No matter how good you are and how far you’ve come, there’s always room for improvement—that was the central message Dave Bozeman, SVP of Caterpillar’s Enterprise System Group shared with Summit attendees. Caterpillar, the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel electric locomotives, has come a long way over the last decade. A decade ago, the large, diversified manufacturer faced the challenge of aligning all of its various brands and operations around a central organizational DNA and boosting production efficiency. The company addressed the challenge by creating the Caterpillar Production System, which encompassed three key elements: its operating system, management system and cultural system.
The three components together, not one independently, make the system work—and it does work. Caterpillar measures its progress on four key components—people, quality, velocity and cost. Under people, for example, the metric is recordable injury frequency, which dropped from 6.5 to 0.79 over the past decade—or 51,000 injuries prevented. Similarly, approximately 500,000 defects were avoided due to quality performance enhancements under CPR, and 700,000 of 1 million vehicles were shipped on time. At the same time, the company reported a record increase in cash flow. Caterpillar, however, does not intend to stop there. The next step is to take a deeper dive within to find more opportunities for improvement. Already Bozeman has targeted several: pursuing a more holistic, connected system for its divisions, achieving a more disciplined culture and boosting the company’s lean expertise. He urged attendees to do the same, asking themselves:
- How has my business evolved over the years?
- Has evolution hindered my performance?
- How siloed is my business?
- Where are my hidden factories (i.e. repair bays) and how can I apply lean to them?
- Do we deliver on our customer requirements?