Repair Options Guide 2 2019

CAT REPAIR OPTIONS
GUIDEBOOK FOR DEALERS

Internal Only
A Comprehensive Resource for Developing, Selling, Version 2.0: February 2019

Executing and Sustaining a Repair Options Program
TABLE OF CONTENTS
BEFORE YOU BEGIN..................................................................................................... 3 STEP 4: BUILD REPAIR OPTIONS OFFERING....................................................................... 61

Learn How to Use This Guidebook............................................................................................... 3 4.1 Create Repair Options.......................................................................................................................... 63
Take the Assessment First............................................................................................................. 4 4.2 Build Standard Jobs to Support the Repair Options....................................................................... 64
Understand the Purpose of This Guidebook............................................................................... 5
4.3 Adjust Inventory Levels........................................................................................................................ 66
4.4 Develop a Sales Aid for the Customer............................................................................................... 67
INTRODUCTION................................................................................................................ 8
Advantages of a Robust Repair Options Program..................................................................... 8
Supporting You Every Step of the Way...................................................................................... 10
STEP 5: BUILD DEALER CAPABILITY....................................................................................... 69
5.1 Prepare Operations Staff..................................................................................................................... 72
Responding to Customer Needs................................................................................................. 11
Dealer Success Filling the Gap................................................................................................... 12 5.2 Prepare Customer-Facing Staff.......................................................................................................... 75
5.3 Prepare Support Staff........................................................................................................................... 77
THE CAT® PARTS & REPAIR OPTIONS FRAMEWORK............ 13 5.4 Track Major Components..................................................................................................................... 78
Describe the Framework to Customer-Facing Personnel in Broad Terms......................... 14 5.5 Link Repair Quotes to Work Orders.................................................................................................... 79
Describe the Framework to Customer-Facing Personnel in More Detail........................... 15 5.6 Update Repair Options Offerings........................................................................................................ 80
Explain the Framework from a Real-World Perspective........................................................ 23 5.7 Execute Reuse and Salvage Guidelines Consistently.................................................................... 81
Explain How the Framework Applies to Wet Parts................................................................. 24
Explain How the Framework Applies to Maintenance/Wear Parts..................................... 25 STEP 6: SELL REPAIR OPTIONS.................................................................................................. 83
6.1 Target Customers.................................................................................................................................. 86
STEP 1: GAIN LEADERSHIP SUPPORT...................................................................... 26 6.2 Promote Repair Options Offering........................................................................................................ 87
1.1 Secure Leadership Buy-in and Support.............................................................................. 28 6.3 Guide Customer to Select a Repair.................................................................................................... 93
1.2 Define, Document and Communicate Your Plan................................................................ 32
1.3 Align a Dedicated, Focused Team........................................................................................ 34 STEP 7: EXECUTE............................................................................................................................... 94
1.4 Define Roles and Responsibilities........................................................................................ 35 7.1 Ensure Understanding of What Was Sold to the Customer.......................................................... 96
1.5 Manage Risk............................................................................................................................. 37 7.2 Schedule the Work................................................................................................................................ 97
1.6 Incentivize Personnel............................................................................................................. 38 7.3 Open Work Order................................................................................................................................... 98
7.4 Order Parts............................................................................................................................................. 99
STEP 2: CONDUCT MARKET ANALYSIS................................................................... 40 7.5 Complete the Repair............................................................................................................................ 100
2.1 Validate Population and Customer Data............................................................................. 42
2.2 Identify Customer Needs....................................................................................................... 44 STEP 8: MEASURE AND MAINTAIN....................................................................................... 101
2.3 Identify Market Position......................................................................................................... 45 8.1 Track Customer-Facing Key Performance Indicators (KPIs)...................................................... 104
2.4 Choose Target Models............................................................................................................ 49 8.2 Track Operational KPIs....................................................................................................................... 105
8.3 Report Repair Options KPIs............................................................................................................... 106
STEP 3: DESIGN REPAIR OPTIONS OFFERING...................................................... 51 8.4 Alter the Process to Improve KPIs................................................................................................... 107
3.1 Identify Which Components to Deliver................................................................................ 53
3.2 Identify Desired Price Points................................................................................................. 54
3.3 Adjust Based on Non-Price Factors.................................................................................... 55
GLOSSARY........................................................................................................................................ 109
3.4 Forecast Demand.................................................................................................................... 56
3.5 Concentrate on Lowering Customers’ Costs...................................................................... 59
Quick Finder | Glossary | Resources Repair Options Guidebook n Page 2

Before You Begin Learn How to Use This Guidebook
To begin, simply go to the Quick Finder page for an Navigating Through the Pages
outline of the sections of the Guidebook, and click
This Guidebook is created as a PDF file with clickable links to allow for easier navigation.
on the section that you want to read. When viewing
the Guidebook, you always can return to the Quick
Finder by clicking the link at the bottom left corner Contact Caterpillar for Additional Assistance
of any page. Caterpillar is prepared to help you understand and
apply what you have learned from your Repair Options
Effectiveness Assessment report.
While this Guidebook is designed to be a valuable

reference, you may find you want or need some
personalized, interactive support as well. For direct
assistance, please contact Robert Ziemba via email at
ziemba_robert_e@cat.com or call him at 309-636-5140.
Robert can work with you to help you navigate a wide
array of topics.
All of the topics in this Guidebook are numbered to This Guidebook has been designed for digital viewing.
correspond with the numbered topics in the Repair However, it can be printed and bound as needed.
Options Effectiveness Assessment Tool. For example, Print the pages you need individually or print the
if the Assessment Tool suggests that you should whole document and bind it along the edge using a
read more about topic STEP 1.1: Secure Leadership large wire or plastic binding.
Buy-In and Support,” then simply reference topic 1.1
in this Guidebook.
Glossary terms are underlined. When you click

an underlined term, you will be directed to the A list of additional resources to support your
Glossary page with the corresponding definition. repair options success is available in the back
of the Guidebook.

Before You Begin Take the Assessment First
Please use the Repair Options Effectiveness Assessment

A Closer Look EXECUTE
Tool to generate an assessment report before referring
to this Guidebook. The Assessment Tool allows you to
evaluate your current repair options parts and service More Details About the Assessment Tool
capabilities, and then forecast what you can gain by
Caterpillar developed the Repair Options Effectiveness
implementing a robust repair options program. This key
Assessment Tool as a helpful, timesaving resource for
finding will give you the basis you need to begin building a
dealers wanting to create a repair options program.
more successful program. Or, if your dealership already
has a successful program in place, you will discover how How It Works
you can enhance it.
The Assessment Tool poses a variety of questions
If the Assessment Tool identifies any weaknesses covering many important topics, including leadership
(deficiencies) in your current repair service capabilities, support within your dealership, the market you serve,
you can refer to this Guidebook to learn how to overcome preparedness for developing and executing a repair
those weaknesses. options program and methods for measuring success.
To take the Repair Options Effectiveness Assessment, Each question is followed by three multiple-choice
please contact Robert Ziemba via email at ziemba_ answers. Simply select the answer that best applies
robert_e@cat.com or call him at 309-636-5140. He will help to your dealership’s current situation.
you gain access to the Global Assessment Application site
which holds this and similar dealer assessments. After you enter your answers to all of the questions,
the Assessment Tool will produce a report of
assessment results and recommendations that you
can review and save for future reference. More
specifically, the report will indicate if your dealership
is at the BASIC, INTERMEDIATE or ADVANCED
repair options level for each question that you
answered, and then your recommendations will
be tailored accordingly.

Before You Begin Understand the Purpose of This Guidebook
Caterpillar developed this Cat Repair Options Guidebook to support efficient, competitive component
repair for customers. It is designed to serve as a useful “how to” reference for the development,
implementation and management of a successful Cat dealer repair options program.
There are eight steps in the creation of a successful repair options program. You may choose to
walk through this process on your own, or with the Caterpillar team’s guidance and support.
QUICK FINDER
DEVELOP EXECUTE
STEP 0 STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6 STEP 7 STEP 8
Take Gain Conduct Design Build Build Measure

Repair Repair Sell Repair Execute Results/
Assessment Leadership Market Dealer
Options Options Options Maintain
Support Analysis Capability
Offerings Offerings Process
Click on any of the steps above to be directed to the corresponding section of the Guidebook.

Before You Begin Understand the Purpose of This Guidebook (continued)
DEVELOP EXECUTE
STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6 STEP 7 STEP 8

Gain Conduct Design Build Build Measure
Repair Repair Sell Repair Execute Results/
Leadership Market Dealer
Options Options Options Maintain
Support Analysis Capability
Offerings Offerings Process
The Guidebook content is divided into eight sections:

STEP 1: Gain Leadership Support—Secure the backing STEP 5: Build Dealer Capability—Address several
of your dealership’s leadership/management team, fundamental aspects that are critical for program
and then use that support to lay the groundwork for an success—including defining “build rules,” reviewing
effective repair options program. exchange inventory, preparing your workforce,
and ensuring IT system support for selling and
DEVELOP executing repairs.
STEP 2: Conduct Market Analysis—Analyze your current
EXECUTE
market position, competitors and customers; gather Voice
of the Customer (VOC) and Voice of the Dealer (VOD) input; STEP 6: Sell Repair Options—Target and promote repair
determine target models. options to customers, and boost your staff’s selling efforts
with specific processes, methods, tools and training.
STEP 3: Design Repair Option Offerings —Determine which
components need repair options, determine which repair STEP 7: Execute—Deliver the repair to the customer,
options to offer for each component, forecast demand for including any changes or add-ons agreed upon during
each option. the repair.
STEP 4: Build Repair Option Offerings—Create a set of STEP 8: Measure Results / Maintain Process—Track sales
repair options, produce spec sheets for each model and effectiveness, track customer-facing and operational Key
component, and develop the standard jobs to support Performance Indicators (KPIs), and continually improve the
the repair. performance of your repair options program.
Note: The content in these sections has been written and formatted to correspond with the
content in the Repair Options Effectiveness Assessment Tool (explained on the previous page).

Before You Begin Understand the Purpose of This Guidebook (continued)
This Guidebook is Designed to Be Used by Dealer Management
The makeup of your dealership’s management team may include

any number of titles, such as:
• Service Manager • Product Support Manager

• Rebuild Center Manager • Inventory Control Manager
• Component Rebuild Center (CRC) Manager • Marketing Manager
• Reman Manager • Warranty Manager
• General Service Manager • Information Systems Manager
• Branch Service Manager
You may also choose to share this Guidebook with other personnel who will be directly
involved with repair options, such as your parts counter personnel, inside sales reps,
shop supervisors and your service staff.

Introduction Advantages of a Robust Repair Options Program
!
Greater Sales—Dealer-provided data shows Greater Profitability—Dealers that already have a
! ! that dealers with sophisticated repair options good repair options program are achieving 8 to 10
programs can capture up to 70% Percent of points in dealership profitability as a direct result of
Parts Sales Caterpillar (POPS-C) on engine, that program.
drive train and hydraulics major classes.
CONGRATULATIONS ON (In comparison, POPS-C for dealers that are Greater Closure Rate—Dealers have increased their
MAKING THE IMPORTANT not able to offer a complete set of repair closure rate to 66% versus an average of 33% when
DECISION TO BUILD OR EXPAND options is in the range of 30-45%.) customers are offered a complete set of repair options.
YOUR DEALERSHIP’S Greater Revenue—Dealers with a good repair
REPAIR OPTIONS PROGRAM!
This is a great opportunity to make a substantial
options program can increase revenue by 50%.
Increase revenue by 50%
impact on your organization’s future success.
By developing and executing a strong repair ! Service Efficiency—Dealers with a good
Greater
options program, you will create an important and repair options program can increase efficiency
competitive service differentiation. In addition, among their technician force by 20%, as well as
you will help increase your dealership’s sales, minimize time spent on invoice disputes.
revenue, service efficiency and profitability.

Introduction Advantages of a Robust Repair Options Program (continued)
Repair Options vs. Standard Jobs

Important, Early Level Set “Repair Options” and “Standard Jobs” Are Not the Same
REPAIR OPTION (Customer Facing) STANDARD JOB (Dealership Facing)
A repair option is a service offering made by a Standard jobs are the tactical, operational processes
Cat dealer to a customer. New, Cat Reman, Dealer dealers have in place to complete repetitive mainte-
Exchange, various rebuilds, various lower level repairs, nance and repair tasks.
as well as parts kits or General Duty parts, are all
different types of repair options. Standard jobs are used in service operations to provide
guidelines to support quoting, flat rate repair options
Cat dealers consult with customers to help them make and Customer Support Agreements (CSAs).
the right repair option selection. The price of the repair
option is defined by the scope of work: what is included
(and excluded) in terms of labor, parts, miscellaneous
and salvaged items.

Introduction Supporting You Every Step of the Way
Caterpillar is Committed to Supporting In addition, the Caterpillar Customer Services Support

You Every Step of the Way (CSS) leadership team and your Dealer Distribution
Services (DSD) partners are focused on providing the
As Caterpillar continues to implement the Repair Options
tools, training and technology you require to achieve
Framework Strategy, the company will help ensure that
your repair options goals.
dealers are able to offer clear, consistent and competitive
repair options to customers—for every machine.
The Importance of Caterpillar and
This will:
Cat Dealer Alignment
• enhance customer focus
“Component rebuild is dealer business.”
• improve customers’ ability and desire to do business
This is a statement that Caterpillar understands and
with Cat dealers
supports dealers to achieve. In fact, the Strategy is
• strengthen the Caterpillar and dealer partnership model focused on driving Caterpillar and Cat dealer alignment
to offer customers a complete range of parts and repair
• create more consistent dealer performance across
options to capture the maximum value of their machine
the network
and engine investment across the lifecycle.
• increase dealers’ potential parts and service sales
growth and profitability

Parts are the primary profit driver and
source of competitive advantage for both
Caterpillar and dealers.

Introduction Responding to Customer Needs
HERE ARE SOME OTHER IMPORTANT FIGURES TO CONSIDER:

70% of all customers will rebuild components within the next three years.
Of these, 72% are Global Construction & Infrastructure (GCI) customers.
66% of GCI Customers

45% of Rebuilds want engine options priced at or
are done by customers in-house.
Less Than 50% of New.
(Note: Caterpillar and dealers currently have
only limited offerings in this price range.)
!
There is a $1.1 Billion Opportunity in engines alone.
Do It Myself (DIM) customers present a key opportunity:

92% of global lost opportunity is with DIM customers.

Introduction Dealer Success Filling the Gap
Dealer Success Filling the Gap

Extensive worldwide VOC research conducted in
2013 with 135+ customers worldwide told
Caterpillar that customers want flexible and In other words, customers want to be able to choose from A complete set of repair options, as depicted by the
competitively priced repair options, so that they a complete set of parts and repair options, and they want example below, relates directly to the Repair Options
can “match the repair to the wear.” to be able to compare the price/value of options for their Framework described in the next section, which defines
component rebuilds in order to make intelligent choices the baseline of optimized customer solutions for both
based on the age of their equipment, application and maintenance/replacement parts categories (e.g.,
other factors. The Repair Options Framework Strategy is undercarriage), as well as parts offerings related to
focused on meeting those needs—and dealers that align repair option opportunities (e.g., engine rebuilds). The
with the Strategy will enjoy heightened business success. Framework serves as a visual guide for Caterpillar and
dealers to identify with customers and act on product
Successful dealers offer a complete set of repair options and serviceability gaps, and capitalize on opportunities.
for each component that brackets competitive offerings
and provides choices for customers.
The following chart provides an example of a complete set of repair options for customers (dealer and competition):
GCI Customer Engine Repair Options, Cat Reman, Cat Dealer
$70,000 New: $68K GAP

$60,000 We do not currently
offer repair options at
50% of new price point
$50,000
$40,000
$30,000
47% of New
$20,000
$10,000
AF = After Failure
$0 BF = Before Failure
w AF on AF BF F F on r BF uild ition erial
Ne n eti
ti e n ir A ge B etiti ai eb t at
ma p ng
a ma a
ep han mp ep l 1 R pe M
Re Co
m
xc
h R e R
xc Co
R
Co
m
Ca
t
rE Ca
t r
ale er E
r
ale Lev
e e&
l e e l e r Tim
a D a D r
De De ale ale
De D e

Repair Options Framework About the Cat Parts and Repair Options Framework
As a key element of the Across the Table initiative, When we do, we will not only meet customers’
Caterpillar and Cat dealers have recommitted to meeting needs, but also increase Percent of Parts Sales
customers’ future service needs. That means offering Caterpillar (POPS-C) and greatly improve how our
customers a complete range of parts and repair options enterprise manages parts and service marketing
to capture the maximum value of their machine and and commercialization. In short, the Strategy not only
engine investment across the lifecycle. will offer multiple benefits to customers to help them
succeed, it also will create a strong competitive
The Repair Options Framework Strategy is an important advantage for every Cat dealer.
movement down that path. The Strategy is about working
together to serve customers differently—the way they Repair options should be utilized to provide value
want to be served, not just the way we’ve done it in the choices for all customers’ machine and engine
past. To meet customer needs, we must deliver: component repairs. That is why Caterpillar developed a
Parts and Repair Options Framework—a common method
that dealers can use to meet customers’ repair needs.
1. BROAD range of options Because the Framework serves as a key, foundational
element of this Guidebook, we’re introducing it in detail
2. EXPERT advice & repair here so that you can keep it top of mind as you review
the rest of the content.
3. TIMELY quote & repair You will want to train your customer-facing personnel
to utilize the Framework (using the steps below), so that
they are able to understand customer purchase drivers
and specific repair option attributes.
The Framework defines the baseline of optimized

customer solutions. It serves as a guide for Caterpillar
and dealers to identify and act on product and
serviceability gaps, and capitalize on opportunities.

