APPLICATION OF SIX SIGMA

BY CATERPILLAR INC.

Done by:

Jitesh Kumar Tiwari

Jaison George Jose
Justin joy.
ABOUT CATERPILLAR INC.

 Caterpillar Inc., also referred to as CAT is an American fortune 100

corporation which designs, develops, engineers, manufactures,
markets, and sells machinery, engines, financial products and
insurance to customers via a worldwide dealer network.
 They are the world’s largest construction equipment manufacturer.
 In 2018, caterpillar Inc. was ranked 65th on fortune 500 list and 238th
on global fortune 500 list.
 The company also licences and markets a line of clothing and
workwear boots under its CAT/ caterpillar name.
 As of 2018, no. of employees working for caterpillar Inc. were about
101,500.
COMPANY’S HISTORY

 Caterpillar Inc. trades its origins to the 1925 merger of the holt
manufacturing company and C.L best tractor company, creating a new
business entity, the California – based caterpillar tractor company.
 The company’s first operations began around 1910 in east Peoria,
Illinois, after the purchase of an empty factory plant which belonged to
a bankrupt colean manufacturing co.
 Benjamin holt, alongside his nephew pliny holt opened the plant and
immediately began operations with 12 employees.
 Despite the hefty capital incurred, the company employed 625 people
and started exporting tractors to Argentina, Canada, and Mexico; all by
the end of two years.
ACTIVITIES IN RECENT YEARS.
 Caterpillar’s stock more than doubled in value over the last couple of years
thanks to a combination of improved margins, upbeat global sentiment
and strong revenue growth.
 Caterpillar reported $54.7 billion in Total Revenues in Fiscal 2018. This
included 4 revenue streams: construction industries(42% in total revenue),
resource industries (18% in total revenue), energy and transportation (35%
of total revenue), and financial products (5% of total revenue).
 Among the 4 revenue streams, resource industries is the fastest growing
segment with revenues increasing from $5.7 billion in 2016 to almost $10
billion in FY 2018 mainly due to higher equipment demand, favourable
price utilization and increased services.
CATERPILLAR’S APPLICATION OF SIX
SIGMA.
 In 2001, caterpillar launched its 6 sigma program to drive change to
achieve the company’s long terms strategic goals (caterpillar uses 6 sigma
to identify its six sigma initiatives). This 6 sigma process was, and continues
to be, extremely successful.
 Caterpillar CEO glen Barton started the 6 sigma culture change in 2001
when he challenged the company’s unstrained culture for their personal
commitment to the company.
 In addition to its own use of 6 sigma, the company has taught its suppliers
and dealers about the benefits of using the technique to refine the entire
sales model.
 Caterpillar has introduced 850 suppliers worldwide to 6 sigma, which has
created more than 1000 supplier black belts to help run various projects
across the world.
ACHIEVEMENTS THROUGH
IMPLEMENTATION OF SIX SIGMA.

 When glen Barton introduced 6 sigma to caterpillar, he envisioned

using it to help the company achieve the $30 billion mark in revenue by
2006. but they achieved this goal two years ahead of their plan; in 2004.
 The company has had a great financial success as well. In 2006,
caterpillar recognized $41.5 billion in total sales and revenues, easily
exceeding its 2001 goal, which led to $ 3.5 billion in added profit.
 With the help of 6 sigma, caterpillar recognized that its greatest asset
was its people; its human resource and that it would have to completely
replace the knowledge base that would leave the company.
 With its cost saving initiative introduced in 2015, caterpillar has saved
more than a billion in operating expenses.
 6 Sigma is foundational to CPS (caterpillar production system) and
improving order-to-delivery processes—everything from the time a
customer places an order until he or she receives the finished product.
 Since 6 sigma’s introduction at caterpillar, it has more than a 2000
certified black belts who have 100% success rate.
 6 sigma has also helped caterpillar to reduce global green house gas
emissions. It pledged to reduce 3% from 2006 to 2015 but ended up
achieving this objective by 2012.
 Dealers in connection with caterpillar Inc. also took commitment to 6
sigma. As a result, more than 165 dealerships produced more than 1000
additional black belts to help with their projects.
CONCLUSION

 As a tool for achieving organisational goals, 6 sigma is really affective in

terms of employee management career advancement, job diversity and
many other aspects.
 Six sigma is an efficient, affective, and an idealistic tool for every
organisation that want to stay a step ahead of their competition and
improve on customer and dealer satisfaction.
 More than 35 companies have successfully implemented 6 sigma in
some form or another. As a result, they were able to ultimately sustain
the competition with minimal failure margins; caterpillar Inc. being one
of them.