CATERPILLAR

Emerging Platforms and Services Disruption

YASH SRIVASTAVA
GJ22CMM029
Contents

What Caterpillar did in the Past? ....................................................................................................... 2

Journey from 1906 to 2022: ................................................................................................................ 2
Investments: ........................................................................................................................................ 6
Brands & Acquisitions: ....................................................................................................................... 7
What Caterpillar is doing in the present? .......................................................................................... 8
Technical Centre ................................................................................................................................. 8
Technology Strategy............................................................................................................................ 8
CAT Connect ....................................................................................................................................... 8
Fleet Management .............................................................................................................................. 8
Caterpillar’s current Diversity and Inclusion Framework ................................................................. 9
What the future holds for Caterpillar? ............................................................................................... 9
References ............................................................................................................................................ 11
 From a Caterpillar to a Butterfly

What Caterpillar did in the Past?

Journey from 1906 to 2022:

The journey started back in 1906 when Benjamin Holt tested first gasoline powered tractor
which replaced the old steam powered tractor. This innovation was known as Caterpillar and
from then, there has been no stopping in terms of digital transformation. Being the largest
construction equipment organization in the world, Caterpillar adapted and knew how to make
use of the digital technology in order to move forward.

It was in 1930s when Caterpillar came up with seventy track-type tractor which burnt butane
and natural gas to and modernize their machinery. In 1931, they released the first motor grader
to the industry knows as Auto Patrol and in the same year came up with Caterpillar’s first
mass-produced diesel engine called D9900.
Caterpillar was already going through a digital transformation and its vision of adopting lean
manufacturing was slowly taking place. In 1955, the company introduced Low ground
pressure (LGP) undercarriage. This was done in order to make Caterpillar machines work
even in remote and harsh weather conditions like Antarctica.

One of the biggest innovations by the company was of the elevated sprocket in 1977. Because
of this technological wonder, CAT machines were able to increase their efficiency, provide an
excellent operator experience, and last longer. This can be seen in CAT tractors today as well.
Cat differential steering system in 1980s allowed its machines to operate in a more smooth
and fast manner. It helped enhance the operator’s productivity and saved time to a great extent.
Normal tractors can spend up to 50% of their working time turning, this feature helped
machines to turn very quickly.
With time, Cat also started looking for green and sustainable solutions. Firstly in 2001, they
came up with the ACERT technology which greatly reduced the wasteful emissions and toxic
pollutants from the machines while maintaining the performance and durability. Furthermore,
in 2009, they came with Cat D7E which was an electric drive technology promising more
efficiency and less fuel usage. Due to this innovation, customers saved around 12.2 million
litres of diesel fuel as compared to the previous model.

It was finally in 2013 when Caterpillar seriously started looking into digital transformation.
The company’s business was taking a dip while other companies in the industry were looking
to adopt digital solutions. Cat saw a huge scope in the Internet of Things to drive growth. The
aim was to somehow connect all their machinery through a common platform or digital
architecture. With the help of cloud and other applications, they wanted to create a smart
ecosystem for their customers.

The company wanted to connect all their machines to cloud and hence get insights from the
data. They planned on increasing efficiency by making use of large amount of data collected
by customers, dealers, and Caterpillar. By 2016, Cat was able to connect 400,000 assets of their
machinery and by 2018, the mark reached to 700,000. All this equipment were connected to
company’s cloud server and had cloud-enabled sensors which provided customers with all
types of data like health or durability or productivity of each machinery, from forklift to
bulldozer to tractors to trucks. With the help of a common application, fleet management was
made simple.
We cannot even imagine how Caterpillar was able to revolutionize their industry with the help
of Internet of Things. The thing which changed the game was predictive maintenance, Digital
sensors like smart oil cap or smart signalling gave real time insights to the owners. For example,
the operators getting alerts if more fluid or oil is needed, which a particular equipment needs
repairing or replacement. In this way, customers were able to make best out of their investment,
technicians could solve the problems or guide remotely, and help Caterpillar to streamline its
revenues due to increased sales of parts, repairs, and replacements along with the selling of
main machinery. Caterpillar was able to predict the supply and demand which is one of the
major challenges in the businesses today.