Repair Options Framework Describe the Framework to Customer-Facing
Personnel in Broad Terms
Using the visual shown below, tell your personnel that the Framework defines the baseline of optimized
customer solutions for both maintenance/replacement parts categories (e.g., undercarriage), as well as
parts offerings related to repair option opportunities (e.g., engine rebuilds).
Explain that, at a high level, the Framework ensures Caterpillar and dealers:
• Understand and stratify customer needs and purchase drivers
• Clearly articulate the attributes of each option
• Illustrate the price points across the repair options spectrum
• Offer the optimal solution for each segment
Optimized Customer Solutions
Primary
Purchase Understand and Stratify Customer Needs / Purchase Drivers
Driver(s)
Attributes Clearly Articulate the Attributes of Each Option
Suggested
Price Illustrate the Price Points Across the Spectrum
Point
Cat Parts
and Repair Offer the Optimal Solution for Each Segment
Options

Personnel in More Detail
The Framework is a customer-facing discussion guide that helps to ensure that customers capture the maximum value
of their machine and engine investment across the lifecycle. The framework illustrates Cat dealer excellence in providing:
a broad range of options; expert advice and repair; and timely quote and repair.
Depending on the system or component, the Framework details will vary. Regardless, the Framework is always intended
to guide the identification and delivery of valued, quality product support services and solutions to our customers that
provide the best economic proposition for their business.
In developing the Framework, Caterpillar focused on how a customer approaches the purchase decision and evaluates
which part and/or repair option is best for each respective customer machine. So, while it might seem obvious and fairly
simplistic, the Framework holds a great deal of value as we look to meet customers’ needs because it was created
from a customer’s perspective, not from a Caterpillar and/or dealer point of view. The Framework serves as an important
reminder that we must always align to our customers’ needs, not just by industry segments, but by attributes and buying
habits as well. That means offering options to meet their needs across the lifecycle.
Primary
Purchase Understand and Stratify Customer Needs / Purchase Drivers
Driver(s)
Attributes Clearly Articulate the Attributes of Each Option
Suggested
Price Illustrate the Price Points Across the Spectrum
Point
Cat Parts
and Repair Offer the Optimal Solution for Each Segment
Options

Personnel in More Detail (continued)
A conversation is the first step in determining which repair option makes the most sense for a customer’s situation.
There are four key factors you and your customer need to explore to arrive at a decision that delivers the best value.
LENGTH OF OWNERSHIP
UNCERTAIN 1 Age of equipment is the largest single
determinant of market value.
LONGER
UTILIZATION
LOWER 2 What is the role of this equipment in the
fleet and what is the hour requirement?
HIGHER
AFFORDABILITY
SENSITIVE 3 Cash flow is fluid, it has to be
examined in relation to every situation.
PREFERS
GUARANTEED
TURNAROUND TIME
FLEXIBLE 4 How long can the customer afford to
have this equipment off the job?
FAST

The Different Sections of the Framework

1. Primary Purchase Drivers—Used to develop an understanding and stratification of customer needs and how
they relate to the investment. Details can include: ownership (for how long does the customer intend to own the
machine), expected residual value at the end of life, utilization (number of hours, duty cycle, work environment, etc.),
cash investment and expected turnaround time to return the equipment to service.
Purchase Drivers
Four Primary Purchase Drivers
1 OWNERSHIP 2 UTILIZATION
How long does the customer plan to keep the How much does the customer use the equipment?
piece of equipment?
• Is it a production machine or a standby (utility)
• Equipment age is the largest determination of market machine? The utilization level may affect the
value. Does the repair recommendation make sense customer’s view of repair cost, component repair
relative to the equipment’s value? life expectancy and durability.
• If the customer is planning to replace the equipment • Has the equipment previously operated in a much
in the short term, why make a major investment now? lighter or more severe application than it is currently
New may not make sense. operating in? If yes, that could affect the expected
component life.
• Tailoring the repair option to meet a price point may
help the customer control costs. Consider Reman,
Dealer Exchange, dealer repair with piece parts.
• Consider the customer’s historical buying patterns.

For example, a customer who always buys new ma-
chines tends to sell prior to any major repairs.
Past behavior predicts future behavior and may
affect repair decisions.

Purchase Drivers (continued)

Four Primary Purchase Drivers
3 AFFORDABILITY 4 TURNAROUND TIME
What is the cost-to-value equation and customer How quickly does the equipment need to get back
expectation of price? to work?
• Are Reman, Dealer Exchange or dealer repair with • Customers often place a great deal of emphasis on
piece parts options available? the speed of repair. The repair option(s) offered to
the customer will differ depending on his turnaround
• Are there product updates available for the repair that
time expectations.
would help the customer lower operating costs, boost
productivity or improve safety? • What is the impact of downtime? Does the
customer’s operation incur other costs as a result
• Is the equipment difficult or costly to transport?
of the machine being down for repairs?
Is a field repair or component swap possible?
• Is there a backup machine available, either
• Is the equipment transient or local? That’s an
customer-owned or dealer-provided? If yes, that
important factor related to warranty administration.
lessens the urgency of the repair and allows the
If the machine will remain local, a dealer repair and
customer to consider slower turnaround options.
associated warranty can be effectively managed.
If the machine is transient, it would be difficult to
administer a dealer-provided warranty.

2. Attributes—Include the inherent and desired qualities of the equipment and also the desired state of the repair.
Discussion will include: product features, efficiency, expected life, warranty and equipment condition, including
before or after failure, and the condition of the core.
3..Price Point—An illustration of price points across the spectrum. It shows the relationship of capital outlay to
the optimal solution. The Framework will sometimes show a relationship between a new component and repair option,
shown in a percentage of a new component. These are general guidelines, and individual situations can vary.
4..Cat Parts and Repair Options—An illustration of the optimal solution for each segment. The options included in
the Framework are outlined below.
Repair Level Definitions
LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5
Minor Overhaul Major Overhaul Dealer Rebuild Reman New

Includes bearings, seals, Includes all Complete Rebuild Complete Component Complete Component
gaskets and normal Level 1 parts. including all Level 1 parts. Exchange with Cat Reman Replacement with factory
one-life “wear” parts. factory remanufactured new Cat component.
Reconditions or replaces All multiple-life parts
component.
Assumes all multiple-life other critical parts not are inspected and No core required.
parts meet Caterpillar meeting Caterpillar reconditioned, replaced or Core charge refund based
Note: In certain cases,
reuse guidelines. reuse guidelines. reused according to on condition of core.
U.S. environmental laws
Caterpillar salvage and
Excludes external parts, Offers same warranty require the return
Customer can specify reuse guidelines.
including injectors, and durability as a (and destruction)
additional parts
turbos, exhaust, Includes Dealer new component. of old engines.
or accessories.
electrical, electronics Exchange and Certified
and accessories. Machine Component
Rebuilds (CMCR).

The first level is focused on parts designed to wear

out the fastest, and by doing so, protect other more COMMON LEVEL 2 REPAIRS
expensive components. Wear parts in an engine would
include piston rings, main and rod bearings, seals and
ENGINES
gaskets. In this level, you are replacing these parts
Reusable parts could include injectors,
with new. For example, seals and gaskets should not
gears and crankshafts.
be reused and they cannot be remanufactured.
TRANSMISSIONS/FINAL DRIVES
Caterpillar recommends that front line components be
Reusable parts might include plates, disks and gears.
repaired before failure…as these parts are the front line
of wear and have the ability to keep more critical parts
HYDRAULIC SYSTEM
from wearing or failing prematurely.
These types of parts include plates, gears, springs,
housings and flanges.
COMMON LEVEL 1 REPAIRS UNDERCARRIAGE COMPONENTS

Like pins and bushings can be reused depending
ENGINES, TRANSMISSIONS, FINAL DRIVES, on how much life is left in them.
HYDRAULICS including the inspection and
replacement of:
• Seals • Bearings In Level 2 Repair Options, Level 1 parts like seals and
• Gaskets • Other Similar Parts gaskets are replaced and Level 2 parts like plates and
• Rings gears are examined for their reusability. Those that have
sufficient life remaining will be used to help reduce cost
and those that do not meet usability guidelines will be
replaced. For example, an engine repair might replace
piston liners as well as gaskets and seals.
The key benefit again is extending the life of the major

components at the lowest possible cost.

Level 3 Repair Options are designed to go beyond replace and repair by rebuilding systems for another life.
There are three types of Rebuilds in Level 3:
COMPLETE REBUILD
A This uses the customer’s core components and returns them to a
new state at a fraction of the cost of new.
DEALER EXCHANGE REBUILD

B Could be available at your dealership. This offers customers a rebuilt
component from dealer inventory. If available, this can give customers
fast turnaround and reduce costs.
CERTIFIED REBUILD
C Offers a complete rebuild of the customer’s own core
components with all the critical engineering updates included.
With three different types of rebuilds, you can optimize the customer needs—
based on his purchasing drivers—and deliver another full life of performance
at a fraction of the cost of new.

Level 4 and Level 5 repair options are rebuild options, but are differentiated based on the type of parts and components
included. Level 4 rebuilds include Cat Reman components—factory rebuilt to Caterpillar specifications with the
latest engineering updates and same as new Caterpillar 12-month warranty. Level 4 rebuilds can sometimes offer
warranty advantages in addition to fast turnaround and lower costs.
Level 5 rebuilds are differentiated from Level 4 rebuilds by including all new Genuine Cat Parts. At this level,
the clock can start at zero hours as it will work another life equal to a new piece of equipment.
IS YOUR CUSTOMER’S EQUIPMENT READY FOR A REBUILD?
If your customer has a good level of Condition Monitoring, you can assess their readiness for rebuild based on data
reports. If you do not have a sufficient data on hand, here are some quick questions you can ask to help determine
if your customer is rebuild ready:
• Based on your operating experiences, • Have you noticed recurring fluid leaks?
are your components reaching the end
• Are you experiencing clutch slippage?
of their first productive life?
• Have you found debris in your filters?
• Are there any oil sampling alerts?
• Are your brakes mushy and/or noisy?
• Are you experiencing power loss or overheating?
• Have you noticed increased oil consumption or smoke?

Repair Options Framework Explain the Framework from
a Real-World Perspective
Any time a customer is faced with a purchase decision, they first (often subconsciously) consider the drivers impacting
their purchase. For example, a customer might think, “I’m not sure how much longer I’m keeping this D6, so I don’t want
to spend a lot of money right now on parts and repairs.”
Next, the customer evaluates the range of viable options and the unique attributes of each option. Does the option meet
their expectation on turnaround? Is the option aligned to their high utilization application? Do they like to save money by
returning a core?
The customer then rationalizes the options against the price and perceived value of each option. At this point, the
customer makes a price-relative-to-value-derived decision. The Framework summarizes the decision making process
just outlined, from a customer point of view, and then shows how Caterpillar and Cat dealers need to align a parts and
repair option to each segment.
Considers Evaluates the Assesses Rationalizes

Purchase Drivers Range of the Unique the Options
(ownership, Viable Options Attributes of Against the
utilization, Each Option Price and
affordability, Perceived Value
turnaround) of Each Option

Repair Options Framework Explain How the Framework Applies to Repair Options
for Engines, Drive Train and Hydraulics
Because it was intentionally designed to do so, the Framework applies to repair options in much the same way as it
does for wear parts. As you see in the following example for engine repair options, the basic Framework elements
(i.e., purchase drivers, attributes, suggested price points) are still front and center. The primary difference is that the
range of options is more complex.

Primary Uncertain OWNERSHIP Longer
Purchase Lower UTILIZATION Higher

Driver(s)
Sensitive PRICE Prefers Guaranteed
Flexible TURN/AROUND Fast
• Extends life • Extends life • Core exchange • Core exchange • Core not available
• Before Failure • Before Failure • Before Failure • Before or After Failure • After Failure
Attributes • Moderate to High usage • Moderate to High usage • Moderate to high usage • High usage • High Usage
•P arts with • Rebuild/Exchg/Certified • New / Reman / Exchange • Factory new
100% replacement
Suggested 25 – 50% 55 – 60%

Price Point < 25% 60 – 80% 100%
Relative to Enhanced reuse & salvage results in lower price point.
Factory New
Level 1 Level 2
Reseal & Rebearing Reseal & Rebearing Dealer Rebuild Cat Reman Cat New
PLUS
• 100% new parts • 100% new parts PLUS •D ealer Rebuild, • Immed. availability • Immed. availability
• Can be in-frame repair • Inspect Level 2 parts Dealer Exchange or • Full life rebuild • Long life
• Inspect Level 2 parts and salvage or replace Certified Rebuild • Before or After Failure
• Lower O&O Costs only those not meeting • Immed. availability • High usage
reuse guidelines
Products • OTC Kits (based on • Full life rebuild • Like new warranty
market analysis) • Can be in-frame repair • Before or After Failure
• Lower O&O costs • Moderate to high usage
• New, Reman or
salvaged parts
• Dealer Warranty
Extend Component Hours Reset Component Hours to Zero

Repair Options Framework Explain How the Framework Applies
to Maintenance/Wear Parts
The best way to illustrate the value of the Framework for wear parts is to look at Cat Undercarriage. Through VOC input,
the Undercarriage team knows that customers evaluate their purchase decision on three primary drivers: utilization,
impact and abrasion. With that knowledge in hand, the Undercarriage team looked to more fully align their product
lineup to those purchase drivers. What they found was that they had a gap in their undercarriage portfolio. They did not
have an option for customers looking for a cost-effective solution for their lower hour usage machines and lighter duty
jobs. So they filled that gap with General Duty Undercarriage. Now, Cat dealers are able to offer customers a range of
options aligned with their unique purchase drivers and desired price point. Keep in mind, each product (General Duty,
Heavy Duty and SystemOne) represents the optimal solution, the best value, for that segment.
It’s important to note that each option represents the BEST VALUE to the customer for their given situation. It is an
absolute MUST that we never identify the various options Caterpillar and dealers offer using terms like “good, better,
best.” The different options simply meet different needs for different types of equipment in different applications at
different points in the lifecycle. They are not intended to be, nor should they be referred to as “good, better, best.”
Optimized Undercarriage Customer Solutions

Primary
Purchase Utilization Impact Abrasion
Driver(s)
• Low to moderate impact conditions • Low to moderate impact conditions • Low to moderate impact conditions
• Low to moderate abrasion • Low to moderate abrasion • High abrasion
• Fixed bushing design • Fixed bushing design • No bushing turns/no maintenance
• Run to destruction • Run to destruction • Reusable components
Attributes • Excellent fine grading performance
• Low initial investment • Low initial investment • Increased wear life of 30 to 50%
• Low to moderate utilization rates • Low to moderate utilization rates • Highest initial investment, lowest cost/hour
• 4 years / 3,000 hours UC Assurance • 4 years / 3,000 hours UC Assurance • Moderate to high utilization rates
• 4 years / 6,000 hours UC Assurance
Suggested Price
Point Relative to 75% 100% 125%
Heavy Duty
General Duty Heavy Duty SystemOneTM

