SolutionsReferenceGuide-LR-24FEB2016.pdf

REFERENCE GUIDE
JOB SITE SOLUTIONS
C AT E R P I L L A R
VOLUME 1: STRATEGY

1 INTRODUCTION
2 ENGAGE
DEALER UNDERSTANDING
ORGANIZATIONAL ALIGNMENT
CUSTOMER ATTRIBUTES
CUSTOMER APPROACH
CUSTOMER UNDERSTANDING
14 LISTEN
19 DESIGN
PRODUCTIVITY
EQUIPMENT
SAFETY
SUSTAINABILITY
FINANCIALS
PROPOSAL DEVELOPMENT
35 ALIGN
39 DEPLOY
PRE-KICKOFF
SOLUTIONS DELIVERY
44 EXECUTE
DELIVERING THE SOLUTION
A FOCUS ON VALUE CAPTURE
SOLUTIONS RELATIONSHIP MANAGEMENT
TABLE OF CONTENTS

1
SOLUTIONS REFERENCE GUIDE //
INTRODUCTION
Why should we engage our customers in conversations
about Caterpillar Job Site Solutions? The answer is clear:
Because solutions offer the greatest potential value
proposition for all of us — our customers, Cat®
dealers and
the greater Caterpillar enterprise.
Through a solution, customers receive more than the underlying benefit a product or
service can deliver. As the chart below demonstrates, solutions allow a customer to relieve
their resource burden while gaining incremental value. By progressively relying on trusted
support from dealers and Caterpillar, and leveraging technologies that enable more robust
systems, customers can make
greater efficiency increases while
employing fewer resources to
achieve those gains.
Because customers do not have
to use their own limited resources
to extract value, they can focus
on their core competencies — the
reason they are in business and the
tasks they are uniquely qualified to
perform.
The greater Caterpillar enterprise
is uniquely positioned to deliver
solutions. No other competitor —
either OEM or third-party
integrator — is in a position to deliver
more value across the complete
asset management spectrum.
The goal is to craft solutions
that provide customers
the capabilities they either
don’t want, don’t have the
capacity to perform, or lack
the capability to develop
internally. We are uniquely
positioned to deliver more
value to the customer than
any other traditional or
non-traditional competitor.
Traditional
Methods
Customer Effort Cat / Dealer Effort Technology
Customer decides how to leverage our support based
on their competencies and resources
0%
20%
40%
LEVEL
OF
INVOLVEMENT
60%
80%
100%
Production
Reporting
Integrated
Solutions
Dashboards
Value Capture
Vision Link®

2
ENGAGE
During the engage process,
we ensure all parties are
thinking in a new way. We align
Caterpillar and dealer resources,
coordinate our organizations,
identify good customer
candidates and lead with a
solutions approach.

3
ENGAGE LISTEN DESIGN ALIGN DEPLOY EXECUTE
ENGAGE: DEALER UNDERSTANDING
EMBRACING A NEW WAY OF DOING BUSINESS
The solutions business represents a growth opportunity.
It’s an addition to the traditional transactional Caterpillar and
dealer business that requires a new way of thinking.
As a result, it is essential that dealership executive management understands how this new
way of doing business will affect the dealership and how it will drive business.
Alignment of Caterpillar and dealer resources is critical to the successful execution of the
solutions business and requires a level of integration between Caterpillar and the dealer that
is unprecedented. Without a firm understanding of the solutions business model, how it
drives business, and the roles each party is required to play, misunderstanding is inevitable
and will be counterproductive.
In a traditional machine sale transaction,
the Cat®
dealer has all of the capabilities
necessary to complete the sale and support
the machine throughout its life. The delivery
of a solution, however, requires partnership
and an extended engagement from a
number of parties. Neither Caterpillar nor the
dealer has all of the capabilities required to
design and execute a truly comprehensive
solution. An engagement team from both
Caterpillar and the dealer is essential for the
launch of a solutions engagement.
THE DIFFERENCE

4
THE TACTICS
Before the solutions process is kicked off with a customer:
»
» The executive team at the dealership must be briefed and must buy into the solutions
business model.
»
» Executive leaders from all of the functional areas of the dealership are
encouraged to understand how the solutions business model creates greater
value for the dealership.
»
» The myths associated with the solutions business should be addressed and dispelled.
»
» A core team within the dealership is established to engage in specific solutions
development efforts as well as champion the solutions effort as a whole.
ENGAGE: DEALER UNDERSTANDING
In order for us to take
advantage of this
tremendous opportunity
for growth, we all have
to understand how it
works and our roles in
making it successful.
It requires dealers and
Caterpillar to collaborate
and align like we never
have before.

5
ENGAGE: ORGANIZATIONAL ALIGNMENT
UNDERSTANDING THE ROLES WE PLAY
Solutions require integration across all areas of the Caterpillar
and dealer organizations — sales, product support, service,
parts and technology. It is critical that all of the functional areas
of the organization understand the roles they will play and
recognize that they do not act independently.
If the solutions business is to succeed, the metrics of the individuals within all organizations
must be aligned to drive the desired outcome. Metrics that drive individual results are
counterproductive. If solutions drive the greatest value for the organization, everyone
associated with the solution must be measured and incentivized to drive this business before
focusing on individual goals.
In a traditional transaction, individual entities
focus on their individual roles, driving
toward individual metrics. A solutions
engagement is much more collaborative
with a cross-functional team from the
greater Caterpillar and dealer organization
established to develop a solution. This
team is focused solely on the goals of the
customer, which take precedence over all
individual goals and metrics.
THE DIFFERENCE

6
THE TACTICS
In the traditional transactional business model, performance metrics are established with the
intent of driving the individual to a specific goal. Individual goals are aligned with the goals of
the organization from which the individual is a part.
In the solutions business, it is the customer goals that matter and the focus is on how the
products, services and capabilities of the greater Caterpillar and dealer organizations can be
used to drive value that the customer has identified and perceived.
Because organizational alignment is so important, we follow these tactics:
»
» All parties across Caterpillar and the dealer organization that interact with the target
solutions customer need to be engaged before a customer is engaged
»
» A call plan is developed and the roles and responsibilities of each party are defined,
understood and agreed upon.
»
» Through this engagement, it is confirmed that the goals of the greater organization will
yield greater value than the goals of the individual.
ENGAGE: ORGANIZATIONAL ALIGNMENT

