Reducing $2B of Slack in Outbound Supply Chain
Enhancing Caterpillar’s supply chain visibility through a real-time asset tracking system.
The Challenge: Caterpillar faced over $2 billion in long-term inventory holding costs due to inadequate visibility in their outbound supply chain. To identify key challenges and potential improvements, TheoremOne needed to gain an in-depth understanding of Caterpillar's outbound supply chain process, from manufacturing facilities to customer delivery. This involved conducting thorough interviews with internal stakeholders, visiting factories, warehouses, and dealerships, and speaking with end customers. Subsequently, we organized a series of innovation workshops to pinpoint and craft technological solutions aimed at enhancing supply chain and financial visibility.
The Solution: TheoremOne enabled Caterpillar to revamp their supply chain logistics visibility by delivering the initial version of a production application within 90 days. This system offered comprehensive visibility through a blend of software and hardware components, facilitating real-time asset tracking across international borders. We capitalized on existing legacy systems while developing new data aggregation tools to meet the program's goals. Questions that once required days to resolve could now be addressed instantly.
The Hardware: TheoremOne collaborated with device manufacturing partners to create a robust global supply chain solution encompassing battery life, GPS and cellular connectivity, handling sensors, durability, and ruggedness. Additionally, TheoremOne designed the shipping and logistics systems for deploying tracking hardware into the field, providing guidelines for manufacturing floor teams to attaching the hardware to outgoing products during the testing and qualification phases.