Best Value Best Value Best Value

STEP 1
Gain
Leadership
Support
STEP 1 GAIN LEADERSHIP SUPPORT

STEP 1.0 Leadership Support
STEP 1 As you prepare to plan for and develop your dealership’s repair options program, gaining top-level support will
make your job a lot easier. If you can persuade your executive management team to allocate necessary time,
Gain budget and resources needed for program development, then the program is much more likely to succeed.
Leadership
Support Therefore, this section first focuses on the involvement of your executive management team, and then outlines
a series of recommended tasks to jumpstart your repair options program development process. These important
action items will lay the necessary groundwork for energizing and engaging parts and service employees.
Section Quick Finder

1.1 Secure Leadership Buy-in and Support
1.2 Define, Document and Communicate Your Plan
1.3 Align a Dedicated, Focused Team
1.4 Define Roles and Responsibilities
1.5 Manage Risk
1.6 Incentivize Personnel

STEP 1.1 Secure Leadership Buy-in and Support
Dealers who excel in the repair options space will tell you that it takes a holistic, “total dealership” approach.
STEP 1
These dealers have aligned four key areas of their dealership (parts, service, administration, and sales and marketing)
Gain to work cohesively and collaboratively to offer the best, most customer-aligned solution. In doing so, they’re securing
Leadership more sales, growing POPS and driving dealership efficiency.
Support
Repair Options Strategy Requires “Total Dealership” Approach
PA R T S M I N I S T R AT I O
N
AD
Availablity Resource Commitment
Exchange Reporting Structure
Pricing Cost Accounting
SHARED
SERVICE GOALS ES / MARKETI
NG
Labor Hours S AL
Standard Jobs
Parts Reusability Prime Product Strategy
Variance Analysis Product Support Strategy
Types of Repairs Application/Customer Needs
Repair Process Target Markets
Capabilities Forecast & Budget
Structure of Job Customer Relationship
Component Codes
Service Capability

STEP 1.1 Secure Leadership Buy-in and Support (continued)
STEP 1 To achieve a “total dealership” approach for repair options, you must secure senior leadership support, endorsement and
funding. To align the support of your dealer leadership team, follow the recommendations outlined on the next page.
Gain
Leadership
Support
Carter Machinery Places Emphasis on Gaining and
Maintaining Leadership Support
Cat Dealer Carter Machinery, headquartered in Salem, Virginia, understands how important executive level
endorsement is to the success of their centralized component rebuild strategy. In order to generate the critical
mass required to make a centralized rebuild operation successful:
• All dealer branches understand and participate in the strategy (i.e., sending potential revenue work from the
branch to the Component Rebuild Center (CRC). This requires dealer executive level direction involving sharing
profit generation with branches or providing other incentives to ensure rebuild work is funneled into the CRC.
•.Carter’s executive leadership teams spends considerable time focused on the CRC operations, monitoring
customer acceptance, and identifying and supporting the necessary investments.
•.The dealership fosters a corporate culture that builds: 1) consultative communication skills for customer-facing
personnel, 2) business acumen (service efficiency, product support marketing and merchandising),
3) customer satisfaction and 4) customer support and technical expertise.

STEP 1 Cat Dealer Empire Southwest, headquartered in Mesa, Arizona, understands the long-term benefits of allocating
resources to their repair option offerings and executing a centralized component rebuild strategy. Empire recently created
Gain a Commercial Pricing Group which is responsible for establishing Product Support market pricing, as well as estimating
Leadership and quoting standard jobs. The group, comprised of six Pricing Specialists and a Commercial Pricing Manager, reports
Support
organizationally to the Product Support division of the dealership.
The overall strategy of the group is to:
• Develop a “market-based” pricing strategy for Empire’s Service organization with emphasis placed
on identifying cost drivers and facilitating solutions where market-based pricing cannot be achieved.
• Provide data and analysis to support business solutions and strategy development for Empire’s
Product Support business.
• Develop and introduce a repair options program to capture lost POPS and Service Dealer Customer
Acceptance Level (DCAL).
• Implement the use of standard jobs and repair options throughout Empire’s service organization.
The benefits of Empire’s newly implemented strategy include:

• Increased POPS and SDCAL • Centralized estimating and quoting
• Increased closure rate • Consistent, repeatable and sustainable service pricing
• Increased service efficiency • Enhanced client optimization and loyalty
• Improved profitability

STEP 1
Gain
Leadership Securing Leadership Support Checklist
Support
Engage the collective leadership team early in the process
Be prepared to answer why your dealership should implement a repair options program
• Quantify the value of the lost opportunities that your dealership could gain
• Demonstrate how competitors in your region are stepping in to win business

from your dealership and the impact on your bottom line
• Show the alignment of your repair options programs plan to overall dealership goals

Define and document a communication plan that meets the needs of your leadership team
Review the 8-step implementation process map with the leadership team

Review the strengths and weaknesses of your dealership based on the results of the
Repair Options Assessment (see page 4)

Document your repair options plan (Step 1.2)
reate a focused implementation team (Step 1.3)

C
Review key roles in the process and gain commitment for those resources (Step 1.4)
Utilize change management tools to assist with implementation

STEP 1.2 Define, Document and Communicate Your Plan
STEP 1 Each dealership needs a formal repair options plan that defines how repair options fit within their overall service offerings.
This plan will serve as a guide for decisions that will be made during implementation. The plan should be formalized in
Gain a written document. Every dealer’s repair options plan will be different because of differences in the resources
Leadership (i.e., people, money, facilities, etc.) available. However, experience has shown that there are some features common
Support
to most dealers’ plans, and they’re outlined in the following checklist.
Repair Options Plan Development Checklist

Situation analysis. Before objectives can be established, your dealership’s
current situation must first be evaluated. This involves collecting information about:

• the types of repair options currently offered
• current prices and pricing methods for repair options
• the place(s) where repairs are performed
• parts and service strengths and weaknesses
• how your dealership is currently promoting and selling repair options
• how PSSRs/ISRs are compensated for repair options
• which machines/components customers usually bring in for repairs
• which machines/components customers usually repair themselves

Clear objectives
W ho the competition is and what they offer, including their pricing

Targeted equipment models and key components that will be covered
A n expectation of the sales volume and percent of repair business that will be
performed through repair options

ey differentiators of the dealer’s repair options program (e.g., warranty,
K
turnaround time, exchange components)

STEP 1.2 Define, Document and Communicate Your Plan (continued)
STEP 1
Gain
Leadership Repair Options Plan Development Checklist (continued)
Support

The type of customer that will be targeted to gain incremental business
epair option details. To get started, be sure to:

R
How to State Clear • develop standard job descriptions for each repair option
Objectives in Your Plan • determine standard parts and labor costs for each repair option
• establish prices and evaluate competitiveness of each option
Cat Dealer Carter Machinery is focused on “living • establish sales goals
the Cat Parts and Repair Options Strategy” and has • develop effective methods for promoting the repair options
documented the following objectives for rebuilds:
Measurable targets, along with a schedule for completion. Targets may include:
• Align with our customers’ expectations
by providing: • Repair options unit sales
• Parts and Service Dealer Customer Acceptance Level (DCAL)
– Multiple repair options
• Service efficiency
– A price-competitive rebuild • Overall profitability
– The flexibility for each customer’s individual • Customer satisfaction
financial requirements • Number of new customers or customers “won back” to your dealership
• Qualify as subject matter experts in the
customer’s eyes for all of their component needs
• Support the long term goal of lowering Keep the Plan Up to Date This can be accomplished several ways:
the customer’s owning and operating costs
It is important the plan becomes a “living document” • p rinted communication, such as handouts, flyers,
that is updated regularly so that, at any point in time, handbooks and new-employee literature
it can be referenced to determine if the program is • e lectronic communication, including emails and
meeting expectations. In addition, determine how and Intranet announcements/updates
when you will communicate the plan to all current parts
and service employees who will be involved in your • v erbal communication during departmental/team
repair options program, as well as any employees who meetings and one-on-one discussions
may be hired in the future.

STEP 1.3 Align a Dedicated, Focused Team
STEP 1 A dedicated repair options project team is highly recommended to ensure alignment to the overall program,
and also to ensure buy-in from the Service Department. This project team should consist of highly skilled
Gain representatives from Parts, Service, Administration, and Sales and Marketing, as well as dealer headquarters
Leadership and branch management. Not all of these team members have to be full-time team members, as long as they
Support
actively participate and make sure key metrics are being achieved.
Genuine Commitment Developing a comprehensive plan is the most important aspect of your repair
Earns Customer Loyalty options program because it organizes and directs your long-term service
By assigning a dedicated repair options project team,
marketing efforts. Without such a plan of action, it is unlikely your efforts
you are taking the first step toward demonstrating can be coordinated well enough to fully achieve many of the key strategies
real commitment to your repair options program. and objectives.
One person who understands the importance of that
kind of commitment is Jim Fusco, Parts and Service
Manager for Carter Machinery’s Mining Division.
He says customers want to partner with Carter

because of the dealership’s commitment to
component repair. “Our customers see it as
another way Carter Machinery is investing in their
business,” he explains. “Having that knowledge, the
understanding of when and why a component failed,
helps position Carter as the reliable experts a
customer needs to make informed decisions.”

STEP 1.4 Define Roles and Responsibilities
STEP 1 Without assigned roles and responsibilities for repair options, your dealership will not be able to properly implement its
formal repair options program. This means defined personnel will not be acceptably efficient or effective, and repair options
Gain may not be accurately developed, defined, priced or marketed.
Leadership
Support
Assign Two Important Roles
There are two important roles necessary to make the repair options program a success at your dealership: a Repair
Options Marketing Coordinator position and a Service Operations/Standard Job Coordinator position. The individuals you
choose to fill these two roles can be responsible for managing all aspects of your repair options program—starting with the
initial analysis and planning stages, and then moving through program development, execution and measurement.
Two Roles Needed to Lead Repair Options Program

Repair Options Marketing Coordinator Service Operations/Standard Job Coordinator
Should have these roles and responsibilities: Should have these roles and responsibilities:
• Define customer needs and understand competition. • Work with Repair Options Marketing Coordinator to
• Work with Service Operations/Standard Job define content of repair options.
Coordinator to define the content of repair options. • Build standard work orders (standard jobs) with parts,
• Be the link between Parts and Service labor and miscellaneous content to be used to
for repair options. maximize efficiency in service operations.
• Target high-opportunity machines and engines to • Work with Service Operations to implement the use
determine the key repair options required by of standard jobs for repair options.
customers in the local market. • Implement branch or repair center processes to
• Price repair options to balance a sellable price monitor parts, labor and miscellaneous variance
and risk to the dealership. on standard jobs.
• Determine where exchange components • Assess capability of individual service operations.

should be leveraged. • Maintain standard jobs based upon branch
• Assess capability of individual service operations. feedback and work order analysis.
• Help general management define the formal

repair options plan.

STEP 1.4 Define Roles and Responsibilities (continued)
STEP 1 Other Key Roles The Importance of Service Department Buy-in

Gain Ultimately, many existing roles with the dealership In most cases, the packaging of service and parts
Leadership will have to work together to make the repair options products into a defined repair option program will represent
Support program a success. In addition to the Repair Options a significant change from traditional service marketing
Marketing Coordinator and the Service Operations/ methods (time and material). Therefore, the Service
Standard Job Coordinator positions, there are some Department Management, in conjunction with the repair
additional roles within the dealership that may need to options program coordinators, must complete the definitions
be considered. You may want to consider an Incentive and development of the dealership’s repair options.
program coordinator for sales staff. This is covered in
more detail in the next section (Step 1.5). When centralized repairing is not utilized (i.e., when individual
branch locations handle their own repairs), all branch service
You may also need to add inspection capabilities within managers performing a repairing function must be involved to
the dealership. You will also need to train many of your ensure the program is embraced at the branch level.
existing team members so that they can operate within
the Repair Options Framework. Additionally, precise service operations procedures must be
established, i.e., work order opening, coding, repair controls/
standards, customer follow-up and contacts. This ensures
that repair options meet customer expectations, and that
your dealership can track its effectiveness and profitability
in performing the repair options.

STEP 1.5 Manage Risk
STEP 1 Cat dealers have traditionally focused on the high-end, Here is a list of additional factors to consider
“complete rebuild” business. This practice has enabled when managing risk:
Gain competitors to gain service-related market share by
Leadership •C
onsistent application of standard jobs to complete
offering low-end repairs, including rebearing and
Support repairs with a high degree of quality
reseal repairs. To gain back your competitive edge,
your dealership will most likely need to offer additional • T imely review and update of standard jobs based
low-end repairs. on experience
•U
se of Extended Protection Plans (EPP) to insure
As you work to implement a broader range of repair certified rebuilds
options, you will need to evaluate how you manage the
risk associated with low-end repairs. One of your key risk • Use of Extended Service Coverage (ESC)
management tools is your repair expertise and advice. • Technicians skilled in Applied Failure Analysis
Ensure that your service technicians are well-trained
and prepared to offer their advice to guide the customers • T echnicians trained and skilled in Reuse and
toward a high-quality repair based on their situation. Salvage practices
For more information on Cat Insurance, please visit
https://dealer.cat.com/EPPESC

STEP 1.6 Incentivize Personnel
STEP 1 Are your PSSRs, ISRs and parts counter people Responsibilities for this position may include:
incentivized to sell repair options and before failure • Assisting with incentive program development and launch
Gain repairs? If your dealership currently has no such reward
Leadership system in place, consider establishing a formal incentive • Answering participants’ questions and concerns
Support
program that achieves some or all of the objectives in • Tracking participants’ progress on a monthly basis
the callout at left.
•D
eveloping a timely monthly summary of
participants’ progress
Incentive rewards may include certificates of achievement,
plaques, gift cards, merchandise, apparel and other items • Updating dealer management on participants’ progress
Incentive Program Best Practices that are deemed to be of value to program participants. •P
roviding encouragement, feedback and progress
updates to participants
• Reinforces the repair options program’s Assign a Coordinator
purpose and qualifying criteria •W
ork with dealer management to manage
As you plan and develop your incentive program,
• Encourages participation of all PSSRs, rewards distribution
you will want to select someone to serve as the overall
ISRs, technicians and parts counter employees coordinator. This individual should be a self-starter with
• Motivates personnel to adopt critical good organizational skills in order to keep the system
success initiatives related to repair options running smoothly.
• Provides a structured development program
for individuals
• Uses a well-defined scoring system
• Rewards individual effort
• Promotes teamwork within a branch or group
• Rewards team effort as well as individual effort
• Promotes healthy competition between branches
• Focuses on meeting and exceeding targets
• Tracks status of effort and achievement
on a monthly basis
• Increases incremental sales of repair options

STEP 1.6 Incentivize Personnel (continued)
STEP 1 You also may choose to create an incentive program committee, consisting of the coordinator and other
key individuals (e.g., your dealership’s Human Resources Director, Service Manager and Parts Manager).
Gain The committee can be involved in planning and developing your incentive program, and also provide
Leadership general oversight throughout the program’s implementation.
Support
When a new incentive system is created, oversight guidelines should be

established, documented and conveyed to employees. For example, the
guidelines may state that the service manager should be involved in
validating whether or not a component truly warrants a before failure repair.

STEP 2
Conduct
Market
Analysis
STEP 2 CONDUCT MARKET ANALYSIS
Quick Finder | Glossary | Resources | Help Repair Options Guidebook n Page 40

STEP 2.0 Conduct Market Analysis
Every good business plan includes a market analysis. Therefore, as you prepare to grow your dealership’s repair
STEP 2
options business, take time to thoroughly analyze the current market you serve. The purpose of this section is to identify
Conduct your (current and potential) customers’ needs, pinpoint your current market position and identify which models need
Market repair options to meet the needs of customers. After you complete all of these steps in order, you will be equipped to
Analysis dive into repair options development.
The remainder of this section is full of tips for increasing market engagement, and preparing for the expanded
business that results from that engagement.
2.1 Validate Population and Customer Data
2.2 Identify Customer Needs
2.3 Identify Market Position
2.4 Choose Target Models

STEP 2.1 Validate Population and Customer Data
Accurate customer and machine information is the foundation for analysis and subsequent actions or
STEP 2
initiatives. Ideally, your dealership should have strict review processes for improvement and “cleansing”
Conduct of data. If this is not occurring (or hasn’t for some time), Caterpillar can help get you started.
Market
Analysis Data Cleansing Services Provided by Caterpillar
If you’re looking for help cleansing your data, the Customer Information team within the Caterpillar
Customer Insights Division supports dealers to profile, cleanse and match dealer data through the
Caterpillar Customer Information Management (CIM) database (the Caterpillar safe source).
Through a comprehensive dealer data services model, the Customer Information team provides
a suite of services that can be leveraged to save dealers both time and money.
The Dealer Data Integrity Process (https://Dealer.cat.com/ddip) includes customer and equipment data
cleansing/enrichment, as well as in- and out-of-territory reporting.