7
ENGAGE: CUSTOMER ATTRIBUTES
IDENTIFYING A SOLUTIONS CUSTOMER
The solutions business model requires a customer who
understands his core competencies, understands how
specifically his business generates a profit, and recognizes how
the greater Caterpillar enterprise can add value.
The development of a solution requires a deep understanding of the customer’s business,
which requires all parties to make a significant investment in time and resources. A successful
solutions engagement requires a level of integration and transparency between the customer,
Caterpillar and the Cat dealer that is not normally associated with transactional business.
Unlike a traditional transaction, a successful
solutions engagement doesn’t begin with
a call from a customer who is looking to
purchase a piece of equipment or a service.
Rather, a solutions engagement begins with
Caterpillar and the Cat dealer, who initiate
the solution by approaching a targeted
customer. This initiation begins with a specific,
customized call plan, recognizing that not all
customers are targeted in the same fashion.
THE DIFFERENCE

8
THE TACTICS
Identification of a quality solutions target involves a deeper understanding of the customer
before an engagement begins. In conjunction with the districts and account managers, a
careful analysis of the full spectrum of the customer base is required to identify high-potential
candidates. An understanding of the customer culture, corporate structure and dealer
relationship is required.
A high potential customer has the following attributes:
Customer Culture
»
» Recognizes there are challenges associated with the way in which mobile
equipment is being managed.
»
» Recognizes that mobile equipment and its management are not the reasons
the company exists.
»
» Acknowledges that the resources of the firm — both capital and human —
are limited.
»
» Recognizes the value of utilizing external resources to accomplish tasks that are
not central to the mission of the firm.
»
» Has developed a positive relationship with Caterpillar and the dealer network.
Customers who have positive relationships with competitors are generally pleased
with the services the competition is providing and will not understand the value that
Caterpillar and the dealer personnel can provide.
(continued on next page)

9
Corporate Structure
»
» Centralized vs. decentralized decision-making
»
» Level of lean management organization
»
» Key financial drivers and metrics
»
» Ownership structure
»
» Financial reporting requirements
»
» Future business plans
Relationship
»
» Current business relationship with Caterpillar and dealer
»
» Knowledge and relationship with executive leadership / key decision-makers
»
» Not well-suited for conquest customers
(Tactics continued)

10
ENGAGE: CUSTOMER APPROACH
LEADING WITH SOLUTIONS
Aside from the financial incentive, initiating solutions
conversations with our customers delivers additional
benefits. The collaborative solutions process allows us to
build relationships with customers that enable a better
understanding of their businesses. Even if they choose not to
enter into a solutions contract, the insight gained by following
the process will better enable a traditional transaction.
It’s important that we bring JSS to the table early on. It is very difficult to close a solutions
agreement once a customer has been offered a transactional agreement and has rejected the
offer. In this scenario:
»
» The customer has already determined that the product in question does not provide
value relative to the price offered.
»
» A product or service that is sold as part of a solution is a more comprehensive offer and
may carry a larger price. Once a customer has declined a price, increasing the price and
the scope of the offer will not be well-received.
In the traditional transactional business,
contact with the dealer is led by the
customer, based upon a specific need
for a product or service. In the solutions
business, a customer is contacted
proactively before a need arises and an
offer is made to work with the customer.
The result is a changed relationship with
the customer.
THE DIFFERENCE

11
ENGAGE: CUSTOMER APPROACH
THE TACTICS
Leading with solutions requires a collaborative effort from all members of the Caterpillar and
dealer matrix, leveraging corporate / global account relationships.
»
» Starting at Caterpillar, the members of the organization that were identified as key
relationship-holders with the customer are enlisted to enable an introduction.
»
» Key members of the dealer community with established relationships are drawn into the
conversation.
»
» The parties reach mutual agreement on the goal of establishing a solutions agreement
with the customer.
Leading with a solution
changes the way we engage
with our customers—but
it’s an essential change
that gives us a competitive
advantage. Solutions allow
us to capitalize on the real
value we provide to our
customers well beyond the
iron that we sell them and
the support we provide for
that equipment.

12
ENGAGE: CUSTOMER UNDERSTANDING
ENGAGING THE CUSTOMER
Why is engagement so important when it comes to solutions?
Because a comprehensive solution is fundamentally different
from a transaction, and it is critical that customers understand
what we are proposing and how it differs from the transactional
business model with which they are familiar. All solutions are
unique and tailored to individual goals and metrics.
Caterpillar and Cat dealers have trained the customer to expect that we will “sell” products
and services of high value. They have come to expect — and in fact, demand — a level of
product and service performance that is beyond what is expected from our competition. If a
customer is to fully comprehend the value of the solution — expanded beyond iron — that will
be provided, he must also understand how we are changing the business model that we have
trained him to expect from the greater Caterpillar enterprise.
Rather than engaging the customer with the
sale of a piece of equipment, the solutions
engagement process begins with an offer to
work together to identify the complementary
capabilities of the customer, Caterpillar and
the Cat dealer. Very rarely will a successful
solutions engagement stem from a specific
transaction need expressed by a customer.
THE DIFFERENCE

13
ENGAGE: CUSTOMER UNDERSTANDING
THE TACTICS
Effective adoption of a solution will require a change in the business practices of
the customer.
»
» The customer needs to be engaged at all levels of the organization vertically
and horizontally.
»
» An introductory conversation is held with the executive team. This conversation does not
involve the delivery of a tangible offer, but rather the solutions concept is presented and
an offer to work with the customer to develop a framework for a solution is made.
Following a successful engagement, the customer will identify a potential need within the
organization, which serves as starting point or initial goal.
»
» The goal may or may not involve the sale of equipment or even the establishment of a
maintenance and repair relationship.
»
» The goal may simply be to understand further the capabilities of the Caterpillar
organization and how they can be leveraged to create value.

14
LISTEN
This is our opportunity to find
out what our customers value,
identify customer goals and
discover those areas where
we can create that value for
their organizations.

15
LISTEN
FINDING OUT WHAT CUSTOMERS VALUE
At this point in our engagement, customers aren’t looking for
answers, detailed pricing, or promises of how much money
they can save. They’re looking for someone to listen — to
identify their strengths and weaknesses, to understand their
goals and challenges, to learn what they value, and to partner
with them to help them achieve their definition of success.
This is our opportunity to become that partner — to look at their operation together and identify
those areas where we know we can leverage all of our products, expertise, services and
technologies to add value. We listen to understand their capabilities and look for ways we can
complement them — determining which of our offerings, in what combination, can create the
most value for their operation.
During the listen phase, we need to find out what the customer values, so that when it comes
time to propose a solution, the response isn’t “What are you trying to sell me,
” but instead is,
“That’s just what I need to overcome my challenge.
” Together we can identify their challenges
and bring them to the forefront, so that when we come back to them with a solution, we’re
addressing an immediate, urgent need.
THE DIFFERENCE
Simply put, the goal of this phase is to
listen. However, we’re not listening as we
usually do when we meet with customers.
Instead we’re listening in a new way —
without preconceived ideas of solutions we
typically offer, what we personally believe
will be of value to the customer, or what
will have the biggest financial impact on
our dealership, on Caterpillar — or on our
commission / bonus check.
During this phase, we don’t try to convince our
customers of anything. Instead, we ask them:
»
» What are you good at? What are your
strengths, main areas of focus, core
competencies? What are the activities
at your operation that you think are
going well?
»
» What are some of the problems you
are trying to solve? What areas of the
operation are troubling? What are your
overall pain points and daily challenges?
What are your financial goals?

