Caterpillar Logistics Services CEO Steve Wunning Talks About Full-Service Logistics
ASCET: What does it mean to truly be a "full service" logistics provider?
Steve
Wunning: At Cat Logistics, it means having the capability to offer a
full range of supply chain solutions for clients. Our focused strategy offers
logistics services to companies in the automotive, aerospace and defense, industrial,
technology, and consumer durables industries. We have more than 75 years of
practical experience in providing global supply chain services. Our Caterpillar
legacy is one of the company's core strengths and provides us with distinct
perspective that our clients value. Full service also means a global competency
unmatched in the industry today and financial strength to ensure clients that
we'll be there in the long term. Finally, it means having proven supply chain
management technologies, customized solutions, and best practices in distribution,
business processes, integrated logistics capabilities, and unmatched customer
service.
ASCET: Why is this important to clients?
Steve Wunning: Most clients today have to focus on two key drivers of business performance. The first is competitive advantage, and we have found huge opportunities to leverage supply chain performance to impact competitive advantage. Whether it's increasing cost efficiencies, time to market, better asset utilization, or any number of operational improvements, we've found that these can truly make the difference in gaining market leadership. And, given the tight budgets today, a 3pl solution can still allow companies to uncover efficiencies and savings directly from their logistics operations while reducing capital investments.
The other driver is shareholder value. This is about how the supply chain can contribute to top-line issues like market share and customer loyalty. If you look at the way companies are now valued, it's a straightforward look at market success, period. Are you a leader? Are you growing the business? Are you the preferred brand? And, do your customers value you enough to stick with you or even pay a premium for your products and services? That's where supply chain management can impact all your customer contacts and make them rewarding for your customers and profitable for you. Shipping accuracy, order-filling accuracy, faster shipping and delivery times, and reverse logistics are all examples of functional requirements that directly impact customer satisfaction and loyalty.
In short, optimal global supply chain performance is no longer a nice idea, it's a necessity for every market leader.
ASCET: How does Caterpillar Logistics Services differentiate itself from the competition?
Steve Wunning: Cat Logistics provides a comprehensive suite of supply chain services and capabilities that can integrate and maximize performance across the entire value chain.
That's why we have developed our unique Client Services Framework. It allows clients to address the scope of activities their company needs to compete in today's global marketplace, allowing them to zero in on a particular operational need or a broad range of related needs that may lead to breakthrough performance opportunities, improved customer service, and substantial cost savings.
ASCET: How does this create value for clients?
Steve Wunning: Many of our clients are seeing an overall reduction in their supply chain costs of between 10 and 20 percent. The savings come from operations, transportation, and materials management. We're also able to reduce inventory levels 20 to 40 percent in many cases, while maintaining or improving customer service. And we're able to reduce fixed assets, improving asset turnover, and achieving greater cash flow for these clients.
We're able to do this because we have the team of experts who work closely with clients to understand their business goals and the associated critical success factors required to achieve them. In short, we're able to assess the strengths and weaknesses across their entire supply chain network.
Another very important way we create value for our customers — one that is often overlooked — is a result of the economies of scale created by the size and breadth of our client base. Because of these economies, we continually invest to ensure we consistently provide the highest service, best quality, and lowest costs for our clients.
ASCET: What excites you most about the industry?
Steve Wunning: The software alliance we formed with Ford Motor Company to develop a new, world-class supply chain information software solution is the first of its kind in the industry. The alliance is working with SAP, as our technology provider, to build the software. The joint know-how, proven business processes, capability, and scalability of Cat Logistics and Ford, combined with SAP's global capability and focus on customer needs, will result in a "next generation" supply chain management solution that will provide unparalleled cost-effective business capabilities and benefits to companies across multiple industries and marketplaces.
