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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.
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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
Key Factors Leading to Provider Gap 2
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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
Key Factors Leading to Provider Gap 3
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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
Key Factors Leading to Provider Gap 4
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Case 8-38
Gaps Model of Service Quality