STEP 2.1 Validate Population and Customer Data (continued)
The process involves validating legal name and address information; identifying and listing duplicate accounts;
STEP 2
reporting data quality issues for unmatched records; and enriching customer data. The result of the process is
Conduct improvement in data quality to support dealers’ marketing initiatives, and enhanced accuracy of customer
Market information for dealer use in various applications.
Analysis
THE DEALER DATA INTEGRITY PROCESS

IS COMPRISED OF FOUR REPORTS:
EQUIPMENT DATA CLEANSING:
1 Serial number accuracy (machine/engine)
CUSTOMER DATA PROFILING:

2 Account information accuracy (machine/engine)
CAT EQUIPMENT
3 possibly out-of-territory (machine only)
UNKNOWN CAT EQUIPMENT

4 possibly in-territory (machine only)
This process assists dealers in optimizing the accuracy of their equipment populations and customer accounts. It is meant
to be a supplement to any ongoing data maintenance procedures dealers may already have in place. Dealers must establish
internal business rules and processes to manage data discrepancies identified as a result of the process and ensure the
consumption of high quality information. Visit https://Dealer.cat.com/ddip for current information.

STEP 2.2 Identify Customer Needs
Understanding customers’ needs is key to developing This approach should prevent you from gathering
STEP 2
the correct repair options offering. Once you have de- unnecessary information which will increase the
Conduct termined the highest opportunity models and customers, response rate of your survey and reduce the costs
Market consider gathering some region-specific Voice of the to execute it.
Analysis Customer (VOC) so the offering can match the needs.
The Customer-Focused Business Strategy (a standard You’ll find a sample survey on Dealer.cat.com developed
6 Sigma tool used in the Define phase) or a Decision with engines in mind; however, the same set of questions
Framework (referenced in Gap 1 of Services Marketing) can be modified for drive train, hydraulics and other
would provide a clear approach on how to develop a components as needed.
customer survey. The format of the survey is not critical,
whether Web-based, by mail, or via phone interview,
but the approach used to develop the survey makes all
the difference.
More detail is available in 6 Sigma training and

Services Marketing training, but a quick summary is:
• Avoid jumping straight to “what questions should be
in the survey?”
• Identify what business decisions your dealership needs
to make. A likely answer might be “What repair options
do we need to develop to sell more parts?” or “What
repair options do we need to offer to attract and retain
more customers?”
• Once the business decision is clearly defined, identify
what information is needed from the customer to make
that decision.

STEP 2.3 Identify Market Position
Before you plan and develop your dealership’s repair Examples of value-added services that
STEP 2
options program, it is important to understand the competitors may offer are:
Conduct presence and strength of competitors in your service • Extended warranty
Market territory. This will enable your dealership and Caterpillar to
Analysis offer competitive products and solutions that better meet • Commercial offerings/Customer Support Agreements (CSAs)
customer needs. • Flexible plans/options
Why It’s Important to Know Who You’re • Remove and install of components
Competing Against • Component repair option kits
Another Great Source for •C
ompetitors are gaining strength, becoming larger and • Guaranteed turnaround times
SWOT Data: Your Staff! offering our customers additional service or product
• Highly trained work force
support options of which we need to be aware. Without
Often dealer personnel (including Product Support this competitive knowledge, it is more difficult to market • Drop-in components
Sales Representatives (PSSRs), service managers and our services. • Repair and return customers’ core
branch managers) know where improvements are
needed in the repair options process. It helps to have
a process in place to collect and act upon
regular feedback from employees. For example,
a short internal survey may determine deficiencies in:
• Customer inquiries/requests for a specific repair option
• Gaps in offerings
• Incorrect price/value offerings
• Lack of sales tools
• Timeliness to quote or repair
• Inefficiencies

STEP 2.3 Identify Market Position (continued)
STEP 2
PERFORM A SWOT ANALYSIS
Conduct
Market
1 How to Collect and Use Competitive Information
Analysis
An easy approach is to start with a broad perspective and at each step develop more details.
The summary elements of a SWOT analysis are:
Characteristics of the dealership that

S STRENGTHS provide a competitive advantage.
One example would be product expertise.
Characteristics of the dealership that reduce its

W WEAKNESSES competitive advantage. One example would be
lack of PSSR coverage.
Characteristics of the marketplace that the dealership can use

O OPPORTUNITIES to gain advantage. One example would be economic conditions
that make long-term ownership more profitable.
Characteristics of the marketplace that could cause the dealership
T THREATS to lose advantage. One example would be prices charged by

competitors and their attempt to erode the Cat brand value proposition.

STEP 2 DOCUMENT A HIGH-LEVEL PERSPECTIVE ON COMPETITORS

Conduct
Market
2 Who are the main competitors? Often some of this is well understood throughout the dealership
and only needs to be written down. Further research can be conducted via the Internet or through
Analysis information gathering led by PSSRs or other customer-facing staff. This involves talking with customers
about competitors’ options (including pricing) during contacts, and especially during the bid process.
SSESS THE OVERALL PRODUCT SUPPORT

A
3 CAPABILITIES OF EACH COMPETITOR
There are many details that could be called out in this part of the analysis.
Some examples include:
• What warranty does the competitor offer?
• What portion of customers’ business (equipment population) can the competitor serve?
• What events within the equipment lifecycle can the competitor exploit?
• What alternative parts offerings does the competitor have to offer?
ASSESS THE RANGE OF REPAIR OPTIONS

4 BY EACH COMPETITOR
This assessment may vary, but typical elements to identify for each repair option would include:
• Components—Includes parts that are always replaced and parts with reuse opportunity.
• Repair Operations—Includes what work is done to implement the repair option as well as any
additional activities that may be added during the repair.
• Price—Often includes a base price and additional charges for additional components or repair activities.

STEP 2 IDENTIFY GAPS IN EACH COMPETITOR’S

Conduct
Market
5 APPROACH AND OFFERING
Analysis There are many details that could be called out in this part of the analysis. For starters:
• What repairs is the competitor unable to offer? Why?
• Are there customer segments that the competitor is weak in reaching? Why?
• Where is the competitor unable to satisfy a purchase driver? Why?
Dealers with successful repair
options programs have POPS-C
and service DCAL that are more IDENTIFY GAPS IN YOUR OWN OFFERING
than 10% above region average, 6 The specific approach used to work on tactical details will vary from dealership to dealership.
However, the overall result should be to identify in a specific way where repair options can be leveraged to:
and the trend is flat or positive. • Offer multiple repair options that better meet the customer’s needs.
• Defend against competitors by offering customers repair options that our competition can’t duplicate.
LASTLY, IDENTIFY HOW THIS ENVIRONMENT IS

7 IMPACTING YOUR MARKET SHARE
Understanding your Percent of Parts Sales Caterpillar (POPS-C) and estimated service Dealer Customer
Acceptance Level (DCAL) will help identify lost opportunity. POPS-C is measured by dividing total Cat parts
orders by total opportunity of Cat parts in dealers’ Cat machine population. Lost opportunity is the inverse of
this calculation and a very important metric to help understand where we need to focus efforts. Service
DCAL is measured by parts sold through service.
Your dealership’s POPS-C and service DCAL should be compared to regional average, similar size dealers
and the trend over the last five years.

STEP 2.4 Choose Target Models
STEP 2 Identify Opportunity

In order to prepare for repair options program Dealers send their customer, equipment, work order and
Conduct
Market development, you must determine what high invoice data to Caterpillar. OLGA then uses: 1) BUILDER files;
Analysis opportunity models to pursue. The idea is to calculate 2) Service Meter Unit (SMU) information from Product Link™,
yearly opportunity for your given dealer population, oil samples, warranty claims, work orders and Service
thus allowing focus on key models. Information Management System (SIMS) reports and more;
and 3) Utilization rate data to calculate a Dealer’s parts and
Select the models with the largest populations that service opportunities.
are of an appropriate market value and age (hours) for
component rebuilds. Select the target models from this OLGA extends and replaces the existing functionality of PTOS.
data and verify these key models with PSSRs and In addition, OLGA identifies future repair events to calculate
Service Managers. future opportunities monthly for the next 12 months, and
annually for the totals of the next two and three years.
Opportunity Lead Generation Analyzer To learn more about the important role OLGA can play in
Opportunity Lead Generation Analyzer (OLGA) is a your repair options program success, visit Dealer.cat.com.
Web-based application developed by Caterpillar that can
calculate an individual Cat dealer’s parts and service
opportunities based on equipment population reported
by the dealer. OLGA calculates past and future dealer
opportunities by combining data from dealers with
data from Caterpillar sources based on the actual
equipment lifecycle position. As a result, OLGA provides
more accurate and realistic calculations for Percent of
Parts Sales Caterpillar (POPS-C) and Percent of Labor
Sales Caterpillar (POLS-C) than the Product Tracking
Opportunity System (PTOS) could provide.

STEP 2.4 Choose Target Models (continued)
STEP 2 Prioritize the Development of Repair Options

A repair options program cannot be implemented for all component repairs and for all equipment models products
Conduct
Market at the same time, as the task would be overwhelming. A better approach is to select and develop just a few,
Analysis targeted repair options offerings at one time. This way, the overall task can be broken into smaller, more manageable
segments. Begin by selecting an initial target commodity—one that represents a significant incremental sales opportunity.
Once your dealership has begun offering repair options strategically and begun measuring overall performance,
this step can be repeated with additional models.
In order to determine where you should start with your offering, it is important to understand the current situation
with regard to POPS and Service DCAL by major class.
DCAL is the percentage of parts sold through the service department compared to the total parts sold at your
dealership, all parts at cost. It is most useful in trend analysis. Use the following formula to calculate DCAL:
Revenue Service Parts $ + Interdepartmental Parts $

Service DCAL = x 100
Revenue Service Parts $ + Interdepartmental Parts $ + Direct Parts Sales $

STEP 3 DESIGN REPAIR OPTIONS OFFERING

STEP 3.0 Design Repair Options Offering
Now that you have secured leadership support and completed your market analysis, it is time to move forward
STEP 3
with repair options program development. As you work through this section of the Guidebook, you will learn
Design how to align your program with the Cat Parts and Repair Options Strategy. The primary objective is to develop
Repair
Options a program that offers customers a complete range of parts and repair options to capture the maximum value
Offerings of their product investment across the lifecycle.
During your program development process, remember to focus on

the three cornerstones of repair options success:
1. BROAD range of options

2. EXPERT advice & repair
3. TIMELY quote & repair
3.1
Identify Which Components to Deliver
3.2 Identify Desired Price Points
3.3 Adjust Based on Non-Price Factors
3.4 Forecast Demand
3.5 Concentrate on Lowering Customers’ Costs

STEP 3.1 Identify Which Components to Deliver
STEP 3
The decision on which components to deliver will Component Identification
flow directly out of the market research your dealership
Design The Major Component ID Tool enables a user with access
conducted earlier. Typical components to consider
Repair to SIS Web to submit a list of Cat product serial numbers
Options would include:
and receive a report of the part numbers of major
Offerings • Engine components within each product. The first generation
• Transmission and Torque Converter (often integrated) of the tool reports the part numbers for the engine,
transmission, torque converter and final drive. A user
• Final Drive may submit up to 1,000 serial numbers in an input file.
• Hydraulic Pumps and Motors
The tool uses product build invoices, part manuals,
• Hydraulic Cylinders
and additional engineering data to identify the
components. The current identification success
rate is near 80%. This gives the planning team a
significantly better starting point to analyze the
population of major components and develop repair
options, service capability/capacity and inventory plans.
Future generations of the tool may have additional
components and increased identification success.

STEP 3.2 Identify Desired Price Points
This is an excellent time to begin laying out your This type of graphical representation can be used to
STEP 3
existing repair options on the Repair Options Framework identify where your dealer currently operates. The next
Design (preferably at the major class level) and identify which step is to refocus tightly on relevant areas (scale the
Repair new options are needed to fill gaps and address chart to max out at 50% of new, as few customers are
Options
competition. willing to pay for a premium replacement outside of
Offerings
warranty) and then add the competitive price points
Here is an example of similar analysis: from your market analysis.
SAMPLE D6R DRIVE TRAIN REPAIR OPTIONS

$38.9K $9.3K $20.1K
100%
D6R Premium Replacement
Reman Replacement
Includes:
Dealer Exchange
Parts & Labor ($80/hr) Dealer Rebuild
80% Dealer Rebuild (Used)
Premium Replacement Dealer Rebuild (Classic)
is the only option with Dealer Reseal / Rebearing
guaranteed availability
60%
40%
$9.3K $2.4K
20% $3.0K
$7.4K $2.0K $2.0K
$6.6K $1.7K $1.4K
$6.2K
$5.8K
0%
TRANSMISSION TORQUE PLANETARY
CONVERTER AXLE

STEP 3.3 Adjust Based on Non-Price Factors
The price of your repair options is obviously a big consideration in your ability to compete in the marketplace.
STEP 3
Often price determines whether or not a customer will even engage with their Cat dealer for an initial dialogue or quote.
Design But setting a competitive price is not the only factor in your success. There are four additional factors that are also
Repair
Options important when identifying which repair options to offer—especially when considering the long-term impact on your
Offerings overall strategy’s success.
1 REPAIR LEVEL 2 ALTERNATIVE PARTS
Is there space in the marketplace for a Is there appetite in your region for a
“new” repair level, somewhere between a lower-priced option using Classic or Used
KEEP IN MIND:
full rebuild and a rebearing/reseal? While parts? In the example on the previous page,
it is doubtful that this repair is actually it does not appear that Classic or Used can As you plan, keep in mind
that Classic and Used parts
“new,” could framing the option differently offer a significant decrease in repair cost.
are not as durable as
with customers help them realize you are Yet, depending on where the competitors’ premium Cat parts.
willing to work with them? offerings fall, they might actually be a viable Pursuing a repair option
solution. Another option is to develop your using non-premium parts
dealership’s used parts processes or should be driven by
request that Cat Classic Engineering look customers’ purchase drivers,
particularly lower utilization
into releasing additional parts.
and higher tolerance for risk.
These two drivers often
RELEVANCE TO DO IT correlate with price
3 SERVICE CAPABILITY 4 MYSELF (DIM) CUSTOMERS sensitivity, but price
sensitivity alone does not
make a lower-durability
There are many ways your overall service Recent analysis shows that DIM customers repair necessary..
capability will impact repairs. The most represent 92% of lost sales. Does your
obvious is whether or not your service dealership’s SWOT analysis indicate the
operations have the required resources same? Can you align your repair options to
and competencies to perform additional appeal more strongly to DIM customers?
repair options. If not, is it a capability
that can be easily developed? And is the
capability aligned with what the
marketplace wants and values?