16
LISTEN
THE TACTICS
In order to get to the heart of what our customers truly value, we must ask pointed, probing
questions that cause customers to think about their operations in new ways. In the process
we are able to identify needs the customer does not even recognize.
The tools and techniques used when listening to a customer to identify his goals and
quantify the opportunities are as varied as the customers we serve. We may complete a
process survey, evaluate performance management, perform an FPC study or evaluate
Mean Time Between Shutdowns. Whatever tools we use, we must recognize that it is not
the planned output of the tool that provides the answer. What’s important is how the output
is framed to specifically meet the customer’s goal. For example, when measuring MTBS
we are not looking at its effect on productivity; rather, the impact to consider is how MTBS
contributes to downtime and to identify the dollar amount per machine hour that we can gain
when we reduce that downtime.
Our job is to listen to
understand how our customer
makes money—then find
out what we can do to help
them make more. We have to
remove our own glasses and
see through our customers’
eyes in order to truly identify
what the customer perceives
will add value to their
operation.Then we design a
solution around it.

17
LISTEN
A solutions interaction is as different for a customer as it is for Caterpillar and the dealer. A
solution may have even more impact on a customer operation than a traditional transaction.
With this in mind, there are many groups and individuals representing a broad cross section of
the organization that must be heard as we craft a solution. Additionally, we must balance the
value and often competing goals and incentives of the individuals within the overall customer
sphere of influence.
There are any number of points where a question and answer session can begin. The listen
phase may start with an executive-to-executive meeting that opens the door for a pilot project
at an individual site. It may begin with a conversation with the maintenance and repair team
regarding equipment downtime, or with the operations team responsible for finding a way
to finance mobile equipment. We want to gather as much information as possible about the
operation and line up meetings with all of the people in the organization whose responsibilities
could be impacted by the capabilities we provide.
A traditional interaction would
be a customer telling a dealer
salesperson that he is in
need of a new truck because
he isn’t meeting production
goals. But the best solution
may have nothing to do with
equipment. It may require a
change in processes, a new
technology or innovation, or
the implementation of best
practices. Maybe he would get
more productivity with a new
maintenance and repair plan
that increases truck availability,
or implementation of a Cat
technology that improves
payload accuracy.
EXAMPLE
(Tactics continued)

18
LISTEN
WHO DO YOU WANT ON YOUR SOLUTIONS SALES TEAM?
There are as many different types of sales people as there are types of customer sites
around the world. Each person brings his or her individual style and skills to the table.
But there are certain key characteristics that the most successful solutions sales people
will have. They:
»
» Possess all the good qualities of a traditional sales professional — responsive,
trustworthy, thorough and diligent.
»
» Consider themselves business consultants who look at their customer’s
operations as a whole and look for ways to add value.
»
» Are not motivated solely by the commission that accompanies a machine sale.
»
» Are less worried about “closing the deal” and more concerned about doing what’s
right for a customer.
»
» Have a trusted, personal relationship with the customer and know their operations
inside and out.
»
» Are driven by customer success rather than the volume of the deal — even if it
means less profit for the dealership.
»
» Understand their role as “architects” who are selling capabilities and end results,
not individual machines or fleets.
»
» Are expert at interpreting customer needs and converting them into solutions that
we can deliver.
»
» Understand that they don’t have to be able to DO everything on our list of
capabilities, but they know where to find answers.

19
DESIGN
During this phase, we look at all
of the Caterpillar, Cat dealer and
third-party capabilities we have
in our toolbox and determine
how we can best use them to
help our customers achieve
their goals.

20
DESIGN
CHOOSING THE RIGHT TOOLS FOR A CUSTOMIZED SOLUTION
Now that we truly understand our customer’s challenges
and goals, we begin to see the areas where we can add the
most value to their operations. Designing a solution is not the
selection of a single product, technology or process. We must
look beyond a “transaction” to a measurable goal, and then
find ways to affect that goal.
During this phase, we look at all of the Caterpillar, Cat dealer and third-party capabilities
we have in our toolbox, and determine how we can best use them to help our customers
achieve their goals. We look at our core competencies in five areas — equipment, productivity,
safety, sustainability and financials — and find innovative ways to use them to deliver value
for the customer.
Success during this phase relies heavily on how well we executed the “listen” phase. We
must truly understand what motivates our customers, how they define success, what they
value and what they are willing to purchase. That understanding serves as the basis for the
solution we design.
In a traditional transaction, we deliver
machines. How customers derive value
from their purchase is up to them. If a site
purchases a truck that sits idle and never
moves an ounce of material, the customer
will derive zero value from that machine.
Caterpillar and Cat dealers have no impact
on the value that machine provides to the
site once it is delivered.
On the other hand, when we deliver a
solution, we are part of that solution and
share the responsibility for making it
valuable to the customer. Our goal is to use
our processes, tools and capabilities to help
a customer achieve a goal — and then take
responsibility for ensuring the solution we
design delivers that goal for the customer.
People are an essential part of every
solution. We don’t sign a contract and
disappear. We are continually innovating on
site to ensure that our customer realizes
the value we have promised.
THE DIFFERENCE

21
DESIGN
SAFETY
INSPECTION TOOLS & PROCESSES
GRADE & COMPACTION CONTROL SYSTEMS
OBJECT DETECTION & VISIBILITY TECHNOLOGIES
FATIGUE DETECTION SYSTEMS
OPERATOR TRAINING
ACCIDENT & ABUSE ANALYSIS
CULTURE ASSESSMENT & WORKSHOPS
SUSTAINABILITY
EMISSIONS REDUCTION
NOISE & DUST REDUCTION
ENERGY MANAGEMENT
FUEL & FLUID OPTIMIZATION
COMPONENT REMANUFACTURING
EQUIPMENT RECYCLING
FLEET EVALUATION & DESIGN
ROLLING EQUIPMENT PLAN
PRODUCTIVITY ANALYSIS
PERFORMANCE MANAGEMENT PLAN
PRODUCTIVITY
OPERATOR EFFICIENCY
HAUL ROAD OPTIMIZATION
STOCKPILE & LOAD-OUT MANAGEMENT
EQUIPMENT
MAINTENANCE & REPAIR STRATEGY
CONDITION MONITORING
BACKLOG & COMPONENT MANAGEMENT
PLANNING & SCHEDULING
PARTS LOGISTICS
REPAIR MANAGEMENT
FINANCIALS
CAPITAL MANAGEMENT
CASH FLOW & EXPENSE MANAGEMENT
FINANCIAL DESIGN
LIFECYCLE FINANCING
STRUCTURAL & OPERATIONAL CONTROLS
We are truly integrating with
our customers and providing
far more than a guaranteed
cost of repairs or ownership.
We’re also developing a
deep understanding of their
business and collaborating
to drive revolutionary
improvements in efficiency in
the areas our solutions touch.
Whether we’re involved in a single area,
in multiple elements, or delivering a full
complement of capabilities (Equipment,
Productivity, Safety, Sustainability,
Financials), we will be integrated with
customer leadership and day-to-day
operations to ensure their business is better
off with us than without us.
JSS, CATERPILLAR & DEALER CORE COMPETENCIES

