Caterpillar Case: Process improvement with Lean

Caterpillar is one of the world's largest manufacturers of construction machinery and mining equipment, diesel engines, and industrial gas turbines. As it could not be otherwise, it is currently betting on the improvement of processes with the incorporation of Lean methodologies.

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Pioneer in the invention of plow tractors at the beginning of the 20th century, Caterpillar owes its name precisely to the slow movement of the tractor like a caterpillar, a metaphor that Benjamin Holt incorporated to designate the name of the company dedicated to the construction and mining industry.

In this new case study, we intend to investigate the Caterpillar case, the most important machinery manufacturer in the world, and how its product development premise does not stagnate over time, venturing into continuous improvement to make more efficient the work of construction companies and industries.

What are the Caterpillar processes?

Caterpillar includes elements of the Kaizen and Kanban methods. Taking this orientation into account, the company is based on 3 types of processes:

• Central: it comprises the most relevant manufacturing operational processes that include all activities, from demand planning to the delivery of finished products.
• Control: these processes are linked to the management of activities related to measurement, monitoring, quality, and the advantages that the Six Sigma methodology manifests.
• Process facilitation: they are related to the management of information, culture, people, and the transformations of the value chain.

Caterpillar: Process improvement with Lean methodology

The Lean Six Sigma methodology at Caterpillar began its journey in 2001. Since then, it has made considerable progress in shaping an organizational culture where the different work teams support decision-making, based on the results generated.

The Six Sigma methodological approach specializes in error elimination, information gathering, data analysis, and fact-based decision-making to achieve greater efficiency and process stability.

In Victoria, Texas, thousands of large hydraulic excavators roll out of Caterpillar manufacturing facilities each year; consequently, working toward greater operational excellence has translated into significant cost and productivity improvements for this core product facility.

As the facility began to generate record production volumes, it became clear that process efficiencies needed to be improved to enable a faster flow of parts with less excess inventory and less storage space.

Lean manufacturing improvements are not limited to Texas facilities. Company-wide, Caterpillar is embedding Lean principles to accelerate a culture where everyone in the company and the extended value chain is aligned to stop defects, improve processes and eliminate waste in the pursuit of operational excellence.

In addition, the company is taking Lean beyond the factory floor by developing the problem-solving skills of all employees and deploying Lean experts to advise teams throughout the organization.

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Add value to customers

The Lean efforts of Texas facilities don't stop there. Dozens of projects were completed in the last 3 years. The constant dialogue and discussions around Lean have caused a change in mindset and work culture, which is essential for initiatives to be sustained.

While Lean often focuses on improving efficiency, it is really about delivering value to customers. Lean adds value to Caterpillar by delivering efficient machines to its customers, on time and without defects, providing them with the right solutions to make the world a better place. Exceeding customer expectations is why the company focuses on continuous improvement.

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In final words, the Caterpillar case shows us the importance of process improvement in industries to ensure greater efficiency in operational work through machines. By implementing Six Sigma, Caterpillar minimizes waste, reduces the number of errors, and analyzes data more accurately to provide an optimized experience for customers, because one way or another, they are the ones who make companies grow with the purchase of products or services.