STEP 3.4 Forecast Demand
As a starting point for forecasting customer demand of repair options, first look at your historical performance.
STEP 3
A sample repair history appears below which identifies events using work order history and uses OLGA (Opportunity
Design Lead Generation Analyzer) to calculate the total opportunity.
Repair
Options
Offerings In this scenario, the dealer appears to reach their capacity to perform rebuilds sometime around May and begins to
offer full replacement with a Reman replacement to offset some of the customer demand. A sizeable portion of their
repairs throughout the year consists of unplanned work or irregular repairs which have been classified as “Patch Job.”
CURRENT REPAIR EVENTS Patch Job

Reman Replacement
Dealer Rebuild
Total Repair Events
Dealer Repairs w/o Changes
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

STEP 3.4 Forecast Demand (continued)
As a result of their market analysis, the dealer makes the decision to ramp up their exchange program,
STEP 3
leading to several benefits, including:
Design
Repair • Allows their service operation to balance workloads during the decreased seasonal demand in the 4th and 1st quarters.
Options (Shown in gray in the chart below.)
Offerings
• Enables them to offer a “new” repair option to customers during the 2nd and parts of the 3rd quarter, one with a
faster turnaround that will command a premium. (Noted in light green.)
• Makes the dealership less dependent on using full Reman components. Note that the dealer still plans to offset some
demand with Reman replacement during the end of the busy 3rd quarter. (Noted in orange.)
Dealer Exchange Build

Patch Job
Rebearing/Reseal
Rebearing/Reseal PLUS
FUTURE REPAIR EVENT DEMAND Reman Replacement
Dealer Exhange Delivery
Dealer Rebuild
Total Repair Events

STEP 3.4 Forecast Demand (continued)
The dealership’s market analysis also confirmed that customers are looking for reliable, lower-level repairs.
STEP 3
As a result, the dealer plans to offer customers a rebearing/reseal repair, as well as a “Rebearing/Reseal-Plus” option.
Design Doing so will impact the dealer in the following ways:
Repair
Options • Replaces some of the “Patch Job” work, which is desirable as the irregular/unplanned work reduces safety and velocity
Offerings and increases cost.
• Increases overall market share as customers begin to approach their Cat dealer for these types of repairs currently.
(Requires a focused sales and marketing promotion strategy.)
• Provides customers with an additional option that they can compare to a competitive offering.
Tools to Help Forecast Demand
Dealer Exchange Build
Dealers already use many different methods and Patch Job
tools to forecast component repair demand. Ideally, Rebearing/Reseal
your dealership’s component repair forecast should be Rebearing/Reseal PLUS
updated semi-annually allowing you to adjust and FUTURE REPAIR EVENT DEMAND Reman Replacement
Dealer Exhange Delivery
fine-tune your capacity planning. Tools used to plan
Dealer Rebuild
for component rebuild demand include: Total Repair Events
• Major Component Strategy System (MCSS)
• Planned Component Repairs (PCR)
• Opportunity Lead Generation Analyzer (OLGA)

STEP 3.5 Concentrate on Lowering Customers’ Costs
There’s no argument that through the years Caterpillar and Cat dealerships have paid a lot of attention to owning and
STEP 3
operating costs. We’ve developed and evolved our engines and our parts and our services to lower owning and operating
Design (O&O) costs. We’ve created tools to help dealerships track and report operating costs. Our list of the things we’ve done
Repair
Options to lower customer O&O costs could go on and on.
Offerings
In the past, we typically just talked O&O costs with customers at a fairly high level, without digging into much detail.
Within the last few years, with the full power of data at our disposal, we are now able to dig into the details—to be true
consultants to our customers—consultants who can share specific data about an individual customer’s O&O costs.
Stay Focused on Reducing Your Customers’ O&O

Understand the “big picture” of O&O and the impact of repairs on the
customers’ bottom line.

Identify customer needs and articulate the Cat value proposition.
ustomize repair option recommendations based on each customer’s
C
purchase driver(s).

Consult with customers to control and/or reduce O&O costs by
extending component life, reducing unscheduled repairs,
extending service intervals, reducing operating risk, etc.

Make preventive maintenance recommendations to customers
within the scope of overall O&O cost containment.

Schedule and make recommendations based on routine and in-depth
engine inspections.

Act as a consultant by conducting various analyses for customers.
elay Solutions/Advantages/Benefits to customers clearly and concisely
R
in a manner customized for each customer segment’s unique needs.

Develop a repair options plan for a customer within the framework
of larger scope solutions, such as CSAs.

STEP 3.5 Concentrate on Lowering Customers’ Costs (continued)
As described earlier, customers want to be able to choose from a complete set of parts and repair options, and they want
STEP 3
to be able to compare the price/value of options for their component rebuilds in order to make intelligent choices based
Design on the age of their equipment, application and other factors—all designed to lower their O&O costs.
Repair
Options
Offerings Salvaging and reusing components are certainly a factor in lowering customers’ costs.
Here are two ways to help your dealership focus on this important aspect:
First, your organization must commit to an extensive investment in machine-shop capabilities and
1 expertise in order to enable salvage of numerous parts. This means having a full ensemble of machine
tools (lathes, mills, metal spray, etc.) and competent machinists.
Second, service personnel must be motivated. Supervisors and technicians should exhibit the drive
2 to help lower customers’ costs with in-house rebuild options—instead of outsourcing component
rebuilds or relying solely on new or Cat Reman solutions.

STEP 4 BUILD REPAIR OPTIONS OFFERINGS

STEP 4.0 Build Repair Options Offering
After you have decided what repair options to offer, you will have to document these repair options so that you can
STEP 4
properly market, quote, sell and execute them within your dealership. An important factor in this step is to document
Build your repair options offerings so that everyone involved has a common understanding of the offering. Your sales staff
Repair
Options needs to know what they are selling. Your customers need to know what they are buying and the Service Department
Offerings needs to know what was sold to the customer.
The process that you use to build the repair option offerings will vary based on your dealership’s internal processes and
business system. Some typical deliverables are standard jobs and spec sheets. Standard jobs are used to define how
the work should be performed, and spec sheets help you market and sell the repair options to your customers.

4.1 Create Repair Options
4.2 Build Standard Jobs to support the Repair Options
4.3
Adjust Inventory Levels
4.4 Develop a Sales Aid for the Customer

STEP 4.1 Create Repair Options
Depending on the product population in your territory, Once this set of options is established, you will want
STEP 4
you may choose to build comprehensive repair options to train your staff to use it. Their goal should be to
Build for the entire machine for certain product models. develop and submit each quote within 24 hours to
Repair
Options In contrast, you may choose to build repair options only ensure customer satisfaction.
Offerings for certain major components on some product models
due to lower populations in your territory. As your dealership continues to develop your repair
options program, you should be working toward
By developing a complete set of repair options, you will developing options for all key models and major/minor
enable your staff to develop quotes more quickly. Be sure components. All repair options should be well defined,
to specify a description of each option (what is included, so that various repair options are distinguishable and
what is excluded), as well as the option’s price and meet customer requirements. Refer to Step 2: Conduct
timeframe for repair. Market Analysis to determine what new repair options
are in demand for your specific customer needs.

STEP 4.2 Build Standard Jobs to Support the Repair Options
You should build standard jobs to support each repair You will likely need to adjust labor hours and parts lists
STEP 4
option that you create. A standard job is a tactical, based on the unique aspects of your dealership and the
Build operational process to complete repetitive maintenance product applications in your territory. You also need to
Repair
Options and repair tasks. The standard jobs can be used in service review service intervals and parts replacement percentages.
Offerings operations to provide guidelines to support quoting, flat rate
repair options and Customer Support Agreements (CSAs). Some of the BUILDER files for Mining can be accessed
online on DealerConnect.cat.com, and the Expanded
The Caterpillar Repair Data Development team provides Mining Products (EMP) BUILDER files are also available
baseline BUILDER files during the New Product Introduction on DealerConnect.cat.com. You’ll want to start by
Best Practice process to assist you with the creation of repair options accessing SMI, and then click through to traditional
and standard jobs. You can access these files on SIS by and EMP files. Once created, the BUILDER files can
Use G3 BUILDER to author your standard jobs. clicking the “Repair Option BUILDER Data” link. These files be used to price your repair options and can also serve
Please see Dealer.cat.com/ServiceOperations are great starting points. as the foundation for the creation of your customer-facing
for more information. repair option descriptions. In doing so, you can accurately
represent the repair, as well at its inclusions and exclusions.

STEP 4.2 Build Standard Jobs to Support the Repair Options (continued)
When it comes to pricing, you can use BUILDER software to establish your own prices—and then perform competitive
STEP 4
research to determine how your prices compare to other offerings.
Build
Repair
Options BUILDER is much faster than using a manual process. The essential elements for pricing calculations are parts
Offerings listings with replacement percentages and labor hour estimates for the repair. These elements can be priced initially
at your normal selling rates. It will be necessary to pull several representative work orders to determine your parts lists
and average labor hours. The BUILDER software will contain models already completed with suggested replacement
percentages and labor hours. This information should be adjusted to reflect your actual dealership’s history.
Again, once a price has been established, it should be compared with competitive offerings in your territory to
determine if it represents good value to the customer. Be sure to identify exactly what the competitive product
includes (degree of repair, paint, dyno-test, etc.) to ensure a valid comparison is made.

STEP 4.3 Adjust Inventory Levels
The parts and service departments will need to work collaboratively to create a parts stocking plan aligned
STEP 4
with your new repair options strategy. Place a special focus on those parts being replaced at a less than
Build 100% level in your defined repair options. The parts with replacement percentages less than 100% will not
Repair
Options typically be ordered at the beginning of the repair. Instead, they will often be ordered later in the repair
Offerings as you inspect individual components and determine their reusability level (if any). Additionally, you will need
to analyze the historical demand of these parts, and determine if that demand was derived from
over-the-counter orders or service shop orders.
Together, your parts and service departments can help determine if your new repair options offerings
will increase future demand on these parts. In the early stages—before you are able to establish your parts
demand based on actual usage—you may want to force minimum and maximum parts inventory thresholds
into the parts system.

STEP 4.4 Develop a Sales Aid for the Customer
Use spec sheets to present the repair option to the customer. You have the option to use the editable versions provided
STEP 4
by Caterpillar. Or you can elect to prepare your own spec sheet template. Regardless of your approach, there are several
Build common elements that should be represented on every spec sheet.
Repair
Options
Offerings
Spec Sheet Checklist

The major component and the repair option title
The primary benefits of the repair
P arts included in the repair
P arts that will be tested or inspected during the repair
S ervices that will be performed during the repair
A list of recommended add-on that can be included in the repair
A list of Inspect and Advise components that could be included after the inspection
A list of exclusions
Typically, a corresponding standard job

would be developed to support the spec sheet.

STEP 4.4 Develop a Sales Aid for the Customer (continued)
STEP 4 Spec Sheets Examples

Build Spec sheets can be found online at Dealer.cat.com/
Repair RepairOptions. Each spec sheet is editable, so that you
Options can make changes to the content to meet the needs of
Offerings
your dealership. Each one can be customized with your
dealership’s logo and contact information.

STEP 5
Build
Dealer
Capability
STEP 5 BUILD DEALER CAPABILITY

STEP 5.0 Build Dealer Capability
The following section discusses core activities that need to be implemented to ensure your dealership is prepared to
STEP 5
offer and deliver additional repair options. As you review this section, you’ll see that many of these activities could
Build and should be executed concurrently with Step 3: Design and Step 4: Build Repair Options Offerings. Additionally, you
Dealer might find that your dealership already has much more robust processes in place relative to the ones outlined in
Capability this section. That’s great. The point is to be certain your dealership has flexible, robust processes in place to handle
additional repair options.

5.1 Prepare Operations Staff
5.2 Prepare Customer-Facing Staff
5.3
Prepare Support Staff
5.4 Track Major Components
5.5 Link Repair Quotes to Work Orders
5.6 Update Repair Option Offerings
5.7 Execute Reuse and Salvage Guidelines Consistently

STEP 5.0 Build Dealer Capability (continued)
STEP 5
Build
Top 10 Implementation Best Practices from Carter Machinery
Dealer
Capability
Advice from a dealership that has a successful repair options program!
1. Engage Caterpillar expertise early, during the feasibility phase, as this can accelerate a
dealer’s formulation of their direction. Discussion should include defining the scope of
a Component Rebuild Center (CRC), location, volumes, workload management,
manpower requirements, marketing and repair options offering.
2. Conduct surveys to understand customer needs and price points.
3. Use BUILDER software as a starting point to build your own repair option pricing
and consist development.
4. Invest in rebuild shop facilities.
5. Develop expert personnel (technicians, supervisors, managers).
6. Invest in machine shop equipment for salvaging piece parts to reduce customer repair costs.
7. Invest in Exchange component inventory and used parts inventory.
8. Utilize Caterpillar Service Operations resources for facility design and
shop operations consulting.
9. Partner with Caterpillar on parts reuse training and service tooling consulting.
10. Tap into Global Mining staff resources for mining customers or mining CRC certification.

STEP 5.1 Prepare Operations Staff
In order to have a successful repair options program, your dealership must have committed resources to respond
STEP 5
to customers’ repair needs. This “in-place” capacity is essential for providing rapid rebuild turnaround service.
Build Recent discussions with best practice dealers indicate that as high as 25% to 35% of their dealership’s service
Dealer technicians are dedicated to a Component Rebuild Center (CRC) or a repair specialization shop.
Capability
Dealers building a repair options program need to Finally, dealers need to focus on the retention of the
ensure service operations staff have the skills and technicians who possess the appropriate salvage,
knowledge necessary to provide the required technical repair and rebuild skills, and the ongoing development
expertise. Also, the recruitment and development of these needed skills.
strategies currently in place at your dealership may
need to be enhanced to meet the growing needs of Technician Career Development Program
your repair options program.
To support your technician training efforts, Caterpillar
created the Technician Career Development Program
(TCDP) as a tool for dealers to develop their technical
Keep Your Technician Recruitment workforce and for service technicians to chart their
and Training Program Up-to-Date own career path.
TCDP is a strategic and systematic approach to
Create or update the following as part of managing and developing technicians based on a
your repair options implementation: framework of skills, knowledge and abilities for training
• Technician career paths service technicians. It offers a customized approach to
training that matches the training needs of the technician
• Job descriptions and the dealer service operation, and targets the skills
• Individual learning plans and knowledge needed for the service technician to
efficiently perform the job. Besides developing technical
• Dealer learning plans
skills, this focused approach to training improves a
• Change management/communication plan technician’s job performance, opportunities for
• Learning management system advancement, and maximizes a dealer’s return on
training investment.
• Key Performance Indicators (KPIs)
More resources are available regarding service
• Training materials training at Dealer.cat.com.
• Certifications
• Recruiting

STEP 5.1 Prepare Operations Staff (continued)
Selecting and Training Additional Key Personnel for Technical Analysis/Inspection Roles
STEP 5
Build
Dealer
Capability
Selecting and Training Additional Key Personnel
for Technical Analysis/Inspection Roles
Appoint a coordinator to be responsible for the inspection program. Since several departments are
involved with the Technical Analysis program (i.e., Product Support Department is responsible for
merchandising, Service Department for technical inspections, etc.), there is a critical need for
coordination among inspectors, PSSRs and customers. This need necessitates the appointment of a
program coordinator. This could be the Service Manager, Technical Communicator, or some other
INSPECTION responsible and technically knowledgeable person at your dealership.
PROGRAM
COORDINATOR The coordinator should ensure that the Parts and Service Departments are aware of the
continual need to market and follow up on inspections, and that customers receive an inspection
report. He/She should also be responsible for making meaningful repair recommendations needed
to maintain a performance standard.
A clerk will probably be needed to enter data and complete reports that result from the inspection program.
The clerk could also establish a system and process for notifying customers of upcoming inspections.
CLERK He/She would also review invoices and handle other related activities. A capable person should be chosen
for this position, since he/she will also serve as coordinator in the coordinator’s absence.

STEP 5.1 Prepare Operations Staff (continued)
Selecting and Training Additional Key Personnel for Technical Analysis/Inspection Roles
STEP 5
Build
Dealer
Capability
Selecting and Training Additional Key Personnel
for Technical Analysis/Inspection Roles (continued)
Inspectors must also be selected for your Technical Analysis inspection program. The number of
inspectors selected will depend on several things, such as average time necessary to perform each
stage of an inspection, equipment population, product mix and density in your territory, anticipated
inspector travel time, etc. When choosing inspectors, you may wish to consider experienced field
servicemen looking for lighter work, more predictable schedules, and development for management
positions (i.e., selling techniques, customer contact, etc.). You also could consider experienced shop
servicemen being groomed for the field, so they can develop customer rapport and help relieve the
field service workload.
Another alternative that would enable you to quickly develop your inspection force would be to select
service people with less experience. These people could perform in-shop inspections at first, and
establish the need for further diagnostic follow-up by the service manager or another experienced
INSPECTOR serviceman. In the field, less experienced technicians should at least be able to perform Level 1
inspections on all machine models and Level 2 inspections for most models.
Technical Analysis Inspector performance can be measured according to the following standards.
The inspector should be able to:
• determine the condition of equipment systems and record findings

• perform required diagnostic checks using proper tools
• .recognize parts and service opportunities after inspection and sell additional service work if required
• recognize product sale opportunities and report to other interested departments
• complete inspection in time allowed
• maintain accurate schedule

STEP 5.2 Prepare Customer-Facing Staff
Training is an important component of a high-quality Part of this involves teaching employees to overcome
STEP 5
repair options program. Essentially, you want to ensure customer objections. For example, customers may
Build that the value of repair options is integrated into raise objections about quality, price/value, wanting
Dealer training for customer-facing employees: Product their core back, availability, etc. Once an objection is
Capability Support Sales Representatives (PSSRs), Inside Sales identified, specific actions can be implemented to
Representatives (ISRs) and parts counter personnel. overcome the objection, demonstrate value and build
Essentially, these employees should be trained to trust with the customer.
promote the value of Repair Before Failure and repair
options, and to communicate how those options can
lower customers’ owning and operating costs.
Transitioning to a new or improved repair options program will

require a change in the way your customer-facing employees operate.
They will have new responsibilities and will need to adopt new
tactics and tools.