22
DESIGN: PRODUCTIVITY
MAXIMIZING OPERATIONAL EFFICIENCY
Whether it’s producing more from a day’s work or completing
a day’s work more efficiently, this capability is focused on
leveraging the unmatched insight we have into what our
equipment is telling us to maximize operational efficiency.
We can provide a trusted resource to profile how machines should interact with
each other and with the environment in which they’re working to ensure they are as productive
as possible throughout the hour, shift, week, month and year. We will
consider questions such as:
»
» Is a unit idling too much and needs to be shut down, downsized or eliminated?
»
» Should a truck be pulled out on a specific haul route?
»
» Are downstream processing elements driving upstream inefficiency that
can be addressed?
We want to focus on systematically measuring what’s being done, predict what is possible and
help operations implement a plan to achieve the most efficient site possible.
While we often help customers improve
productivity through a variety of continuous
improvement activities, the way we approach
these activities as part of a solution is
significantly different. Rather than providing ad
hoc snapshots of an operation’s performance,
when we execute a productivity solution
we are implementing a coordinated,
integrated approach of all elements
of productivity—and then continually
reinforcing and measuring these activities
to eliminate any gaps in performance. As
a result, we deliver sustained, incremental
gains that continue to build. We provide the
technical expertise, a consistent approach and
a robust set of processes and rigor to keep
productivity gains at the forefront.
Of course, we do not expect each individual
dealer to have the capability to deliver on
every possible productivity solution. Rather,
we will leverage the best resources available
for each individual activity.
THE DIFFERENCE

23
DESIGN: PRODUCTIVITY
THE TACTICS
Performance Management
»
» Operation Evaluations
»
» Operator Training
»
» Production Reporting & Analysis
»
» Dashboards
»
» Haul Road Optimization
Utilization Management
Site Implications
»
» Site Analysis
»
» Worksite Layout
»
» Haul Road Optimization
»
» Simulations

24
DESIGN: EQUIPMENT
SHARING THE INVESTMENT IN CAPABILITY AND MANAGEMENT
Our goal when delivering equipment capabilities is to go
beyond what many competitors have done in providing cost
guarantees and substantial warranties. We can guarantee cost
in financial design, but this is focused on reducing the cost
and resources tied up in ensuring the fleet is operating when
needed and at the lowest operating cost possible.
A solution in the equipment space includes managing the assets employed, and providing
knowledgeable resources and logistics support to pull that administrative burden off our
customers. As solutions providers we share the collective investment in capability and efficient
management of these elements to design a right-sized fleet and maximize utilization and
productivity at an optimal cost. We want to focus on providing our customers with a trusted
resource to manage day-to-day fleet management activities with which they’ve traditionally
dealt. This service will allow them to focus on the people and processes in their business — not
on how to keep machines moving.
Designing the equipment portion of the
solution is much more involved than the
traditional maintenance and repair services
provided after a machine sale. With a
solutions contract, we are truly managing
machines and fleets, day in and day out.
We are in a position to be proactive —
identifying and executing on our own behalf
instead of waiting for a customer call or
directive. We are responsible for ensuring that
each machine delivers the value that we have
promised, and that we have the authority to
make that happen before failure.
THE DIFFERENCE

25
DESIGN: EQUIPMENT
THE TACTICS
»
» PM Services and Lube Trucks
»
» Repair Process Management
»
» Condition Monitoring
»
» Scheduling and Backlog Management
»
» Parts Logistics

26
DESIGN: SAFETY
UNDERSTANDING SAFETY’S IMPACT ON PRODUCTIVITY
Driven by ever-increasing regulatory and insurance pressures,
customers are looking for ways to improve safety and
reduce risk on their job sites. Caterpillar brings technologies
and services together to engage all levels of the customer
organization in identifying performance gaps and developing
sustainable process improvements.
When we execute a safety solution, we address two things:
1. How individual behaviors contribute to injury risk
2. The safety culture that drives those behaviors
Many engagements may begin with a safety assessment, whereby Caterpillar helps the
customer identify the root causes of performance pitfalls. Some customers already know
where their operations need improvement, but require technology to better see and mitigate
risk. And many customers choose to partner with Caterpillar on a long-range journey to safety
and operational excellence through culture change.
Customers know that employee retention,
effectiveness, morale and productivity are
improved when the workforce believes
management is committed to safety as a
value. Our solution brings the workforce and
management together to mitigate incidents
and develop cultures that promote safe
production as the only acceptable way of
doing business. We’re introducing industry-
leading technologies to help our customers
see, mitigate and manage risk in their
operations; culture-change methodologies
to increase employee engagement in
safety; and long-term strategies for
sustainable performance improvement.
While preventing injuries is always the
primary reason for safety engagement,
there are very real costs tied to safety risks
that we can help reduce, such as the cost
of downtime and repairs when machines
are damaged, the worker’s compensation
expense when someone is injured and the
regulatory fines that can be levied after a
safety incident. All of these costs also have
an impact on our ability to deliver on the value
that we are contracted to provide.
THE DIFFERENCE

27
THE TACTICS
Safety solutions are a blend of technologies and services.
»
» Culture assessment and improvement
»
» Technology to reveal hidden risk
Services
»
» Safety Culture Assessment (Survey, Interviews)
»
» Zero-Incident Performance (ZIP™) Process
»
» Supervisor Training (Accountability, Communication, Recognition)
»
» Safety Culture Excellence Workshop
»
» Fatigue and Distraction Intervention Plan
»
» Fatigue and Distraction Risk Management System
Technologies
»
» Driver Safety System (DSS)
»
» Cat Smartband
»
» Personnel and Object Detection
DESIGN: SAFETY

28
DESIGN: SUSTAINABILITY
Sustainability solutions include initiatives that help customers
improve their performance in the areas of economic growth,
environmental stewardship and social responsibility.
We focus on opportunities that improve our customer’s performance in all three dimensions.
Economic Growth. When we focus on helping customers build a sustainable business, we
identify the true costs of their business processes and look for every opportunity to reduce
those costs. For example, if they have spare equipment, there is a cost associated with
owning those machines even if they are not being used. Or maybe a customer is using a
large wheel loader to do a job that could be adequately performed by a smaller machine
at less cost. We can help customers look for options such as equipment rental that in the
long run will cost them less than owning a machine.
Environmental Stewardship. Environmental initiatives range from helping reduce the
emissions of CO2, dust and pollutants, to helping sites become more fuel efficient and
conserve natural resources by extending the lives of components and taking advantage of
remanufacturing and rebuilding. The goal is to drive greater productivity while minimizing
the consumption of resources.
Social Responsibility. Solutions can help customers meet their social responsibility
goals in a number of ways. We can implement initiatives that improving job site safety;
work with management personnel to help them optimize site performance; train operators
to work more efficiently, safely and productively; and help customers improve their
reputation and strengthen community relationships by minimizing the impact of their
operations.

