Supply Chain and Operations Management Analysis for Caterpillar

This report provides a comprehensive analysis of Caterpillar's supply chain and operations management. It begins with an examination of the operations strategy, focusing on integrating resource requirements and marketing functions. The report then delves into the managerial skills and competencies essential for navigating the rapidly evolving commercial and technological landscape. It explores the operations function, including optimal layouts for specific process workflows and process technologies. Finally, the report identifies methodologies for managing change within operations management, aiming to improve quality, implement lean management principles, and enhance the overall competitiveness of the business. The analysis covers key areas such as operational excellence, customer focus, and the importance of adapting to global challenges. The report highlights the significance of integrated business planning, value implementation, and linking supply chain performance to organizational success. It also emphasizes the role of information systems and technological advancements in achieving a competitive advantage in a dynamic market.

Supply Chain and Operations
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Operations strategy that will integrate with the resource requirements and marketing
functions for Caterpillar..............................................................................................................1
2. Managerial skills and competencies required for management of supply chain and
operations in a rapidly changing commercial and technological environment for the company.
.....................................................................................................................................................3
3. Operations function and report on the optimum layout for specific types of process work
flows and process technologies. .................................................................................................4
4. Methodologies that will assist with the management of change within operations
management in order to improve quality and lean management of operations and also improve
the overall competitiveness of the business,...............................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................1

