To speed up its expansion in India Caterpillar decided to outsource almost everything that happens immediately after it's vehicles leave the production line to WWL.
We’re seeing very high quality, attention to detail, and almost no customer claims.
The world’s leading manufacturer of construction and mining equipment, Caterpillar, has committed to investing more than US$200 million in new assembly lines at its plant at Thiruvallur, India, close to the city of Chennai. Caterpillar has been active in India for many years; its plant in Thiruvallur celebrated its fortieth anniversary in 2011. As part of Caterpillar’s 2015 corporate strategy, the company is aggressively investing in increasing capacity for a wide range of products, not only for the fast-growing Indian market, but also for exports to the rest of Asia, as well as on to South Africa, Europe, Russia and other markets.
“We’re undergoing an expansion and modernization of our facility there,” says Greg Janssen, Vice President of Logistics Operations, Manufacturing Logistics Services for Caterpillar Logistics, Inc. “We’re increasing our capacity, and installing state-of-the-art machining and best practices for manufacturing.”
Jennifer Leng, Regional Operations Manager, Finished Product Division Asia-Pacific for Caterpillar, traveled from her base in Singapore to Thiruvallur.
“When we went there last February, and looked at the area and the scope of the work being done,” she says. “We also interviewed some of the existing service providers and asked them if they had any suggestions or improvements to meet the increasing demand.”
Unfortunately, she says, “They basically said, ‘We’ll do whatever you tell us!’ We felt that something was missing in this area, so we decided to look for someone who could provide an end-to-end solution for this project.”
That someone was Wallenius Wilhelmsen Logistics (WWL)—and the company moved quickly. “Caterpillar and WWL have a very long relationship,” says Nick Bryan, Vice President in charge of Network Development and Supply Chain Management, “one that has expanded beyond pure ocean services in recent years with the network of H&H technical services facilities we have established.
Within one month of being presented with the opportunity, WWL had an international team on the ground analyzing the situation. Within just six months we had taken over their end-of-line production and shipping floor operations, after recruiting more than 40 people.”
Caterpillar decided to outsource almost all the activities that happen after the production process.
“When a truck comes off the line, it’s all assembled, painted, detailed out, tested, cleaned, everything—but you can’t ship it like that,” Janssen says.“
The machines have to be disassembled, in different ways depending on the destination, and packed on pallets or in containers, wrapped and so on. But you don’t want to damage the parts or in other ways give less than 100 percent to the customer. WWL came up with a very innovative approach on how to do this safely, and gave us a lot of support with the packaging, bundling and tracking of all the loose parts that go along with the big items.”
One challenge facing WWL was the existing shipping floor team was not adapted to the WWL way of working.
“They didn’t have a standardized process, quality-management system or inventory management system in place,” says Rocky Truelove, General Manager of H&H Technical and Inland Services for WWL in the US. Mr. Truelove spent three months in India overseeing the start up and implementation. “WWL combined the existing employees with a new management team.”
They broke down all the processes, added new standard operating procedures and began to monitor the skills of the staff.
One of the new WWL managers involved in this project was Devadas Babu.
“My main task was to bring the team into our corporate culture,” he says. “We shared our corporate policies and mission, and the WWL way of working. In the end we were all working on the same wavelength, with the same processes and towards the same goals.”
Today the shipping floor staff consists of 35 workers and nine supervisors, WWL employees who are working right in the middle of the Caterpillar factory. “We’re very pleased with the results,” says Janssen. “We’re seeing very high quality, attention to detail, and almost no customer claims.”
ABOUT THE SERVICE
After a Caterpillar vehicle rolls off the assembly line in Thiruvallur, almost everything is handled by WWL. The units are disassembled, painted if needed, and set on trailers, pallets or in containers, wrapped and otherwise made ready for safe domestic inland transportation or international ocean shipping, also by WWL. “This is a big development for us, because we have never provided this kind of in-plant shipping service for a H&H customer before,” says Kevin Killoran, WWL’s corporate account manager for Caterpillar. “By taking our experiences from more than 20 car assembly factories and more than five OEMs, we’ve been told by Caterpillar that the introduction of WWL’s Ways of Working and the mind shift that has occurred has raised the bar for their other shipping floors.” This, he says, makes it possible that WWL could be called in to offer similar services in other Caterpillar factories globally and to offer full factory to dealer solutions in line with our strategy.
Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company services customers in more than 180 countries, employs more than 100,000 people, and includes 24 brands creating some 300 products. In 2011, the company had sales and revenues of US$60.138 billion.
THE CATERPILLAR-WWL RELATIONSHIP
The history of WWL and Caterpillar goes back to the 1980s and Scan Carriers, later Wilhelmsen Lines, providing Ocean services to Europe and Oceania. By the 1990s, this had developed to long-term Ocean contracts with both Wallenius and Wilhelmsen, a relationship that was strengthened with a long-term partnership agreement in 2005 between the new Wallenius Wilhelmsen Logistics that was valid to 2015, and later extended to 2020. The service portfolio has been expanded from pure Ocean transportation to Technical Services, including seven equipment processing locations globally — and the new shipping floor within the plant in Thiruvallur, India.