STEP 5.2 Prepare Customer-Facing Staff (continued)
STEP 5 Caterpillar Training

Build In order to support dealers with their repair options
Dealer training efforts, Caterpillar developed an instructor-led
Capability training course for PSSRs (DPC #40709). Additionally,
we have created a Repair Options Sales & Marketing
Execution Guide packed with “how to” guidance SALES & MARKETING
EXECUTION GUIDE
for understanding customer expectations, as well
Internal only: sales and marketing tools to
as best practices for discussing and recommending communicate the value of repair options.
repair options.
GET STARTED
Dealer Training
As many dealers already do, supplement the
training provided by Caterpillar with your own
training tactics—such as classes, webinars,
flyers and e-blasts—to prepare and motivate your
employees to sell repair options. Also, be sure
to share important documentation related to
repair options, including this Guidebook.
Field Service Techs –

They’re Facing the Customer Too!
Your field service technicians should be trained and
kept informed with regard to your repair options
program. In some instances they will be performing
repairs. In other cases customers may ask them
about your dealership’s repair options. In either case,
they are in a good position to influence customers
and, therefore, need to have a full understanding of
the program.

STEP 5.3 Prepare Support Staff
STEP 5 Your dealership’s Repair Options Coordinator and Standard Job Coordinator (referenced in Section 1.4) will need help.
If they are truly “coordinating” the development of repair options and standard jobs, they will almost certainly need staff to
Build do the actual development. Additionally, especially early in repair option development, a lot of communication will need
Dealer to occur between customer-facing staff, service operations and the developers. Coordinating this communication may re-
Capability
quire administrative support as well.
Lastly, it may not be necessary to add resources to perform all of these functions immediately, but don’t stunt
(or prematurely cripple) your program by overwhelming your coordinators without providing support.
Support Roles to Consider

• Document the elements of each repair option (price, description of work)
Repair Options Developer • Produce sales aids (e.g., spec sheets for repair options)
• Update repair options as needed
• Build standard work orders for the defined repair options

Standard Jobs Developer • Liaise with Service Operations to ensure that the Standard Jobs
continue to effectively represent the actual repair work
• Track overall work orders to support variance monitoring

• Establish a single-point-of-contact to connect customer-facing staff
Repair Options Administrator with appropriate service operations staff
• Offer general communications and administrative support
• Provide system support for Repair Options/Standard Jobs databases

• Consider custom tool development for enhancing productivity of other staff
Repair Options IT (including customer-facing and service operations)
• Manage integration with vendor-provided software solutions

STEP 5.4 Track Major Components
STEP 5
Major components are a large profit opportunity for Existing Tools
dealers and Caterpillar. Developing a process that tracks
Build major component lifecycles is a high-return investment. Regardless of the process your dealership uses, a critical
Dealer requirement will be to keep the information current.
Capability This type of system has many benefits:
• Customer-facing staff can better identify Global Mining has a Major Component Tracking System
Repair Before Failure opportunities (MCTS) that dealers can utilize. Most dealers have specific
• Inventory is restocked as major components are used Enterprise Resource Planning (ERP) systems that assist in
managing inventory. Some are integrated with DBS systems.
• Future demand is better forecasted, leading to
better customer service
Parts Selection e-List (PSeL) assists dealers in making
• Dealer Exchange or Reman major components parts stocking decisions for Cat products. This PC application
are identified when appropriate is locally installed and can link to the dealer’s business
system. It assists in establishing dealer branch inventory
levels and is used as a sales tool to demonstrate parts
support. PSeL integrates with SIS Web, BUILDER and DBS
to import/export parts information and obtain parts attribute
information for customized reporting through Excel.

STEP 5.5 Link Repair Quotes to Work Orders
STEP 5 Information Technology If your dealership currently is using a manual system for
opening work orders, work on replacing that system with
A good repair option process involves many enterprise
Build an automated Enterprise Resource Planning (ERP) process.
Dealer resources in order to meet customer needs. One
Several 3rd-party solutions are available.
Capability essential resource is an adequate Information
Technology (IT) system that integrates and interfaces
In addition to linking approved repair quotes and work
with all aspects of repair options to ensure optimum
orders, a good CRM process will extend upstream and
effectiveness and efficiency.
downstream from this linkage. Downstream processes
enable the tracking of standard jobs through opening,
Dealers with successful repair options programs have
scheduling, conducting and closing. Upstream processes
implemented processes that automatically trigger the
include capturing all sales calls and customer results—
opening of work orders for customer-approved repairs.
information that can be used to modify standard jobs on
a regular basis.
This provides many benefits:
• Less miscommunication between customer-facing
staff and service operations staff
Most dealers with successful
• Repetitive creation of similar work orders is
automated for reduced cycle time.
repair options programs have an
• Variance monitoring is easier, as each repair
ERP system that integrates repair
option is linked to the work order options quoting, Repair Option
BUILDER, standard jobs,
work orders and invoicing.

STEP 5.6 Update Repair Option Offerings
STEP 5 Repair Option Elements Overall Repair Option Development

Repair Option information needs to stay up to date in All of your dealership’s repair options should be evaluated
Build
Dealer order to provide customers accurate quotes. Your periodically and updated as needed (including the
Capability dealership will need a process to update the various correlating Standard Jobs). The most straightforward
elements of your repair options, including part numbers approach would be to periodically return to your original
and pricing. Cat piece part prices are updated every six market analysis (Step 2: Conduct Market Analysis) and
months. Changes in part numbers occur periodically and identify if new models need to be added or if your existing
are communicated to dealers. Your dealership labor rates product coverage is adequate.
also change based on market demand.
After identifying what products need attention, proceed into
Overall, your process should ensure that these changes the Repair Option development (Step 3: Develop Offerings)
are identified and updated within your correlating and continue through the development process.
Standard Jobs. Ideally, these updates are made
seamlessly through linkages between your IT systems. The following should be taken into consideration as
you develop a schedule for updating repair options:
• Cat Reman consistently releases new parts.
Service Staff • Parts and labor specifics change over time.
•R
epair options need to be updated as new products
are introduced.
Office Staff • T he variance between the actual repair option price
and the cost to deliver the repair needs to be monitored
and adjusted as needed.
KEEP IN MIND:
This process does not address clear, obvious
disconnects between repair option pricing and delivery
costs. Discrepancies that are identified during the
delivery of the repair option should be addressed
immediately with the Repair Option Coordinator.
There is no reason to wait for the periodic review
process when an obvious issue is present.

STEP 5.7 Execute Reuse and Salvage Guidelines Consistently
One essential element required to consistently deliver repair options profitably is to consistently execute the
STEP 5
documented Reuse and Salvage guidelines for components. It is quite common for service operations staff to
Build deviate from the identified guidelines in an attempt to reduce the risk of future component failure. When delivering
Dealer a repair, however, failure to adhere to the documented guidelines will have immediate, negative impacts on the
Capability profitability of the program.
Another negative consequence of deviating from the guidelines is that it can waste some of the quality built into
Genuine Cat Parts. Detailed information is available in “Guidelines for Reusable Parts and Salvage Operations”
(SEBF8029-13), but the core elements of consistent execution of reuse and salvage guidelines are listed below.

STEP 5.7 Execute Reuse and Salvage Guidelines Consistently (continued)
All reusability guidelines are available in SIS Web and all service operations staff should take time to become
STEP 5
familiar with how to use them. The documents are being updated regularly to keep up with engineering changes
Build and new technology.
Dealer
Capability
MANAGEMENT
! TRAINING ! TRACKING
SUPPORT
• All reusability guidelines are • One way to reduce the risk to • Probably the most critical
available in SIS Web and all your service operations staff and element of executing salvage
dealer service operations staff your dealership related to salvage and reuse consistently centers
should take the time to become and reuse is detailed tracking. on dealer leadership.
familiar with how to use them.
• Some dealers have developed • The service operations staff
• The documents are updated inspection procedures for needs to be able to trust that
regularly to coincide with specific high-volume piece parts their leaders will back them up
engineering changes and to ensure that guidelines have when they have followed the
new technology. been followed. guidelines faithfully and a
quality issue occurs.
• Dealer Service Training is • In lieu of losing money on a
in-development and there is repair, it is best to spend time • No technician will ever reuse
also a course in Dealer now setting up salvage and a part again if they are held
Performance Center (#41658). reuse process. accountable for a failure in
reused component that passed
• More information is also
the guidelines. Obviously good
available at Dealer.cat.com/
tracking is required to make
ComponentRepair.
that determination.

STEP 6 SELL REPAIR OPTIONS
Quickfinder | Glossary | Resources Repair Options Guidebook n Page 83

STEP 6.0 Sell Repair Options
Your dealership’s Product Support Sales Representatives (PSSRs), Inside Sales Representatives (ISRs) and parts
STEP 6
counter personnel will serve as your front-line team for selling repair options. Their ability to explain, compare
and contrast available options will be a key to sales success. In addition, many customers will need to be convinced
Sell Repair (or reminded) of the advantages of the Repair Before Failure (RBF) philosophy, which is an important element
Options
of any repair options program.
You will want to work on perfecting your front-line team’s knowledge, sales techniques and support.
This section breaks the process into three action steps.

6.1 Target Customers
6.2 Promote Repair Option Offering
6.3 Guide Customer to Select a Repair

STEP 6.0 Sell Repair Options (continued)
STEP 6
Sell Repair
Options
Help Customer Reduce Costs by

Repairing Before Failure…
and Realize Other Benefits as Well
Repairing a component before it fails allows
customers to achieve the following:
1. Reduced operating costs—Before failure repairs
are up to 60% less costly. More parts can be reused, A Cat Engine failed after 15,206 hours. The total rebuild cost was
collateral damage to adjacent parts is reduced and 41% higher than if the engine had been scheduled for a before failure
labor is typically decreased.
rebuild. In general, after factoring in the cost of a replacement machine
2. Reduced downtime—Because parts and labor and the additional downtime of the after failure rebuild, total after
resources are planned, components often can be
reconditioned up to 70% faster before failure. failure repair costs are typically more than double the rebuild cost.
3. Increased efficiency through planning—
Customers can schedule downtime and budget for
repairs because the price is known in advance.
4. Greater flexibility—Repairing before failure

enables customers to choose from a greater
number of repair options (running a component
to destruction prevents a customer from using
cheaper repairs).

STEP 6.1 Target Customers
In order to gain incremental repair options business, you will want to target specific customers. Depending on the repair
STEP 6
options you have chosen to offer, you may need to identify multiple segments of customers to target. In the example found
in the Step 3: Design Repair Options section, the dealer chose to develop an Exchange program and offer a set of rebearing
Sell Repair
Options and reseal options.
Of course these two options will not appeal to all customers. That’s why you will need to take a customized approach for
targeting customers. For example, your dealership might elect to pursue a general high-lost opportunity strategy focused
on customers that have high engine, drive train or hydraulic component opportunity, but low POPS and service DCAL.
Overall, the purpose of developing a customer-targeting strategy is to bring focus to business you don’t have today—
which provides the greatest opportunity to meet more customers’ needs.
Critical Elements of Customer Segmentation:
Consider the impact of Repairing Before Failure (RBF) on this segment. Will a typical customer
need education and consultation on the advantages of RBF? Do you have tools in place to help tell
the RBF story in a clear and compelling manner?
Targeting customers who qualify
for repair options will help

Update your customer list. Is your current population and customer list accurate? Has it been
kept current? Are there large portions of customers (second/third owners) that are missing?
accelerate your dealership’s parts
Use all available tools. Are you using the most current tools, including OLGA, which can help
and service growth. you identify high opportunity targets.

Align your sales team for success. Which members of the customer-facing staff are going
to be talking to the targeted customers? How will you avoid double-covering? For example,
you might instruct your PSSRs to focus on the Dealer Exchange solutions, while ISRs focus
on rebearing/reseal options.

STEP 6.2 Promote Repair Options Offering
Promoting repair options gives you an opportunity to merchandise both parts and service sales. This section covers what
STEP 6
to promote and how to take advantage of existing materials, and provides thought-starters for promotions and sales aids.
Sell Repair
Options What to Promote: Differentiate Your Service
Repeated Voice of Customer (VOC) input from multiple credible sources has revealed that customers have three regular
expectations from the Caterpillar extended enterprise: a broad range of parts and repair options, expert advice on repairs
and a timely quote/repair process.
BROAD range of options Teach Personnel How

to Position Options
Having a broad range of options is important to customers
for several reasons. The first is that every customer’s needs We spoke with an ISR at one of our best practice
change over time—the customer’s purchase drivers (price dealers, and discovered that his approach was to
sensitivity, utilization, time-flexibility) that dictate which offer at least three options. He stated the following:
repairs to offer may be different from one day to another. “The first option is to just get it running, what I’ll refer
Another reason is that our customers are not all the same, to as a ‘patch job.’ The second option is to reuse as
and the customers that we’re not currently reaching have many parts of the existing component as possible,
even more variation in their purchase drivers. but providing a legitimate repair. The third option is
the ‘worst case,’ which is using an Exchange
Having one or even two repair options may meet the component.” (Note that in this situation, which is
traditional customers’ needs. However, if we want to reach common with the customers that we are not currently
more customers or get more of our traditional customers’ reaching, full replacement (including a potential
parts business, we need to offer the fullest range available. Cat Reman replacement) is not an option the ISR
offered to the customer.)

STEP 6.2 Promote Repair Options Offering (continued)
STEP 6 EXPERT advice & repair

Sell Repair The Caterpillar extended enterprise is not the only source of information our customers have. Most of our
Options customers have relationships with other credible service and parts providers. Nearly all of them also have some
contact with will-fit parts suppliers and smaller job shops and “shade-tree” operations as well. An excellent
way to differentiate from all of these competitors, one which our customers value, is being the expert on keeping
equipment running. Certainly for our traditional customers this could include a focus on lowest owning and
operating (O&O) costs.
For the customers that we are not currently reaching, low O&O may still be relevant. However, another critical
element of offering expert advice requires gathering purchase drivers about the customer. A senior PSSR at one
of our best practice dealers summarized it this way: “It’s always ‘knowing the customer.’ How much money
does he have? What are the competitors doing?”
Another rep (at the same dealer) says: “I get as much information as possible before I talk to the specialists.”
This brings up another critical detail regarding expert advice: The technicians performing the repairs should
frequently be included in discussions before repairs are selected. Our competitors do not have the experience
that we have repairing our products, and our customers want/need to be reminded of this difference regularly.

STEP 6 TIMELY quote & repair

Sell Repair Our VOC research tells us that customers will seek out three repair options and expect a quote within 24 hours.
Options Therefore, make sure your dealership improves its quote velocity to enable this quick turnaround. Also work on
improving the timeliness of repairs and the delivery of information regarding status. And then be sure to promote
all of these advantages to your customers.

STEP 6 Take Advantage of Existing Materials

The two most effective resources for developing promotional materials are Dealer.cat.com and the Caterpillar
Sell Repair Media Information Center (CMIC). CMIC provides access to advertisements, bulletins, marketing kits and many
Options other media useful for promoting repair options. Searches can be refined to focus on product support and
specific industries.
You can customize some of this media to focus on specific customers or a specific industry to ensure that the value
messages are appealing and appropriate. For example, you might offer a free Technical Analysis inspection when
combined with a repair, or perhaps offer a special machine rental rate.
Simplify promotion by using Caterpillar-provided materials—such as the ones shown here.

STEP 6
THOUGHT-STARTERS FOR Develop Your Own Formula
Sell Repair PROMOTING AND SELLING YOUR for Marketing and Selling
Options REPAIR OPTIONS PROGRAM
That’s the advice given by Carter Machinery
se spec sheets (which define repair options)
U
When Tommy Carter, Carter Machinery’s
to discuss repair options with customers.
Each of these can include the type of repair option, Reconditioning Center Manager, discusses repair
what is included, what is excluded and how a options with customers, he does not delve into the
component qualifies. details of repair techniques. Instead, he focuses on
the dealership’s repair expertise. “Most of what we
onduct “Cat Care” meetings and branch open
C promote here would be our technicians,” he says.
houses to promote repair options. These meetings “Here in Recon, we’re very proud of our employees.
can be used to illustrate and discuss the We always try to bring our customers in to do tours
advantages of RBF and to introduce new and we are proud that every other guy we point to
repair options. has 20-plus years of tenure. And in our assembly area,
most of our employees average 20 years. And so that
ombine targeted email promotion with team selling
C right there goes a long way.”
to spread the word of machine inspection benefits.
(One of our best practice dealers has used this
However, one of Tommy’s associates—Jim Fusco,
approach in the past, with great results.)
Parts and Service Manager for the dealership’s mining
reate a PSSR/ISR Incentive Contest to promote
C division—points out that while this approach works
parts and service work. for Carter Machinery, a different approach might work
better for another Cat dealer: “We’ve been in this
ffer out-of-channel customers a discount on
O [repair] business so long that it’s common knowledge
components that meet RBF conditions to win them among our customers. So we may not have the same
back to your dealership. marketing needs, the same advertising and promotional
needs, as a dealer that’s never really been in the
romote RBF service online, via your website and
P business, but wants to get into it and wants to grow
social media tactics. that business.”
evelop an e-blast series using Zift to promote

D
RBF and your repair options to your customer list.

