata collected to prepare for the next growing season.

YieldMonitoring and

Mapping

Yield and moisture data is collected as you harvest. Meanwhile, aposition receiver uses Global Positioning System (GPS) satellites to

determine your combine's exact location; a processor matches thisposition to the yield/moisture data and records it all on a PCMCIA DataStorage Card.

Map-BasedSeeding

First, use previously collected data from the field to develop a seedingprescription for any field and enter the planting rates that will be usedacross the field (on a PC). At planting, insert the PC Data Card and

KeyCard into the mobile processor. As you drive across the field, theStarFire receiver sends position information to the processor, whichinstructs your planter's variable-rate drive to plant according to the planyou created.

CropTracer Tracks seed size, seed treatment etc.

How can Deere help the customerwith these uses of the AutoTrac?


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Case 8-29

Opportunities for Services based onthe Customers Product Life Cycle

Determining requirementsand justifying purchase ofthe product

Finding a product supplier

Financing the purchase

Installing the product

Modifying other products towork with the product

Adapting the product to itsenvironment or to a specificuse

Maintaining the productand replacing parts

Replenishing materials

(e.g., paper and toner) Training personnel to

use the product

Using the product

Upgrading the product

Disposing of productwaste

Disposing of the product

Which of these are opportunities?


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Case 8-30

Service Encounters Customer Expectations Customer-Defined Standards

ServiceQuality

Identification of Moments of Truth

Sell CSA w/Product

Schedule Service

Perform Backlog Service

Renew/Resell CSA

Perform Service & TA-1Inspection, CM Consultation

Quote Backlog

D i i t l d l IIASA Service


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Line of interaction

Line of visibility

Line of internal interaction

Customer Actions

Onstage Contact

Employee Action

Backstage Contact

Employee Action

Support Processes

Cliente solicitaservicio/Cliente entrega

SMU

Solicitar datos al

cliente/Solicitar SMU

Introducir SMU en MCS

Revisar visitas en MCS

Verificar disponibilidad,

determinar posiblesclientes a visitar

Cliente acuerda con el da devisita y proporciona

ubicacin del equipo

Verificar clientes para la

ruta. Crear ruta econmica

de visita

Abrir orden de

trabajo, buscar

contrato, llenar

solicitud y entregar al

asistente

Asistente abre

solicitud

Solicitar

crdito

De ser negado

verificar motivos ycontactar al cliente

Cliente propone unasolucin de crdito

Negado

se imprime

aprobacin, se

cambia status de

orden a open y se

crea segmentos

Aprobado

Se revisa contrato

para ver repuestos, se

llena e ingresa

requisicin en el

sistema

se retiran repuestos de la

bodega y se firma el

shipping

Se llama a clientes a

confirmar visita yubicacin de equipos

Cliente confirma visita yubicacin del equipo

Physical EvidenceReporte deprogramacin de MCS

Confirmar fecha de visita

y ubicacin del equipocon cliente y/o clientes

Customer DefinedStandards

Desviacin entre el da y lahora que se ofreci elservicio vs. el momento quefue realizado

Mecnicos bienuniformados, camionesbien equipados

IIASA ServiceBlueprint

Das que el cliente recibe elD i i t l h


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Supervisor

despacha

mecnico

Se elabora gua de

salida, se habilita

orden de trabajo

Se llena hoja

de campo, walk

around

Mecnico realiza

mantenimiento,inspecciones y toma

muestras de aceite

Cliente recibe y

firma hoja de campo

Recibe hoja de

campo walk around

CTS y evala

novedades

Se entregan muestras

de aceite y solicitud de

SOS, se entrega

soporte de gastos de

viaje

Se elabora

presupuesto de ser

necesario

Se elabora listado de

repuestos

Se cotizan repuestos

Se cotiza mano de obra

Se entrega reporte

para ser llevado alcliente

cliente recibe

informe

Reporte incluye:SOS, CTS, Walk aroundPresupuesto, Factura

Hoja de campo (hoja devisita)

Se recibe informe

de SOS

Se elabora informe

Se ingresa datos de

hoja de campo :tiempos,

gastos, SOS. Se carga

aceites. despus de

revisada se factura

Se revisa carpeta

para facturar y se

cuadra con contrato

Das que el cliente recibe elinforme despus de haber sidorealizado el mantenimiento

Desviacin entre las horasque se hizo el servicio y lashoras que se debi haberecho


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Case 8-33

CSA Portfolio for CAT Customers

Option 1 Option 2 Option 3

CATCustomers

Who are:IndependentValue-minded

Who are:EfficientFlexible

Who are:Focus

Strategic

Point ofDifference

EmpowermentThe right parts & skillsTo manage your own

Service needs

PartnershipShared responsibilitiesThat maximizes bothCATs and CustomersService capabilities

TranquilityAll technical and

serviceRequirements areManaged by CAT

ReasonWhy

CSA Provides:CAT PartsCAT Info

CAT Training

CSA Provides:CAT PartsCAT Info

CAT TrainingTechnical ServicePersonnel Support

CSA Provides:EVERYTHING

CAT PartsCAT Info

Technical ServicePersonnel Support


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Case 8-34

CUSTOMER

COMPANY Service Delivery

Gap 3: The Performance Gap

Customer-Driven

Service Designs andStandards

Provider Gap 3


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Case 8-35



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Case 8-36

CUSTOMER

COMPANYExternal

Communicationsto Customers

Gap 4: The CommunicationGap

Provider Gap 4

Service Delivery


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Case 8-37



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Case 8-38

Gaps Model of Service Quality

Documents

Caterpillar