29
We must find creative ways to balance the sustainability initiatives we deliver with the other
guarantees we are contracted to provide. For example, if we have agreed to deliver a specific
machine availability percentage, we must ensure there is adequate equipment on site to achieve
that level of availability.
We do this by focusing on three primary sustainability principles:
1. Prevent waste. By helping our customers increase safety, efficiency and productivity of
processes and products, we minimize the use of materials, energy, water and land, and can
deliver a cost savings for the resources conserved. In addition, building the right-size fleet
or using the optimal size of machine reduces fuel usage — and the corresponding costs
associated with it.
2. Improve quality. By providing high-quality products that last a long time, we reduce the
need for additional equipment and, as a result, the impact that manufacturing those new
products has on the environment. From the customer perspective, we work with sites on
operator training to ensure the best team, with employees who can leverage all their skills,
abilities and experience.
3. Develop better systems. By leveraging innovation and
technology to maximize efficiency and productivity, we
are able to accomplish more with less impact on the
environment. The focus is on total site performance to
engineer efficiency of the entire value chain, not just some
of the links. We maximize remanufacturing, rebuild and
recycling opportunities to conserve resources. Performance
gains achieved by improving one process should not
be accomplished at the expense of other parts of the
operation. We view solutions from end to end to ensure
our activities have a net positive result on the organization.
Designing sustainability initiatives as part of
a solution requires a new way of looking at
this important topic. For example, when we
rebuild a machine instead of manufacturing
a new one, we can calculate the net positive
impact that decision has on the environment
in the areas of reduced energy usage, fewer
emissions, elimination of scrap iron, etc.
We help customers assess and document
the benefits they are delivering through
infrastructure, environmental and community
enhancement projects.
Developing and implementing sustainability
initiatives can help our customers improve
business longevity. Guiding them toward
improved sustainability performance requires
us to understand the costs of everything
happening on site. It’s not as simple as
offering a remanufactured component over
a new one, or renting a machine rather than
purchasing one. We must ensure that every
decision is made with a clear understanding
of its financial implications and that it will drive
the long-term viability of the operation.
THE DIFFERENCE

30
THE TACTICS
Prevent waste
»
» Right-size fleet design
»
» Optimal machine selection
»
» Accident prevention
»
» Idle time management
»
» Extended fluid intervals
»
» On-demand consumables replacements
»
» “Housekeeping” to eliminate leaks,
contamination and wear damage
»
» Preventive maintenance
»
» Resource monitoring to eliminate
excess consumption, depletion,
degradation and obsolescence
»
» Implementation of measures to reduce,
reuse and recycle
Improve quality
»
» EPA retrofits
»
» Employee skills development and
operator training
»
» Proper tools, facilities and equipment
»
» Technology integration
Develop better systems
»
» Emissions analysis
»
» Maximize lifecycle benefits
»
» Leverage innovation and technology
»
» Sensing, monitoring and communication
technologies
»
» Remanufacturing, rebuilding
and recycling
»
» Optimize assets and production
processes and systems
THE DIFFERENCE
Equipment purchasing decisions are not
based solely on the initial capital investment
and expected operating costs, as they would
be for a traditional machine sale transaction.
Rather, we must look beyond the direct cost
of consumables and focus on the entire
life-cycle costs of customer operations,
including the cost of the operator on the
machine (the hourly wage plus insurance,
etc.), the cost of facilities used to support that
machine (electricity, water, tooling), and other
secondary costs that will be associated with
the purchase.
We also need to help our customers
understand the value of environmental
stewardship and social responsibility. We must
adopt a diligent process to accumulate, track
and communicate these benefits to build a
positive perception of all our sustainability
initiatives.
(continued from previous page)

31
DESIGN: FINANCIALS
UNDERSTANDING FINANCIAL DRIVERS
To design the financial deliverables of a solution,
we must have a clear understanding of the goals not
only of our customer’s operations team but also of their
financial organization.
We bring the decision-makers from the organization in on the front end to help us truly
understand the business need, and complete a sound investment analysis so that the right
decision is made. We look at the customer’s financial drivers — a lack of capital, the need for
an off-balance sheet transaction, the ability to manage cash flow and the need for predictable
costs — and align these financial metrics with the operational requirements.
We have the resources and flexibility to structure our contracts to meet their financial
objectives. We can turn capital investments into an expense, and provide asset utilization to
the customer. We are highly qualified to extrapolate costs over the life of the contract, and
match the equipment’s operational life to the equipment expense. Additionally, when we take
responsibility for financial aspects of the contract, we make it possible for our customers to
flatline their costs. Through financial capabilities, we have the opportunity to decouple the
economic cycle of the asset from the economic cycle of the business.
In a traditional machine transaction, our
role is to find any way we can to make it
possible for our customer to buy a machine.
We help them work through their purchasing
department and get the corporate approvals
necessary to proceed with the transaction.
The ultimate goal is that we make the sale.
In a solutions relationship, the goal is to
find a financial transaction that meets
the metrics that are important to both
the operations and financial teams. For
example, if the financial team allocates the
operations team a set amount to spend on a
machine, we create an arrangement where
they can rent the machine until the purchase
price is low enough to meet that set amount.
The goal is to find a solution that addresses
the metrics of both sides of the business.
THE DIFFERENCE

32
DESIGN: FINANCIALS
THE TACTICS
Developing a financial situation requires the answers to some important questions:
»
» What are the economic drivers of the industry the customer serves?
»
» How does the customer communicate with his investors, and what are his limitations?
»
» What drives the investment decisions he makes? Who makes the decisions, and
what evaluation criteria does he use?
»
» How are the individuals who make the decision incentivized? How are those
individuals affected by the solution incentives?
»
» What is the current overall financial health of the customer and what has driven
the situation?
–
– Market dynamics
–
– Business practices
–
– Previous investment decisions
–
– Operational considerations
THE DIFFERENCE
The transactional business model focuses
on the acquisition cost of the asset and uses
the lease of products as a method to help the
customer facilitate the transaction. Further, the
maintenance and repair costs are discussed
and Customer Support Agreements are used
as a method to guarantee a projected cost.
Through the solutions model, the financial
capability set focuses on how the mobile
equipment life-cycle expense fits within the
balance of the business needs. We use the
financial strength of Caterpillar, Cat Financial
and the dealer to provide the flexibility the
customer needs to manage the business
while providing the right equipment and a
highly available state.
(continued from previous page)