STEP 6 Increase Customer Interaction Frame the Impact of Your Recommendation

Consider how often your parts and service personnel Demonstrate how it meets specific customer needs:
Sell Repair meet with key customers to discuss RBF. Do they do
Options • Ownership
this on a regular basis to better understand how they
can work with customers to lower their owning and • Utilization
operating costs by utilizing RBF rebuilds? If you determine • Turnaround Time
that more interaction is needed, then develop a plan to
• Affordability
make that happen. Meeting with customers individually
Why Customer Interaction Matters or as a group in a Cat Care Meeting is a very efficient
Describe the impact on their machine, job or business:
and effective way to help them understand RBF and the
benefits of dealer rebuilds and Cat Reman options. • More economic value or savings
Advice from a dealership that has a
successful repair options program • Less lost production or downtime
“Expense is important to customers, and uptime is • Extended life of machine or component

important. But interaction definitely adds value,” For the best results,
Maintaining long-term relationships with your customers:
states Tommy Carter, Reconditioning Center Manager actively manage the targeting,
at Carter Machinery. “A lot of times, what we really • Selling repairs is part of a larger relationship
promote is that when a component fails, we can tell timing and content of
• Credibility accumulates
the customer exactly what happened. And, more promotional messages.
important, we can show how to prevent that from • Commitment, satisfaction, loyalty
happening more in the future.”
Tommy says Carter Machinery has an effective tool
that facilitates this type of customer interaction:
“One of the things that we do with all our components

in our Recon Center is a failure analysis,”
Tommy says. “So through that report (and often
times it’s a multi-page report) we are able to give
feedback both to the store and the PSSR. And they
will use their discretion to provide feedback to the
customer as well. When we do see a problematic
pattern start, this allows us to get in front of it more
quickly, hopefully to avoid any repercussions.”

STEP 6.3 Guide Customer to Select a Repair
STEP 6 Here are some tips for making sure your repair determination process is efficient and functional:
Sell Repair DEVELOP CLEAR, ESTABLISHED GUIDELINES for repair determination,

Options
1 so that service representatives and technicians can quickly and accurately determine potential
repair options that meet customer needs.
USE A SELECTOR TOOL TO HELP CUSTOMERS see which options are available.
I deally, 35% to 50% of the key
2 Many dealers already have functionality like this available in their CRM tools. Be sure yours is
populated with your repair options promotion material and spec sheets.
service manager’s time should
be involved in communicating INVOLVE YOUR SERVICE MANAGER (or service team) in point-of-sale communication.
with customers or PSSRs. 3 Even an experienced PSSR may not have the deep repair process experience needed to satisfy a customer’s
needs for information when making a difficult decision. Consider involving a service manager to support
the PSSR. This support should include expertise (e.g., salvaging capabilities, rebuild cost history, etc.)
that will help the PSSR choose, communicate and sell repair options to customers.
Remember, the overall goal is meet more customers’ needs. Regardless of the training, tools and experience your team has,
occasionally a customer will select a repair against our recommendations. This is always challenging because it opens us all
up to the risk of a failure that the customer will expect us to fix.
A balance will need to be struck between “working with the customer where he’s at” and managing risk. The important
point to remember in these situations is that the customer has other options outside of Caterpillar (he or she frequently
gets three quotes before choosing a provider). Even if you are ultimately unable to make the deal that day, consider it
progress that you were able to engage the customer in a dialogue, exhibit your repair expertise and place your dealership
in a position to possibly meet the customer’s needs in the future.

STEP 7
Execute
STEP 7 EXECUTE

STEP 7.0 Execute
After the sale, the repair options process moves into the Execution phase where your goal
STEP 7
will be to deliver the repair to the customer while providing expert advice along the way.
Execute
7.1 Ensure Understanding of What Was Sold to the Customer
7.2 Schedule the Work
7.3
Open Work Order
7.4 Order Parts
7.5 Complete the Repair

STEP 7.1 Ensure Understanding of What Was Sold to the Customer
STEP 7 Pay special attention to what was sold to the customer during the sales process. The sales staff will be using the
Repair Options Framework and the key purchase drivers to guide the customer through the repair selection process.
The key purchase drivers used in the decision process should be relayed to the Service Department to ensure
Execute customer satisfaction.
SOME KEY POINTS

TO CONSIDER
What is included in the repair?
What is excluded from the repair?
Were there any extras included in the repair?
What was the key purchase driver used by

the customer to select the repair option?
Was a timeline set?

STEP 7.2 Schedule the Work
STEP 7 The first phase of delivering the repair to the customer is scheduling the work. This is the planning portion of the job.
You will want to ensure that you have all of the necessary resources available to complete this repair.
Execute
THINGS TO CONSIDER
DURING THE
SCHEDULING PHASE
Who is arranging transportation to the dealership?
Who is performing the remove and install if necessary?

Is there a turnaround time expectation?
Will this repair require a specific technician?
Is there any special tooling required?

STEP 7.3 Open Work Order
If your business system can open the work order directly from the standard job, then this step is relatively
STEP 7
straightforward. If you do not have this functionality in place, engage your IT resources. Not only do standard
jobs assist with the quoting process, but they can also be leveraged to open work orders quickly and with
Execute proper segmentation.
Regardless of the method you use to open your work order, you should segment your work orders by repair
activity. You can optionally create a further breakdown using job operations where desired. This practice
will allow you to analyze your service work better and pinpoint areas for efficiency improvement.

STEP 7.4 Order Parts
STEP 7 In general, you will only want to order the 100%

replacement parts at the beginning of the repair. Aim for these two goals:
You can place additional part orders as you determine
Execute reusability during the repair inspection. There may be
(1) achieving a service level
a certain breakpoint on the replacement percentages delivery for mining customers
where you decide to order the parts in advance. at 90% or higher, and
For example, if you replace a camshaft 80% of the time,
it may be more efficient to order it at the beginning of (2) covering 99% of planned
Best Practice
the repair. major component demand with
If you partnered with the Parts department during Future-Dated Orders (FDO)
The Standard Job coordinator should review the Step 4.3: Adjust Inventory Levels of the repair options and Committed Planned Repair
service report after the repair is completed so that they process, you will have created a plan to stock parts Orders (CPRO).
can update the standard job based on actual repairs with replacement percentages less than 100% for
being performed. This will help your dealership your repair options.
maintain accurate replacement percentages.
Most standard jobs have been built with a General
Bill of Material (GBOM) to assist with quoting jobs
quickly. You will need to use SIS Web to research and
create a list of the actual parts necessary to complete
the repair. In those cases where you have built an actual
Repair Bill of Material (RBOM), parts ordering should go
very quickly. An RBOM is a specific list of required
parts and quantities for the purposes of ordering parts
to execute a repair.

STEP 7.5 Complete the Repair
STEP 7 LEVERAGE REUSE AND SALVAGE GUIDELINES

1 Parts reusability (See Step 5.7) is essential to take full advantage of Genuine Cat Parts quality.
Several reusability guidelines have been published to assist your Service Department. For a listing of the
Execute
Caterpillar reuse guidelines, see “Guidelines for Reusable Parts and Salvage Operations” (SEBF8029-13).
PROVIDE EXPERT ADVICE THROUGHOUT THE REPAIR

2 Provide the customer with key updates during the repair based on your inspection of the parts.
These discussions could possibly lead to additional parts being included in the repair.
Depending on how you quoted the work, there may be additional charges to the original
quoted job based on your expert advice.
TRACK WORK PERFORMED BY SERVICE TECHNICIAN

3 Ensure that you have a process for tracking the work your service technician performs. The document could
be delivered to the customer at the conclusion of the repair. You may want to utilize a checklist process for
each defined repair option. This will help ensure that the repair is completed with a high degree of quality.
It could also be a tangible deliverable to the customer at the conclusion of the repair.
Ensure that you have a process for the service technician to document the service report at the conclusion
of the repair. Be sure to maintain internal information separate from customer-facing information.
MANAGE WORK IN PROCESS

4 Work in Process is the Service Department’s “Inventory” of non-invoiced work. This is a combination of
the cost of repairs still in process and completed repairs which have not been invoiced. It includes labor,
parts and miscellaneous costs. Ensure that your service staff is reporting labor, recording mileage of
field service trucks and travel time throughout the repair.

STEP 8 MEASURE RESULTS AND MAINTAIN PROCESS
Quickfinder | Glossary | Resources | Help Repair Options Guidebook n Page 101

STEP 8.0 Measure Results and Maintain Process
A critical element of your repair options program includes tracking the Key Performance Indicators (KPIs) associated
STEP 8
with the program and making adjustments based on the findings. The results and performance metrics are important to
Measure all roles involved in the repair options process: the service staff may become customer-facing while the repair is
Results/
Maintain being performed; and the sales representative’s interactions with the customer may impact how efficiently the service
Process staff can complete the repair.

8.1 Track Customer-Facing Key Performance Indicators (KPIs)
8.2 Track Operational KPIs
8.3 Report Repair Options KPIs

8.4 Alter the Process to Improve KPIs

STEP 8.0 Measure Results and Maintain Process (continued)
This high-level Responsible-Accountable-Consult-Inform (RACI)

STEP 8
chart indicates how repair options tasks should be managed:
Measure
Results/
Maintain
Process Measure & Maintain Process RACI
Repair Options Standard Job Dealer
Coordinator Coordinator Sales Staff Service Staff Management
Track Customer-Facing KPIs (Key Performance Indicator) R C C C A
Report Customer-Facing KPIs R I I I A
Track Operations KPIs C R C C A
Report Operations KPIs I R I I A
Update Repair Options to mitigate issues or

in response to issues (as needed) R C C C A
Update Standard Jobs to mitigate issues or

C R I C A
in response to issues (as needed)
Make sales process changes to mitigate issues
C C R C A
or in response to issues (as needed)
Make operations process changes to mitigate
C C C R A
issues or in response to issues (as needed)
R – Responsible for Completing the Task
A – Accountable for Ensuring that the Activity is Completed
C – Consulted (provides input) for the Task to be Completed
I – Informed of Consequences of the Task

STEP 8.1 Track Customer-Facing KPIs
STEP 8 Ongoing improvement of your repair options program is

dependent on accurate customer feedback. The best Be sure not to over-focus on “low-selling” repair
Measure way to obtain feedback is to use a formal process,
Results/ options. To avoid this pitfall, evaluate the forecast
Maintain such as a customer survey, to monitor KPIs. Some (created in Step 3.4) before reacting to low sales
Process common KPIs include: performance. It is entirely feasible to have repair
options in your portfolio that are designed to
• Variance from quote (target: 0%) start conversations with customers, but might not
• Variance from promised delivery date (target: <0 days) equate to high sales volumes. These options
enable engagement with specific customers with
• Warranty on repairs
non-traditional purchase drivers and might
• Rework percentage on repairs eventually lead to transacting a different repair
• Customer survey results when the customer-facing staff is able to better
understand the customer’s needs.
• Competitive repair option offerings

STEP 8.2 Track Operational KPIs
STEP 8 Consistent tracking of repair option operational KPIs is

essential for improving the efficiency and assuring As you create and use your monitoring system,
Measure profitability of your dealership’s repair options program.
Results/ keep this in mind: Any additional work performed
Maintain outside of a repair option must be separated from
Process Operational KPIs include: the job so that it does not influence your evaluation.
• Repair options variance (target: 0%)

• Model and component coverage (vs. plan)
• Standard job utilization percentage
• Warranty on repairs
• Rework percentage on repairs
• Gross profit margin
• POPS

STEP 8.3 Report Repair Options KPIs
STEP 8 Your dealer management (and sales and service staff)

will need to review this information to ensure that rofitability analysis involves
P
Measure repair options and standard jobs are consistently
Results/ using the standard cost and the
Maintain designed to best reach the customer. For example,
Process if a sale is lost because a proposed repair option does suggested value price to
not meet the needs of the customer, this should be determine the profitability of the
recorded and reviewed with dealer personnel
responsible for developing standard jobs and repair
repair option. Then this figure
options. They can then decide how to modify the repair is evaluated against sales and
option to improve uptake in the future. profitability objectives.
Monthly Feedback Loop
Establish a monthly feedback report that compares In order to sustain development and utilization of repair
the actual parts and labor on each job to the flat-rated options within your dealership, be sure to measure the
amounts. It is important to remember that individual impact that standard jobs and repair options have on
variances are not as important as the average variance your dealership’s efficiency and profitability, as well as
over several work orders. If necessary, flat rates can Percent of Parts Sales Caterpillar (POPS-C) and/or Dealer
then be adjusted based on this information. Customer Acceptance Level (DCAL). Formulate a way to
document these types of benefits, and schedule regular
Review option coverage by model and adjust prices times to review the benefits with your dealership’s execu-
when necessary. Create a system (see Step 5.6) tive management team.
to keep service shops and customer-facing staff
informed of repair options sold.
The monthly report is equally useful to the service

shop. By knowing the flat-rated amounts and the
profitability of each job, the service departments are
often able to increase efficiencies to make the
program more profitable.

STEP 8.4 Alter the Process to Improve KPIs
STEP 8 Measurement of your program’s bottom-line impact is Managing and Controlling Costs
likely to reveal some interesting and important findings.
Measure The standard parts and labor costs developed can be
However, the real value lies in what you do with that
Results/ used to manage and control costs. These standards
Maintain information. For example, if the measurement process
specifically identify the parts and labor inputs required to
Process has identified some stagnation, flaws or opportunities
complete a repair option. For instance, the Labor Control
for growth in your program, then you can use that
Time identifies the repair procedures that should be
information to create goals or plans for improvement.
performed and how long these procedures should take.
This positive momentum not only will propel your program
Similarly, the Standard Parts Cost identifies the parts
forward, it also will help maintain employee enthusiasm
always replaced and approximately how often you
and involvement!
can expect to replace the parts with reusability
considerations. With both of these standards, the
It is important to note that cost management and control
Service Department knows exactly what is required to
are critical to profitability. There are only two ways to
complete the repair before work begins.
improve profitability of a repair: reduce costs or increase
price. If prices are continually increased to maintain
In addition, parts and labor standards can be used to
and improve profitability, prices will rapidly no longer be
identify the causes of cost overruns. Large deviations
competitive and customers will search for less expensive
(both positive and negative) from the standards signal
repair alternatives. This is not conducive to long-term
a need to investigate the cause of these deviations.
service sales growth.
Investigations of positive variances may uncover
opportunities to improve parts and labor efficiencies
Alternatively, if profits are maintained and increased
for other repairs as well. Similarly, investigations of
through cost management and control, a competitive
negative variances may reveal opportunities to improve
edge that is conducive to long-term service sales growth
profitability through closer parts reusability evaluations,
can be retained. Therefore, cost determination and
improved tooling or changing shop layouts. The
control are extremely important to sustained service
standards should be used as objectives to be met during
sales growth.
repairs, and trends identifying difficulties in achieving
these objectives should be investigated.

