REPAIR OPTIONS NEWS EDITION 1 | 2017

CELEBRATING REPAIR
IN THIS ISSUE
Celebrating Repair Options Successes
- Repair Options Dealer Support
Reman: Supporting Customers & Dealers
- Sample Reman Framework
Dealer Reman Success Around the World
- India: Driving Customer Loyalty
- Australia: Expedited Parts Drive
Customer Loyalty
Warren Cat Poised for
Repair Options Success
Repair Options Marketing Materials
- Reman SME Video
- WeChat Reman Awareness Campaign
- CSA and EMServices Flyer
Dealer Repair Options Engagement Status
OPTIONS SUCCESSES
Throughout 2016, Global Aftermarket Solutions Division (GASD)
team members partnered with Distribution Service Divisions (DSDs)
to assist nearly 80 Cat® dealers in enhancing their repair options
offerings. Those offerings are designed to support three key
customer requirements: A broad range of options,
expert advice and repair, and timely quote and repair.
Dealers worldwide have deployed repair options programs
targeting highest opportunity machines and
components with wear and maintenance solutions,
common repair solutions and critical repair solutions.
We appreciate all who are making this evolution possible.
But that’s just the beginning. In 2017, we have set an aggressive goal: By the end of the year, 100% of dealers
will have full-range repair options programs that target 30% of their lost opportunity. In addition, each dealer
will have won 10% of that targeted lost opportunity.
Capturing that lost opportunity means winning more business from customers who currently work with
our dealers—and reaching out to others who currently do not. To support that work, we have developed
wide-ranging marketing and sales materials dealers can use with customers, either as provided or by
personalizing them for their dealership.

Winning more business requires filling gaps in the repair options spectrum for high-opportunity machines and components with market-competitive
fixed price options—and better leveraging those already available. That includes critical cost-saving repair options, like Cat Certified Rebuilds
(see Repair Options News, Edition 6) and Cat Reman offerings, which complement dealer service in many ways. In this issue we look at
the benefits of Reman and how Reman options are helping to drive Cat dealer success worldwide.

Thank you for your contribution to this past year’s repair options progress. We look forward to continuing to build success together in 2017!

NICKI LANE
GASD Parts & Service Marketing Supervisor
Reman, Wear & Maintenance

Repair Options Dealer Support

Throughout 2016, the Cat Parts and Repair Options Marketing Team has been partnering
with dealers around the globe to deploy repair options programs for their high-opportunity
models and components. To support dealers in selling repair options, the team has created
general bills of material (GBOMs) for repair solutions that cover 89 machines and engines—
models that represent the highest opportunity for selling repair options to customers.

To support dealers in marketing repair options, the team has created an extensive suite
of marketing and sales materials for use with customers at dealer.cat.com/repairoptions
(scroll to Marketing Materials). Those materials include overview videos, major model
and component brochures, component presentations, subject matter expert (SME) videos,
and spec sheets with ghost images. Watch for more repair options dealer support materials
to come in 2017!
REPAIR OPTIONS NEWS EDITION 1 | 2017

REMAN: SUPPORTING 5
10
CUSTOMERS & DEALERS 4 11 9
Occasionally, concerns surface that Cat Reman competes with PRODUCT REMAN
dealer service. But rest assured that is definitely not the intention LIFE CYCLE LIFE CYCLE
of this program. Cat Reman’s role in our aftermarket solution strategy 3 8
is to provide customers with repair options that help achieve 1 6
the lowest total operating cost and maximum uptime through 2 7
off-the-shelf availability.
PRODUCT LIFE CYCLE REMAN LIFE CYCLE
Of all Cat Reman engine parts sales, complete engines comprise
about 15% of the total, with the remaining majority used in dealer rebuilds 1 PRODUCT BEGINS LIFE CYCLE 6 CORE RETURNED TO CAT
or sold over the counter by dealers. Where Cat Reman parts are an option, 2 PERFORMS 7 CLEANED
3 REGULARLY MAINTAINED 8 SALVAGED
they are used 70% of the time versus new parts—and more than 90%
4 MATURES 9 REMANUFACTURED
of the time in regions where Cat Reman has been established longer. 5 REPLACED BEFORE FAILURE 10 TESTED
11 RE-ENTERS SUPPLY CHAIN
Cat Reman components and assemblies support both dealers and
customers across the repair options spectrum in important ways
(also see “Dealer Reman Success Around the World”):

CUSTOMER BENEFITS DEALER BENEFITS

• DELIVER SAME-AS-NEW PART PERFORMANCE, RELIABILITY
AND WARRANTY. Cat engines and components are built to be
remanufactured for a second life.
• ENHANCE AFFORDABILITY. At 45% to 75% of the cost of new
Cat parts, Reman parts contribute to achieving lowest total
owning and operating costs.
• INCREASE OVER-THE-COUNTER AVAILABILITY. That means
more options at repair and overhaul time, reducing downtime.
• INCREASE PROFITABILITY ON FIXED PRICE REPAIRS. Fixed pricing is a
key element of dealer repair options deployments. Using Reman components
and assemblies can help support market-competitive fixed pricing,
while retaining an acceptable profit for dealers.
• MAXIMIZE DEALER REBUILD AND EXCHANGE PROGRAMS. Dealers who
have Component Rebuild Centers or a robust component exchange business
leverage Cat Reman parts to manage their exchange and rebuild costs
and provide a competitive price to their customers. Using Cat Reman parts
and assemblies strategically in repairs and rebuilds also can free up highly
specialized technicians for the most important work.