33
THE TACTICS
Developing a Proposal
There are three elements that need to be considered in producing a proposal.
»
» Ownership — Capital being invested to deliver the solution that’s been defined
to add value, as well as the cost of that capital.
»
» Parts and Labor — Future expenses that will be made on the customer’s behalf
to maintain and repair tangible assets utilized in solution delivery.
»
» Services — Ideally this component of the commercial offering is a function of
the value it will create for the customer.
Pricing
Pricing a solution is a complicated endeavor. Unlike putting a price on piece of iron, we
are determining what a customer will be charged for an end result, so we must make the
customer understand what that end result is worth. In many cases, we’re commercializing
something that has typically been delivered free of charge. As long as the solution we design
costs less than the value it delivers, it is a win for the customer. On the other hand, if the
customer does not see value in what we are proposing, there is no right price. If our realized
cost is greater than the realized customer value, the customer won’t pay for it. We typically
view over-delivering as a good way to do business. In a solutions relationship, over-delivering
frustrates the customer and increases our costs.
To truly deliver the results we are promising, we must be transparent with the customer and
be willing to recognize that the customer may not value our capabilities the same way we
do. If the solution is developed appropriately, the revenue gained will come from the addition
of value to the customer’s operation the way he interprets it — not through the sale of parts,
machines and service labor.
DESIGN: PROPOSAL DEVELOPMENT
EXAMPLE
This graphic shows the cost of installing VIMS
on a fleet of 777F trucks and what the value
of the installation is to the customer with and
without the intellectual property we provide
as part of a solution. Without our expertise,
the customer does not use the data VIMS
provides to add value to the operation. In this
customer’s eyes, it is our analysis of the data
and consultation that deliver the value of VIMS.
$ 15,000
VIMS
IP
Value added
VIMS
ALONE
VIMS AS PART
OF SOLUTION
$ 20,000
$ 25,000
$ 30,000
COST
COST
VALUE
VALUE

34
DESIGN
CAPABILITIES IMPACT MULTIPLE DELIVERABLES
The “deliverable” in a solution is the end result — what a customer has identified as
the goal (e.g., increased availability, consistent equipment management philosophy,
a reduction in assets). During this phase we present multiple scenarios with our
best recommendation based on their metrics and KPIs. Then we must determine the
capabilities we will use to provide the deliverable. Each capability we leverage can
have an impact on multiple deliverables.
Designing a solution goes
well beyond adding machines
to a fleet, or providing a
maintenance contract.
Designing a solution means
coming up with a way to
deliver a customer’s goal—
and that may mean choosing
NOT to sell them a machine,
but instead teaching them
how they can get the same
productivity without it. Having
this perspective is how we
will succeed in the solutions
business.
INCREASED MECHANICAL AVAILABILITY
EQUIPMENT:
Processes (M&R Strategy, Condition Monitoring,
Backlog Management, Component Management)
EQUIPMENT:
Execution (Planning & Scheduling, Parts Logistics,
Repair Management)
PRODUCTIVITY
FINANCIALS
IMPROVED ORGANIZATIONAL STRUCTURE
IMPROVED WORKING CAPITAL
ASSET MINIMIZATION (OFF BALANCE SHEET)
DELIVERABLE = CUSTOMER VALUE CAPABILITIES USED IN THE SOLUTION

35
ALIGN
During this phase, we present
our proposed solution and
ensure that all parties are
aligned in how it will add value
to the customer’s organization.

36
ALIGN
PRESENTING THE SOLUTION AND ENSURING ALIGNMENT
The align phase is when we present our designed solution to
the customer. We have listened to their goals and put together
those Caterpillar, Cat dealer and third-party capabilities that we
believe will meet their metrics for success — proposing only
what the customer values and nothing more.
Metrics should be very well-defined. For example, if our goal is to improve Mean Time
Between Shutdowns (MTBS) from five days to 13 days, we have the potential to gain eight
days of metric improvement, which delivers a financial gain equal to $1.25 per machine hour. At
over 500,000 hours of fleet-based utilization a year, the savings add up quickly. As we develop
our solution, we look at all areas for opportunities to achieve that additional eight days, such as
evaluating maintenance & repair processes and execution, ensuring the operation is utilizing
the right machines for the application, and working to eliminate any downtime that is due to
abusive failures. As we align the solution, all capabilities must enable the customer to achieve
his goal of improved MTBS. If we finance a machine, the incremental financing cost of a new
machine must be outweighed by the cost savings associated with the improved MTBS that is
achieved by operating the right machine in the application.
During this phase, the customer will determine if our proposal meets the objectives at both
the site and corporate levels. Will the makeup of machines and services deliver the required
production capacity and meet the goals of the maintenance and repair team? Does the financial
transaction meet their needs from the CEO’s perspective? This is the time when we ensure
that all parties are aligned.
There will most likely be some back-and-forth revisions during this phase, but touchpoints
should have been held with the customer during the design phase to get additional information
that was not gathered during the listen phase.
Unlike a machine sale, a solutions
transaction isn’t about price; it’s about
value. If the align process works as it should,
the customer will look at the price of the
solution in total — not at the cost of the
individual pieces and parts, but how that price
compares to the total value that the solution
will deliver.
In a perfect world, you will have identified
the value the solution will deliver and
the customer will agree that the price is
acceptable for that value. Of course, the
solutions process is not perfect and there
will most likely be some negotiation during
the align phase. As much as we try to explain
that the total value is what we’re pricing,
customers often want to know what they are
being charged for machines or services.
During this phase, it is essential that we
are transparent about costs. The more our
customer trusts our abilities to deliver the
value, the less time the align phase will take.
THE DIFFERENCE

37
ALIGN
THE TACTICS
Internal customer alignment. We must always ensure that the customer recognizes
and agrees that the solution we have designed meets their goals and adds value. In many
cases, the listen-design-align phases of solution development are circular. If there is a lack of
alignment, we’ll go back to listen, adjust the design, and then re-attempt alignment.
Contractual alignment of the transaction. The way we design the solution contract must
ensure that the transaction fits the individual customer’s businesses. For example, is a
machine in the solution treated as an expense or an asset? This is an important tactic in the
align phase, ensuring alignment between the entity delivering the solution (typically the Cat
dealer) and the customer.
Legal commitments of the value delivery. The results of a solution are not guaranteed.
For example, we will not guarantee a specific improvement in tons per hour or cost per ton.
The contract outlines a service to be performed, such as the use of equipment or execution
of maintenance, etc. We are legally committed to providing the service, but we do not
guarantee a direct financial result.
Contractual protections / obligations. We go to great lengths to ensure the solution
contract limits the financial exposure to Caterpillar and the Cat dealer strictly to the
execution of the services being provided as part of the solution. Our goal is to provide a
level of comfort to the entities executing this business. We also identify the obligations and
resources required of the customer to ensure successful execution of the solution. Dealers
do not have liability protection against any damages caused during the performance of a
service outlined in the solution contract.