STEP 8.4 Alter the Process to Improve KPIs (continued)
STEP 8 Batch Processing Product Changes

Measure Another cost management tool is derived from In order to provide customers with accurate price
Results/ batch processing. For many components—such as options and the latest parts, your repair options sales
Maintain turbochargers, water pumps, starters, alternators, etc.— and service employees need to stay on top of new
Process batch processing can help reduce the rebuild products and information. The best way to make sure
time required. These components can be rebuilt faster that happens is to develop a process for sharing
in an assembly line process rather than be rebuilt Caterpillar provided publications with those employees.
one at a time. The publications to distribute include Information
Typical Results Release Memos (IRMs), Service Magazines,
Exchange Components Technical Information Bulletins (TIBs), etc. These
Greater use of Exchange components also can be an documents are indexed in SIS by serial number prefix.
You may be wondering what types of results indicate
program success. Take a look at these benefits that effective cost management tool. Exchange can be used
some dealers have achieved with successful repair to even out shop workloads by rebuilding components for
options programs: Exchange during slow work periods and using them on
revenue service jobs during peak work periods.
• Total dealer profitability improvement of 8-10% This can lead to the greatest use of shop capacity.
• Increase to 70% Percentage of Parts Sales (POPS)

vs. average of 40%
• Increase to 60% Service DCAL vs. average of 40%
• Reduced inventory
• Improved customer loyalty
• Technician efficiency increase by 20%
• Closure rate improved to 66%
• Component Rebuild Center (CRC) ROI 10X
over 25 years
• Technicians engaged in rebuild = 1/3 vs.
average of 1/6

GLOSSARY
Across the Table: A broad initiative launched in 2013, to ensure that Caterpillar and Committed Planned Repair Order (CPRO): Through the CPRO program, Caterpillar gives
Cat dealers work together to define and lay the foundation for a strategy addressing the highest priority to filling parts needed to complete committed, planned repairs.
our mutual challenges and build the foundation for our next century of progress. CPRO can be used to order piece parts required to rebuild a component. Overall, CPRO
is one of many programs designed to help forecast regional parts demands, improve
Adds: Additional parts that are included in the repair as a result of inspections customer satisfaction, improve asset management and reduce costs.
performed during the repair process. Add-on parts will typically include additional
cost and customer approval. Component Rebuild Center (CRC): A dealer facility (or section of a facility) designed to
help customers achieve optimum component life and reliability through world-class
BUILDER: Also referred to as G3 Builder. This is a desktop application that is used to rebuild practices. CRCs are equipped to rebuild and test all major components of the
price repair options and to author standard jobs. It includes functionality for part pricing, largest equipment Caterpillar produces today, and meet the same safety, quality and
labor rate, labor hours, replacement percentages as well as service intervals. contamination standards as a Caterpillar factory.
Cat Certified Rebuild (CCR): A like-new machine with a like-new warranty and a Core Acceptance Criteria (CAC): A list of predetermined criteria that a dealer uses to
new serial number, all at a fraction of the cost of a comparable new machine. make a quick determination of core credit.
Cat Inspect App: Cat Inspect is a new mobile and Web application that can be used Customer Service Support (CSS): The Caterpillar division that is focused on the
to walk the user through an inspection and record the information electronically. aftermarket parts and services business. The division includes parts distribution;
The inspection types include: Technical Analysis (TA1), Preventive Maintenance aftermarket parts and service marketing; dealer rental/used business development;
Checklists (PM), Certified Rebuild Inspections and select Mining Checklists. dealer operational capability development and deployment support; global brand
management; parts, service, marketing and technical publications; and select
Cat Parts and Repair Options Framework Strategy: A strategy focused on driving global services.
Caterpillar and Cat dealer alignment to offer customers a complete range of parts and
repair options to capture the maximum value of their machine and engine investment Corporate Web Security (CWS): A CWS ID and Password are needed to gain access to
across the lifecycle. Caterpillar applications (e.g., OLGA), websites (e.g., Dealer.cat.com) and other online
tools designed to help dealers build their repair options program.
Caterpillar Media Information Center (cmic.cat.com): CMIC provides access
to advertisements, bulletins, marketing kits and many other media useful for Customer Information Management (CIM) database: CIM is the enterprise safe source
promoting repair options. Searches can be refined to focus on product support for customer information, including end customer name and address, territory dealer
and specific industries. assignment and geographical data.
Caterpillar Repair Data Development team: The team at Caterpillar responsible Customer Support Agreements (CSAs): An agreement between a dealer and a customer
for authoring the Baseline Repair Option Builder files that are published on the to provide defined services on equipment over a defined period of time.
Service Marketing Information (SMI) System.
Dealer Customer Acceptance Level (DCAL) and DCALTC: A measurement of an individual
Change Management and Caterpillar Global Change Management: A toolset and dealer’s market share of parts business. The measurement can be further broken down
process that is available at Caterpillar to assist with implementing new processes. to show the individual contribution each technician (TC) makes to DCAL.
Collateral Damage: The unintentional damage affecting heavy equipment, such as Dealer Data Integrity Process (https://dealer.cat.com/ddip): A process Caterpillar
damage caused by neglecting to use a Repair before Failure (RBF) approach. offers to assist dealers with the accuracy of their customer and equipment information.

GLOSSARY (CONTINUED)
Do It Myself (DIM): A segment of customers who prefer to handle their own service, Global Construction and Infrastructure (GCI): Global Construction & Infrastructure is the
and turn to Cat dealers for parts, tools and information they need to effectively commercial, sales and marketing organization supporting the Earthmoving and Excavation
service their equipment. Divisions’ product groups as well as three Global Mining Division product groups. GCI
serves five major customer groups (heavy construction, pipeline, quarry and aggregates,
EMSolutions: A portfolio of technology-enabled services focused on delivering waste and local governmental industries).
equipment management solutions for construction customers worldwide.
Inside Sales Representative (ISR): A dealer employee who works with the sales team to
Enterprise Resource Planning (ERP): ERP creates a common environment that allows grow existing customer accounts, facilitate lead generation and qualify leads generated
Caterpillar and the dealer network to consolidate and share data with greater speed through telemarketing, email and other indirect channels.
and efficiency, lower cost, and more rapid replication that enables the extended enterprise
to deliver superior customer experiences and service to all segments. For repair options, Key Performance Indicators (KPIs): A set of quantifiable measures used to gauge or
it is an expectation that dealers possess an infrastructure to efficiently and effectively compare performance in terms of meeting strategic and operational goals.
process parts orders (parts countermen, PartStoreTM, Business-2-Business,
Dealer-2-Dealer and share and receive relevant data with Cat parts. Major Component ID Tool (Component ID Tool): A Web-based tool that allows users to
submit a list of equipment serial numbers and receive a list of the part numbers for the
Exchange Component: A component that has been rebuilt by the dealer without specific major components for each serial number. The tool can be accessed from SIS.
customer demand. The primary customer benefit is the quality of a dealer rebuild with
faster turnaround time. The primary dealer benefit is taking advantage of excess shop Major Component Strategy System (MCSS): MCSS is a component renewal strategy
capacity during lower demand periods. development process typically used for current and future mining market dealers.
The intention of the process and tools is to help a dealer develop a strategy for serving
Flat Rate: An item quoted or invoiced at a set amount regardless of actual service cost. major component rebuilds that includes: Dealer CRC development, Cat Reman minor
components to support dealer rebuild programs, and Cat Reman major components to
Future Dated Order (FDO): Using FDOs, dealers can tell Caterpillar when to ship the order. supplement dealer rebuild programs.
While there is no guarantee that the material ordered on an FDO will be available when
the order is sourced, placing an FDO does improve the ability for Caterpillar to have material Major Component Tracking System (MCTS): MCTS is a Web-based system designed to
available at sourcing time. Dealers that plan ahead and utilize FDOs will have the highest monitor major component status and history from the time a new component is installed
probability of receiving a complete stock order and could result in fewer backorders. into a prime product at the manufacturing facility until the component is eventually
scrapped. MCTS will initially track serialized major components, such as engines,
General (or Generic) Bill of Material (GBOM): A list of the serviceable parts that are transmissions and torque converters.
included in a repair. Since it is a generic list, it will be different from the actual list of parts
that apply to the customer’s specific serial number. This generic list is used to create Market Analysis: A methodical approach to review the overall marketplace including:
and price repair options. your offerings, your competitors’ offerings, pricing and customer perceptions.

Opportunity Lead Generation Analyzer (OLGA): A Web-based application, developed by Reman: An abbreviated term for “factory-remanufactured” (e.g., a Cat Reman
Caterpillar, that can calculate an individual Cat dealer’s parts and service opportunities component for an engine).
based on equipment population reported by the dealer.
Repair Before Failure (RBF): Repairing a component before it fails, to prevent a
Repair Options Framework: A strategic approach that defines the baseline of optimized situation that might result in more costly repairs and possibly collateral damage.
customer solutions for both maintenance/replacement parts categories (e.g., An important component of the Cat Parts and Repair Options Framework Strategy.
undercarriage), as well as parts offerings related to repair option opportunities, e.g.,
engine rebuilds. The Framework serves as a visual guide for Caterpillar and dealers to Repair Option: A service offering, including a price and a statement of work in
identify and act on product and serviceability gaps, and capitalize on opportunities. customer-specific language. Premium replacement, Cat Reman replacement,
Dealer Exchange, various rebuilds, various lower level repairs, as well as parts kits,
Patch Job: A repair that is completed quickly to get the equipment up and running again. are all different types of repair options.
Percentage of Parts Sales Caterpillar (POPS-C): Caterpillar branded parts sales Repair Options Effectiveness Assessment Tool: A Web-based program that allows
achieved, divided by the total parts sales opportunity on the population of Cat Cat dealers to assess their current repair service capabilities, and then forecast
products in the field. what they can gain by implementing the Cat Parts and Repair Options Strategy.
Planned Component Replacement (PCR): A demand planning tool used by Caterpillar to Reuse and Salvage Guidelines: Publications which document the visual characteristics,
improve parts support for our dealers and end customers throughout the lives of their measurement processes and specifications which indicate that another full life for a
mining machines. Each quarter, Caterpillar reaches out to our mining dealers to review component can be expected. These guidelines assist technicians in making the
their mining equipment fleets and populate the PCR template with planned dealer rebuilds, appropriate technical decision whether or not to reuse a component.
Reman need and new product need at the major component level. Caterpillar uses this
information to ensure we have material available in the network when it is needed to Sales Aid: A tool used to assist with the sale of a repair. A spec sheet is an example of a
perform component rebuilds and change-outs. sales aid.
Product Support Sales Representative (PSSR): A dealer product support salesperson Service Management Control System (SMCS): A Caterpillar controlled coding structure
responsible for larger customers and who primarily contacts customers in the field. that provides uniformity between Caterpillar and dealers when describing various
service-related activities. For example, SMCS uses “Component” descriptions to identify
Purchase Drivers: These are the factors that are important to the customer that will be a component, part or parts group defined in the repair description.
used to select a repair option. The primary purchase drivers are: ownership, utilization,
affordability and turnaround time. Services Marketing Process: Services Marketing Gap Model is a practical methodology
of proven tools and techniques within the marketing discipline. Services marketing is a
Rebearing/Reseal: A Level 1 repair that is done before failure to prolong the life of the process that closes the gap between what customers expect and what they perceive
product. This type of repair typically includes only seals and bearings. we deliver.
Repair Bill of Material (RBOM): A list of the serviceable parts that will be used in a repair. SIS/SIS Web: A Web-based tool that delivers technical product information to our
This list of parts will typically only apply to the specific serial number for which dealer subscribers.
it was created.

Site Operations and Maintenance Advisor (SOMA): A software tool that can be used to Total Dealership Approach: A comprehensive approach to implementing a new
help customers understand the correct time to choose RBF. The tool, developed by process at a dealership that involves strong teamwork and communication among
Caterpillar, takes into consideration a customer’s operation, maintenance and application sales, marketing, parts, service and administration.
factors, and provides an estimated cost per hour based on hours of usage.
Voice of Customer (VOC): A term used to describe the customer’s needs or requirements,
Service Meter Unit (SMU): The number of hours a piece of equipment or engine has which Caterpillar and Cat dealers need to know in order to provide best-in-class product/
been in operation. service quality. The voice of the customer can be captured in a variety of ways: direct
discussion or interviews, surveys, focus groups, customer specifications, observation,
S•O•SSM Services: S·O·S Services include oil analysis and coolant analysis. A key tenet of warranty data, field reports, complaint logs, etc.
a Repair Before Failure strategy, S·O·S is the fastest, most accurate, most reliable way to
determine what’s going on inside a Cat engine or machine. It’s an important step toward Voice of Dealer (VOD): A term used to describe the needs or requirements of
increased productivity, less serious repairs, less downtime and lower operating costs. Cat dealers. The voice of the dealer can be captured in a variety of ways: direct
discussion or interviews, surveys, reports, sales and service data, and more.
Spec Sheet: A specific example of a sales aid that can be used by the sales staff to
define the repair options to the customer. It will typically include: the price, the major Work in Process: Work in Process is the Service Department’s “inventory” of
component and the repair option title, the primary benefits of the repair, parts included non-invoiced work. This is a combination of the cost of repairs still in process and
in the repair, parts that will be tested or inspected during the repair, services that will be completed repairs which have not been invoiced. It includes labor, parts and
performed during the repair, a list of recommended add-ons that can be included in the miscellaneous costs
repair, a list of inspect and advise components that could be included after the
inspection, and a list of exclusions. Zift: Zift is a Marketing Automation platform available to dealers. It is developed and
supported by ZiftSolutions. Zift acts as a funnel for Caterpillar prioritized leads coming
Standard Jobs: Standard jobs are the tactical, operational processes dealers have in from our websites.
place to complete repetitive maintenance and repair tasks. Standard jobs are used in
service operations to provide guidelines to support quoting, flat rate repair options and
Customer Support Agreements (CSAs).
SWOT: An acronym used to describe a tool commonly used to create a strategy for an
organization. It stands for Strengths, Weaknesses, Opportunities and Threats.
Technician Career Development Program (TCDP): TCDP is a strategic and systematic

approach to managing and developing technicians based on a framework of skills,
knowledge and abilities for training service technicians. It offers a customized approach
to training that matches the training needs of the technician and the dealer service
operation, and targets the skills and knowledge needed for the service technician to
efficiently perform the job.

© 2019 Caterpillar All Rights Reserved.
CAT, CATERPILLAR, LET’S DO THE WORK, their respective logos, “Caterpillar Yellow,” the “Power Edge” and Cat Modern Hex trade dress
as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission.

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CAT REPAIR OPTIONS

GUIDEBOOK FOR DEALERS

A Comprehensive Resource for Developing, Selling, Version 2.0: February 2019

BEFORE YOU BEGIN..................................................................................................... 3 STEP 4: BUILD REPAIR OPTIONS OFFERING....................................................................... 61

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 2

While this Guidebook is designed to be a valuable

Glossary terms are underlined. When you click

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 3

Please use the Repair Options Effectiveness Assessment

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 4

STEP 0 STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6 STEP 7 STEP 8

Take Gain Conduct Design Build Build Measure

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 5

STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6 STEP 7 STEP 8

The Guidebook content is divided into eight sections:

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 6

This Guidebook is Designed to Be Used by Dealer Management

The makeup of your dealership’s management team may include

• Service Manager • Product Support Manager

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 7

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 8

Repair Options vs. Standard Jobs

REPAIR OPTION (Customer Facing) STANDARD JOB (Dealership Facing)

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 9

Caterpillar is Committed to Supporting In addition, the Caterpillar Customer Services Support

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 10

HERE ARE SOME OTHER IMPORTANT FIGURES TO CONSIDER:

66% of GCI Customers

Do It Myself (DIM) customers present a key opportunity:

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 11

Dealer Success Filling the Gap

$70,000 New: $68K GAP

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 12

The Framework defines the baseline of optimized

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 13

Optimized Customer Solutions

Attributes Clearly Articulate the Attributes of Each Option

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Optimized Customer Solutions

Attributes Clearly Articulate the Attributes of Each Option

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 15

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The Different Sections of the Framework

• Consider the customer’s historical buying patterns.

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 17

Purchase Drivers (continued)

3 AFFORDABILITY 4 TURNAROUND TIME

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 18

Repair Level Definitions

LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5

Minor Overhaul Major Overhaul Dealer Rebuild Reman New

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The first level is focused on parts designed to wear

COMMON LEVEL 1 REPAIRS UNDERCARRIAGE COMPONENTS

The key benefit again is extending the life of the major

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 20

DEALER EXCHANGE REBUILD

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 21

IS YOUR CUSTOMER’S EQUIPMENT READY FOR A REBUILD?

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 22

Considers Evaluates the Assesses Rationalizes

Quick Finder | Glossary | Resources Repair Options Guidebook n Page 23

Optimized Customer Solutions

• Consider the customer’s historical buying patterns.

1.4 Define Roles and Responsibilities

• Demonstrate how competitors in your region are stepping in to win business

reate a focused implementation team (Step 1.3)

W ho the competition is and what they offer, including their pricing

epair option details. To get started, be sure to:

• Determine where exchange components • Assess capability of individual service operations.

• Help general management define the formal

SSESS THE OVERALL PRODUCT SUPPORT