• IMPROVE MACHINE AVAILABILITY AND UPTIME. Reman supplements dealer

exchange programs to peak shave increased demand and also helps dealers
support machines and engines with lower populations.

Sample Reman Framework

Reman components and assemblies provide alternatives across the repair options spectrum.

NEW & REMAN COMPONENTS NEW & REMAN COMPONENTS, NEW & REMAN ASSEMBLIES

REBEARING/RESEAL DEALER REBUILD/ REMAN NEW

REBEARING/RESEAL PLUS COMPONENT EXCHANGE ASSEMBLIES ASSEMBLIES

OWNERSHIP < 2 years > 2 years

UTILIZATION < 1000 hours > 1000 hours

AFFORDABILITY < 50% of New > 50% of New

TURNAROUND Flexible Urgent

REPAIR OPTIONS NEWS EDITION 1 | 2017

DEALER REMAN SUCCESS AROUND THE WORLD

Caterpillar Reman consultants throughout the world are available to help dealers with specific data,
information and advice on how to lower customers’ total cost of ownership, and increase dealer profitability
on fixed price repairs. Recent Reman successes shared by Reman consultants include:

India: Reman Education Wins Customer Trust

Gmmco, a Cat dealer headquartered in Chennai, India, experienced Reman “Gmmco...experienced

success through education and patience. An electric power customer with a
Customer Service Agreement (CSA) experienced a generator set breakdown Reman success through
because of fuel contamination. Gmmo submitted a quote for the 12 fuel injectors
needed to restore the generator set to working condition, quoting both new Cat
education and patience.”
and Cat Reman injector assemblies.

Due to budget constraints, the customer requested Gmmco instead repair the
failed injectors. When the dealer explained the injectors could not be repaired,
the customer approached another local service provider who provided a “repair”
quote. Against Gmmco’s recommendation, the customer hired the local service
provider. When the “repaired” injectors were installed, the engine would not start.

Throughout this process, Gmmco remained in touch with the customer and
ultimately secured a meeting with the customer’s general manager. During that
meeting, Gmmco made a presentation on Cat Reman, including a video to help
explain its benefits. Following the presentation, the customer ordered 12 Reman
injector assemblies, which were installed to get the generator set running.

Because of sustained contact, never blaming the customer and using supplied
materials to help educate the customer, Gmmco won the business, as well as the
customer’s trust for the future.

Australia: Reman Engine Leads to New Machine Sale

When Hastings Deering customer Holcim Australia needed to get a 962H wheel “...the dealer met an immediate
loader up and running very quickly, the best, most cost-effective option for both
the customer and the dealer was a complete Cat Reman engine. The dealer customer need and drove
collaborated with their Caterpillar Reman marketing consultant to expedite
shipping on the Reman engine to meet the customer’s aggressive time frame.
long-term customer loyalty.”
Holcim Australia was so impressed by the support provided by the dealer and
Caterpillar, when ready to buy a new wheel loader, the customer opted to purchase
a Cat 990K from Hastings Deering over a Komatsu WA-700—even at a $125,000
premium. By leveraging this Cat Reman engine option, the dealer met an immediate
customer need and drove long-term customer loyalty.
REPAIR OPTIONS NEWS EDITION 1 | 2017

WARREN CAT POISED FOR REPAIR OPTIONS SUCCESS

Warren Cat, with locations throughout Texas and Oklahoma, started on their repair options journey in May 2016.
Based on their dealer assessment and opportunity analysis, the deployment team selected the D6R/T and 140H
machine models as key growth targets. Using the full repair options implementation process and framework,
Warren was able to bring their initial repair options program to market in six months.

The team diligently collected voice of customer to shape their repair options solutions, collecting insights such
as, “I want to catch my failures before they happen,” and “I want someone to work with me to identify my
specific repair needs, then help me understand what options are available to meet them.” Always keeping their
customers’ needs in mind, Warren created end-to-end internal processes, linking the operations and sales teams
to set a solid foundation for repair options success.