38
ALIGN
Alignment between the capabilities being provided / responsibilities of Cat, Cat
dealer and third parties. Our solution is designed not to replicate any of our customer’s
capabilities. After we identify the best providers to deliver these capabilities, Caterpillar
enters into a legal agreement with these entities to ensure they will provide the agreed-
upon services. Whether the provider is a Cat dealer, Cat Financial, another Caterpillar
organization or a third party, we ensure there is a clear responsibility identified to provide
that element of the value we promise.
Risk / reward sharing. We believe we can deliver the value that we have promised, and
build that value into the solution. The reward to providers, then, is based on the service
provided and what it’s worth to the customer. We do not use risk/reward as the method
to gain additional revenue or drive down cost. When we make decisions regarding the
execution of the solution, we want all entities to be looking at the decisions from the
same perspective and aligned to drive the same result.
Identify resources and capabilities for multi-year engagement. This tactic focuses on
roles and responsibilities. For example, we must be aligned on who will be performing
maintenance and repair services or who will serve as a consultant on equipment
management. It’s essential that we align on this point and identify potential gaps. We
need agreement on who will add resources if they don’t exist, what that will cost, and
what the reward will be for taking on that role.
(Tactics continued)

39
DEPLOY
We have the most success
in delivering a solid customer
experience when we break
the deployment of a solution
into two intentional bodies
of work: Aligning ourselves
with all service providers,
and introducing customers
to their new world of
solutions partnership.

40
COORDINATING ALL SERVICE-PROVIDING PARTNERS
This effort integrates all parties into an efficient process that
can be leveraged with our customers. We are best able to
hit the ground running when we’ve coordinated all service-
providing partners prior to introduction to the customer. This
exercise will vary depending on the complexity of the solution
and number of partners engaged.
The key is to lay out a framework that can be presented to the customer for review. We
recognize there will likely be modifications to the plan, but providing a fully developed process
is ideal. It allows customers the opportunity to review and tweak, but eliminates the potential
misperception that they are responsible for building the solution and that they should have
developed the process independently.
DEPLOY: PRE-KICKOFF
Unlike a traditional relationship based on
a single transaction between a customer
and the Cat dealer, the deployment of
a solution requires the participation of a
number of parties. The pre-kickoff meeting
is essential to ensure the seamless
integration of the solution within the
customer’s existing operation.
THE DIFFERENCE

41
DEPLOY: PRE-KICKOFF
THE TACTICS
Dealer Kickoff Meeting (Should include leadership through service providers)
»
» Review documented scope of solution
»
» Identify roles and responsibilities tied to solutions delivery
»
» Develop outline of communication plan for daily, weekly, monthly and
quarterly communication
»
» Develop a plan for information flow to and from the customer
»
» Document infrastructure requirements
Alignment of other service providers
Acquisition of solution elements
»
» Procure hardware, software, equipment and materials for rebuild / rework
Create a customer kickoff communication

42
SETTING THE FOUNDATION FOR SUCCESS
Initial delivery of a solution takes us from introducing it to
the customer through ironing out the process by which
we engage the customer. We roll out the plan that’s been
developed for feedback and required modifications, and
trial run the agreed-upon processes to review the long-term
sustainability of the interactions.
Required modifications are made and tested to ensure a smooth operating environment that
provides the necessary interaction with minimal impact to customer operations. This sets the
foundation of how our solutions delivery will drive customer value that exceeds what they could
do independently. The key is to leverage our core competencies in as efficient a manner as
possible to drive maximum economic value.
DEPLOY: SOLUTIONS DELIVERY
This phase would not be necessary in a
traditional machine sale transaction. At this
point in the process, change management is
required. We’re beginning to build a level
of understanding as to how the solution
will operate, and the role that Caterpillar and
the Cat dealer will have in the management
of the mobile equipment fleet. At this point
we are working to build the customer’s
confidence in our ability to bring value.
THE DIFFERENCE

43
THE TACTICS
Customer Kickoff Meeting (Should include leadership through operators and office staff)
»
» Review deployment plan and gain feedback
»
» Identify roles and responsibilities tied to solutions delivery
»
» Gain buy-in on communication plan for daily, weekly, monthly and quarterly
communication
»
» Coordinate information flow to and from the customer
»
» Communicate and validate infrastructure requirements
»
» Validate customer metrics
Initial delivery of solution
»
» Commission new, rebuilt or used equipment
»
» Install hardware required for solution delivery
»
» Complete first run of communication transfer, which can include production reports,
inspection information, weekly meeting documents, fleet health reports, etc.
»
» Train site personnel, which can include operator training, systems usage, report
generation and consumption, etc.
DEPLOY: SOLUTIONS DELIVERY
Solutions opens up a whole
new scope of business for
Caterpillar and Cat dealers.
We’re able to do more for
our customers—significantly
increasing the number of
products we’re responsible
for supporting and reaping
the financial benefits that go
along with it. And the more
our customers see us as a
valued partner, the more
opportunities we’ll have
in the future.

44
EXECUTE
This phase is the beginning of
the long-term engagement that
is part of a Caterpillar solution —
and it’s what separates us from
competitors in this space.

45
When we execute a solution, we are truly integrating with
our customers and providing far more than a guaranteed cost
of repairs or ownership. Whether we’re involved in a single
area, in multiple elements, or delivering a full complement of
capabilities (Equipment, Productivity, Safety, Sustainability,
Financials), we will be integrated with customer leadership and
day-to-day operations to ensure their business is better off with
us than without us.
During this phase, we utilize the tools and capabilities that make up the solution to drive value
for the customer. It is not up to the customer to execute those capabilities we have proposed,
such as condition monitoring or oil sampling. It is our responsibility to execute the capabilities
on behalf of the customer and ensure that we deliver the value that they have been promised.
There are three components to consider in the execution of a solution:
1. Day-to-day execution of the solution on site
2. Management of the solutions contract and those responsible for executing it
3. Management of the solutions relationship
EXECUTE
When we deliver a
solution, we’re doing
more than encouraging
customers to follow best
practices. We’re executing
those best practices
ourselves, on behalf of the
customer. We’re using the
capabilities and executing
on the deliverables—and
delivering the value.