Investments:

Throughout time, Caterpillar has invested in small digital players, and changed its organization
structure to achieve digital innovation. In march 2015, Cat invested in a firm called Uptake
which deals into data analytics. This helped them to get the best analytics in the market. Post
this in April 2015, they launched their own Analytics & Innovation division to embed an
analytics mindset throughout the company.

In May 2015, they invested in a company called YardClub. This firm helped owners rent out
inactive machines to different contractors. This was an attempt from Caterpillar to enter into
the shared economy division just like Uber. Caterpillar has made around 36 investments in
total, majorly being in Construction, manufacturing, and automation sectors.

Caterpillar established its fleet monitoring office in Peoria, Illinois to keep a check and track
all the 400,000+ connected machinery deployed on the field. Energy, Digital, Robotics, and
construction have been the major areas of investments.
Brands & Acquisitions:

1950 – CAT brand

1965 – CAT lift trucks

1973 – CAT Reman

1981 – CAT Financial and Solar Turbines

1984 – Hindustan Motors Ltd.

1992 – Olympian

1993 – Anchor

1996 – FG Wilson, MAK, and Turner Powertrain System

1997 – Asiatrak

1998 – CAT Rental Store and Perkins

2005 – SEM

2006 – Progress Rail

2011 – MWM

2016 – M2M

2021 – SPM

Caterpillar acquired around 15 companies in different areas like trucks, manufacturing, finance,
solar energy, fuel, generators, propulsion, hydraulics, rentals, rail, sustainable engines, and Oil
& Gas.
What Caterpillar is doing in the present?

Technical Centre
Caterpillar spends about $2 billion yearly only in Research & Development which shows how
much they are committed towards latest innovations and developments happening in the world.
The company is developing new solutions and simulating and testing their products through
their virtual 3D reality centre. With the help of 3D glasses and tools, the technicians are able
to identify the problems related to construction, assembly, service or visibility easily.

Technology Strategy
Because of efficient predictive maintenance, they can predict the trends and what customers
will need in the future. Example, Caterpillar is currently focussing on EPA Tier 4 standards so
as to lower the emissions, create more powerful engines, and contributing to the environment.
Also, the remote culture of working and controlling operations remotely is in the trend, the
company is also focussing on autonomous vehicles.

CAT Connect
Through CAT Connect, the customers or owners get all the data and insights of their
technology-equipped machines. With the help of this, they can track the progress, repairs,
maintenance, manage, and improve productivity of the machinery.

Fleet Management
Best in the industry theft deterrent system, remote monitoring, and road analysis helps
Caterpillar to have full control of their machines. With the efficient fleet control, the company
satisfies customer’s needs on the go and set themselves apart in the field.
Caterpillar have five fundamental steps which they follow to achieve digital transformation:

• Step 1 – Drive it from the top

• Step 2 – Defining the digital vision
• Step 3 – Developing a digital strategy
• Step 4 – Creating a digital roadmap
• Step 5 – Building a digital organizing structure.

Caterpillar’s current Diversity and Inclusion Framework

What the future holds for Caterpillar?

Caterpillar plans to enhance data analytics capabilities across all its machines so that more and
more of their equipment can get connected with their cloud server which will improve
efficiency and boost productivity. The company still needs to make bold moves in order to
become a dominant digital force in the industry. As the technological developments are on the
rise, Caterpillar is planning to be updated and focus more on Internet of Things. In order to
boost data analytics, they should hire more of good analytics talent and maybe consider to
relocate their Analytics & Innovation division from Peoria to some big town to acquire hidden
talents.

Caterpillar will not focus purely on machine functionality but also on its orientation and design
which holds a very important position to gain customers. With seamless software & hardware
integration, all the updates, notifications, and feedbacks will be pushed through the cloud server
to the customers and help the company take data-driven decisions.

Post Covid-19 pandemic, we all know that digital innovation is more important today than it
ever was and Caterpillar is well positioned to manage their customers and innovate according
to the customer’s needs. The company promises that even more customers will engage through
their digital tools and e-commerce services. With the help of Artificial Intelligence, Caterpillar
will focus on ensuring how to have the right part at the right place just when the customer needs
it, the repair & maintenance, servicing, and acing the supply & demand, that too in a cost-
effective manner.
References

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