Warren created a holistic approach for reaching out to target customers and trained its sales and support
personnel how to help customers select the best repair option for their unique situation. Customized spec sheets
and brochures now support both digital and face-to-face customer experiences. To further support their digital
strategy, Warren added a repair options website landing page and is generating awareness and leads through
eblasts touting incentives. A systematic plan for following up with each identified target customer closes the loop
on potential sales.

Using an established sales tracking process, Warren is poised to measure success and replicate to other models.
For more on Warren Cat’s repair options journey, listen to the December 2016 Americas Repair Options Webinar
accessible at dealer.cat.com/repairoptions under “Training” at the right of the page.
REPAIR OPTIONS NEWS EDITION 1 | 2017

REPAIR OPTIONS
MARKETING MATERIALS

Reman SME Video

A new SME video and companion PowerPoint are available at
dealer.cat.com/repairoptions to support dealer conversations with
customers about repair options. Click on Marketing Materials,
then the Component Specific tab, then the Reman link.

Reman Repair Options features Caterpillar marketing consultant

Mark Gasper on the critical role remanufacturing plays in saving
customers time and money by returning engines and components
to their original performance specifications—at far less than the
price of new. A new Reman brochure also is available at
dealer.cat.com/repairoptions.

WeChat Reman Awareness Campaign

Beginning in the second half of 2016, the China Reman marketing team
initiated a Reman awareness campaign on WeChat, China’s most popular
social media platform. Regular scheduled posts were broadcast from the
Caterpillar WeChat account.

Each bite-sized post covered a key Reman benefit to help customers

understand how they can better maximize their assets’ productivity,
while realizing important savings. The campaign was well-received by
dealers and customers, garnering more than 8,000 page views in six weeks.

Dealers have extended the reach of the posts by sharing them with their
WeChat followers. The Reman awareness campaign will continue into 2017.

CSA and EMServices Flyer

A new customer-facing flyer is available here for use by
Caterpillar and dealer representatives to encourage current
CSA and EMServices customers to renew their contracts.
The flyer promotes the benefits of planned maintenance,
S•O•SSM Services, inspections, repair management, condition
monitoring and equipment management, including a sample cost
comparison and customer testimonials.
 REPAIR OPTIONS NEWS EDITION 1 | 2017

DEALER REPAIR OPTIONS ENGAGEMENT STATUS

Below is the dealer deployment status report as of December 2016. Great job to all the dealers who
have deployed repair options in their regions!

0 PON 3 ZEPPELIN RUSSIA G&R BORUSAN (KAZAK)

1 VT (RUSSIA)

3 MANTRAC VOSTOK
G&R FINNING UK
G&R WYOMING 0 BUTLER G&R TOROMONT
I I
G&R WESTRAC CHINA

4 WESTERN STATES 4 ZIEGLER 4 HEWITT 0 BM POLAND

G&R NC MACHINERY G&R HGI 6 MACALLISTER 2 MILTON
3 BORUSAN
G&R WAGNER G&R MICHIGAN G&R CLEVELAND G&R ECI METRO
G&R FSA
1 PETERSON 4 PATTEN 4 RANSOME
0 NCD
G&R HOLT CA 3 ALTORFER 3 ALBAN
4 QUINN 5 NEBRASKA G&R CARTER 4 LSH
G&R ZEPPELIN
1 WHEELER 6 FABICK 6 WALKER 6 GMMCO 0 TIPL
6 CAROLINA 5 BM 4 CEL
0 JOHNSON 4 FOLEY EQ.

1 HAWTHORNE 4 STOWERS
0 BANGLA CAT
6 WHAYNE
G&R CASHMAN
2 UTE 3 MONARK
1 RING POWER
G&R EMPIRE G&R SDI
G&R MADISA 2 MSP
G&R WARREN
6 IIASA PANAMA
G&R HOLT 0 PHU THAI
5 AL-BAHAR
1 THOMPSON TRACTOR 0 GECOLSA 1 TSL
6 DELMAS 6 METRO-THAILAND
6 IIASA 1 ZAHID

3 TRAKINDO
5 FERREYROS
G&R HASTINGS DEERING
4 MANTRAC

4 WESTRAC WA

6 BARLOWORLD
4 FINNING CHILE
3 WESTRAC NSW
0 FINNING ARGENTINA

KEY
0-6 = PHASE COMPLETED AS OF DECEMBER 2016

PHASES

0 1 2 3 4 5 6 G&R

PRE-LAUNCH DEFINE CUSTOMER VOC & CREATE STANDARD DEVELOP GHOST FINALIZE MARKETING TRAIN SALES GOVERNANCE
OPPORTUNITY COMPETITIVE DATA JOBS & FIXED IMAGES, SPEC SHEETS MATERIALS & DEALER TEAM & SCHEDULE & REPLICATION
& TARGET ANALYSIS PRICE POINTS & BROCHURES SALES CAMPAIGNS CUSTOMER CALLS
CUSTOMER LIST

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