46
EXECUTE: DELIVERING THE SOLUTION
TAKING ON THE ROLE OF THE CUSTOMER
When we reach the execution stage, all parties have agreed
upon a game plan for the solution and now it’s time to deliver
on that plan.
In a sense, the dealer and Caterpillar representatives in charge of the solution take on the role
of the customer. They execute the contract with the dealership, dictating actions that need
to be taken, and pushing Caterpillar, the dealership and third-party providers to successfully
perform what has been promised.
It’s important to realize that at this point, the customer has given up the resources previously
used to execute these day-to-day activities. We are now serving as that resource and must
drive action on our customer’s behalf.
Under a traditional arrangement, we address
problems that are brought to our attention by
the customer. Now we are on the front lines
identifying problems and determining the
most effective ways to solve them. We’re no
longer reacting to a customer’s call; instead,
we’re taking an active role — looking at data
and analyzing the situation to determine
when something needs to be done. We’re
responsible for executing the action with our
Caterpillar, dealer and third-party partners.
And we’re focused on ensuring the long-term
success of the business itself.
THE DIFFERENCE

47
EXECUTE: A FOCUS ON VALUE CAPTURE
ENSURING THAT VALUE IS DELIVERED
In the execute phase, the role of the Caterpillar Job Site
solutions team is to manage the contract in partnership with
the dealer execution team — ensuring that all the resources
necessary (Caterpillar, dealer and third party) are aligned and
focused on delivering the value promised.
They don’t need to be experts on every element of the solution, but they must be able to
understand the value, recognize if it has been successfully delivered, and if not, develop a
strategy to ensure it will ultimately be achieved.
This team must understand the customer’s business well enough to clearly see those
areas where the solution is having a positive impact on their business, and at the same
time recognize those areas where we can expand our solution to add additional value and
complement what is being delivered.
Traditionally, the Caterpillar team interacts
with dealers and customers when a sale or
service opportunity presents itself, getting a
snapshot of a customer’s business required
to gather information and execute that single
transaction. When we execute a solution, we
are integrated with the dealer and interacting
with the customer day in and day out, jointly
ensuring that the value perceived at the
“sale” of the solution is:
»
» Delivered to the customer
»
» Communicated to the customer
»
» Recognized and acknowledged by the
customer
THE DIFFERENCE

48
THE TACTICS
»
» Leverage the clearly defined playbook created during the Deploy phase
»
» Consistently identify, communicate and help implement impactful change
that drives value
»
» Quantify the value created using specifics (efficiency gains, dollar savings, etc.)
»
» Capture the value in reports (production, fuel, safety metrics, utilization)
»
» Communicate the value to stakeholders and ensure their acknowledgement of it
While dealers will always
be the face of Caterpillar
to our customers, a
solutions agreement
requires more involvement
from the entire Caterpillar
enterprise.The Job Site
Solutions team will be
involved in the day-to-day
relationships that have
traditionally belonged to
the dealers alone.This
increased involvement
means additional support
for dealers, which makes
it easier for them to be
the valued partner our
customers need.

49
WHO DO YOU WANT ON YOUR SOLUTIONS EXECUTION TEAM?
Working on a team in charge of executing a solution is an extremely challenging role. There
is a significant transition required for someone who historically was charged with enabling
customers to now be in a position to actually execute activities on their behalf.
In addition to having the support of a dedicated leader, there are certain key characteristics
that most successful solutions execution team members will possess. They:
»
» Possess all the good qualities
of a traditional customer-facing
professional — responsive, trustworthy,
thorough and diligent.
»
» Are experts in understanding the value
that is being sold to the customer
and are focused solely on ensuring
that value delivery, communicating it,
and gaining recognition of it on a
regular basis.
»
» Consider themselves business
consultants whose goal is to have a
positive impact on their customer’s
business, as well as to look for future
sales opportunities that will come about
because of the existing solution.
»
» Have the ability to develop a trusted,
personal relationship with the customer
and are committed to knowing their
operations inside and out.
»
» Are driven by customer success —
being proactive and fixing problems
even if it means less short-term profit
for the dealership.
»
» Have a level of confidence and feel
empowered to challenge their dealer
organizations, Caterpillar and third-party
solutions partners to ensure value is
delivered as promised.
»
» Have the authority to question dealership
fees charged for a service that they
believe was necessary because of poor
provider performance, not because of the
customer’s actions.
»
» Are willing to be held accountable for
delivery of the value promised.
»
» Understand that they don’t have to
be able to DO everything on our list of
capabilities, but they must know where
to find answers.

50
EXECUTE: SOLUTIONS RELATIONSHIP MANAGEMENT
MANAGING AND COMMUNICATING CHANGE
When we partner with a customer on a solution, we are
creating a long-term engagement that for many is unlike any
relationship they have had with a manufacturer or dealer in the
past. In addition, we are responsible for implementing what
may be monumental changes in how they run their operations.
It is essential that we clearly communicate the changes that are being made, the value that
these changes deliver, and the focused resources we have allocated to deliver that value. No
two Job Site Solution engagements are alike, and as a result, every solution must be handled
with respect for what makes it unique. We must always ensure that our focus is on the value
drivers that have been determined for that specific engagement.
In traditional customer relationships, the
value we provide is often assumed. We
sell machines or partner on continuous
improvement projects and complete the
engagement with an understanding of actions
the customer needs to take that will create
value. In a solutions engagement, it is
essential that we continually communicate
the improvements that are being made,
gain acknowledgment for the value being
received, and earn recognition that it is an
outcome of our partnership.
In traditional relationships we make “going
above and beyond” an expected behavior,
assuming the customer will recognize the
positive outcome we’ve delivered. In a
solutions relationship, we have to be able
to communicate that value over and over
again, building a solid business case that is
recognized and understood throughout the
organization. We must avoid doing activities
outside of the contract that may later become
a perceived benefit rather than one for which
we are being compensated.
THE DIFFERENCE

51
EXECUTE: SOLUTIONS RELATIONSHIP MANAGEMENT
THE TACTICS
»
» Find ways to communicate value using real numbers: dollars and cents, percentages of
efficiency gains, consumption of resources, actual performance against goals, etc.
»
» Hold meetings to ensure clear communication (weekly and quarterly meetings;
stakeholder reviews)
»
» Create a value story, showing the customer where they are receiving a return on their
investment.
Under a solutions
agreement, we are
responsible for ensuring
that each machine delivers
the value that we have
promised. We also need
to ensure we have the
authority to make it happen.

©2016 Caterpillar. All Rights Reserved.
CAT, CATERPILLAR, their respective logos, “Caterpillar Yellow,
” the “Power Edge” 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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SolutionsReferenceGuide-LR-24FEB2016.pdf

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