INTRODUCTION
Supply Chain Management (SCM) is the flow of goods and their management which
includes storage of raw materials, inventory process and finished materials movement from
source to a destination for final consumption. It is an interlinked complex network and is much
more than just managing consignment (Hugos, 2018). Operations and Supply chain Management
(OSM) market remains broad due to the technological developments, competitors worldwide and
have to modify efficiency by reducing costs. In this project the supply chain and operations
management of Caterpillar by applying several methodologies will be discussed that assist
management of change within organization as globalization has destabilized its market shares.
MAIN BODY
1. Operations strategy that will integrate with the resource requirements and marketing functions
for Caterpillar.
Caterpillar's operational strategy focuses on answers to help customer in building a better
environment and allows to deliver profitable growth for the shareholders (Rajkanth, Srinivasan
and Gopalakrishnan, 2017). With the beliefs as a foundation firm it leverages an information
compulsive approach which is the the operating and executing model. It usher the decision
making process of an organization and assists in continuous profitable growth. Commitment to
understand the need of customers, with partners, delivers industry related goods and services
which are all centred on three areas:
 Developing core competence of operational excellence- Safe, attribute, lean and
competing price discipline to gain advantage.
 Expansion of offerings to make customer successful through unified and
specialized solutions.
 Increasing dependency on services with concentration on digitally enabled
solutions and after-market to add loyalty of customer then further to strengthen
firm's relationships with clients.
The reduced rates of raw materials can increase margin of profits in end product. If they
are bought at lower prices it is obvious that profit will be more and this will increase advantage
over rivals (Cooper, 2017). This view believes in the concept of sore competencies and relies on
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fact that competitive advantage can be achieved by quality and nature of power and abilities
within organization, in a way they are deployed in the activities and processes of firm.
Restrictions or capacity of the operations resources determine its strategic positioning and
execution of goal. The resources of Caterpillar presents its capability and market needs
necessitates operational rearrangement and a change in its carrying out of actions. For effective
strategy of operation Caterpillar must function keeping in market views and need also align its
resources for delivering on identified competitive factors.
Field of operations has become a dominating force in planning and managing production
capacity. Operations function of Caterpillar focuses on supply chain and assembly in order to
fulfil needs of the customer. Their strategy is to deliver required ongoing manufacture output
needs to integrate with the marketing goal of satisfying the product demands of customer.
Further illustration of this requires the operations team to assure that required amount and choice
of their output is meeting with the cost, resources and time allotted. This will help the marketing
squad to promote desired product output to satisfy customers and attain increased profit for
company (Sorbi and et.al., 2017). Operations team also needs to manage the inventory levels,
execute cost savings plans, minimize loss and optimum utilization of resources.
Marketing is responsible for the translation of functional visions into plans that assess
consumer needs and find ways to satisfy them. In caterpillar the designing department comes
under the control of selling management on the principle that marketing determines direction of a
product and design finds ways of specifying that philosophy. The market requirements
perspective of operations strategy is based on economic concept that places demand at centre of
all economic activities. Marketing strategies of caterpillar includes the customer value, delivery,
and process. It helps in brand developing and the firm will have a roadmap to reach its
customers. These needs are complex of demands which will trigger production process and thus
determine not only the input into manufacturing but also in operational management (Genovese
and et.al., 2017). If the company is not aware about its customer needs then operations will focus
on attaining false performance objectives but if market requirements are known then proper
emphasis can be given to appropriate carrying out of objective.
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2. Managerial skills and competencies required for management of supply chain and operations
in a rapidly changing commercial and technological environment for the company.
Main element in supply chain is talent, as it depends on smart managers and the
way it deals with people, relationships and problems. It may face many issues such as
globalization, increase in logistic cost, rise in labour costs in developing countries, level of risk,
short product life cycles, product varieties, advancement in technology, sustainability and
changes in commodity prices. All these challenges put in the need of skilled and talented workers
and management for future success.
International business leadership- Supply chain professionals should be able to operate
effectively in a fast paced worldwide business environment. Adapting to different cultures fully
focusing on how global risks affects the enterprise and being adjustable at managing long lead
times intrinsic in market place (Ayers and Odegaard, 2017). They should also be aware of the
basic supply chain fundamentals related with universal logistics, optimizing export-import flows,
sourcing, and way to deal with worldwide labour problems.
Transformational capabilities- Professionals in supply chain operates in changing
surroundings where they continuously drive dynamic initiatives. They must deliver on budget
and time when rendering first-rate results. As the obstacles are raised constantly they must
surpass at change in managing, complex projects, diverse talent, and have communication along
with negotiation skills.
Integrated business planning- A large part of supply chain are represented when dealing
with cross functional and enterprise issues. It involves integration of Caterpillar's operations to
its demand side and enclose demand or supply combining like sales and operations planning.
Professionals lead the way in designing integration of initiatives with suppliers and customers.
They also must attain the challenges of planning in end-to-end supply chain.
Integrated value implementation- As seen the central to caterpillar's success they must
go past customer expectations and become integral to deliver outstanding value (Zhu and et.al.,
2017). Some customers don't know what they tend to fulfil from Caterpillar and exceeds their
expectations. By implementation of end to end value chain design, segmenting customers,
products, supply chain process and optimization professionals in this field attains success.
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Linking supply chain performance to organizational success- With superior knowledge of
information and financial flow international professionals in supply chain combines expertness
in material flow management. Acquiring these flows is important to generate supply chain
performance and financial results. To sustain that execution they must also design frameworks
that drives the right behaviour and processes that delivers availability of product at the lowest
cost possible with high level of working capitals.
As the business environment continues to focus more on variety and quick
response to a dynamic customer driven marketplace, better effective information systems needs
to be developed. One of the best way to serve a demanding marketplace is to develop an
effective information systems. Enterprise resource planning systems are important to improve the
flow of data between systems. Managers needs to determine if the benefits of impressive and
prompt message flow will justify developing partnerships and with suppliers or customers.
Maintaining relationships with member firms can develop more efficient and effective
information systems which facilitates better integration of supply chain which utilizes the
enabling capableness of market (Michalski, Montes-Botella and Narasimhan, 2018). And in
coming future cyberspace will allow true supply chain management through transparent, real
time connection of all links. Decision maker have a little choice on the path to develop
enhancement in supply chain and integrating information systems. This increases
competitiveness of firms in terms of low cost, improved customer value and maintaining long
term advantage over rivals in the rapidly changing customer driven, technology enabled business
environment.
3. Operations function and report on the optimum layout for specific types of process work flows
and process technologies.
Operations management is a multi disciplinary field that focuses on managing all aspects
of the business operations and is related to actions providing service or products. It is necessary
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for planning, controlling to the terms of goods and services. All of its features include
understanding the commodities, location, size with respect to customer need, supply, techniques
and equipments. Developing commodities according to customer needs the operation function
brings together all raw materials with production process. It exchanges the ideas across the firm
about improvement in processes to achieve cost savings. Advantages of these kind of governance
are increased efficiency and more effective management of health, safety and environmental
issues. There are certain main activities performed by operations management like planning or
designing, organizing, and supervising which all include consideration of assets, costs and
human resources (Kache and Seuring, 2017). Process workflow is an action and automation
process working according to some set of procedures where tasks, information, and documents
are passed from one participant to another. The main objective of layout includes organizing
equipment and working areas in the most efficient way at the same time satisfactory safe for the
personnel doing the work.
Design- Before planning process operations management must analyse the market to
know the demands as it brings promising results. Planning involves designing new products from
the concept with several testing stages involved. Both technical and business requirements needs
must be considered while planning. Designing a new supply chain or other logistics processes
must be after the updates. If the product is a service design aims for variety of requirements and
customer contact levels (Kumar, Rahman and Chan, 2017). Plans should always be supportive
to the business as they are in focus when considering the costs and finding the best matching
quality and capacity. The importance of setting proper measures in this stage to understand the
actual performance meets the need of adjustments.
Management- After the design or planning phase it can now be produced with what
materials, cost, human resources, progress. As a strong base for maximizing operations
efficiency it may also need constant and competent management for correcting mistakes in
planning, adjusting production for changing costs, also to keep them efficient. The operational
management for attaining optimal results schedules and selects processes and materials for
quality and capacity. Quality management activities also includes organizing maintenance of the
equipments. Human resources is a main activity in operational management which have a great
impact on organization's effective operations.
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Improve- A better way to forecast demand is improvement of processes as it saves cost
and time. Quality of products will be high when total quality control is established and assess the
operational risks accurately (Pérez and et.al., 2017). Just in time manufacturing increases the
capacity issues solving.
Main objectives of facility layout planning is to minimise the total spacing of material
flow, the handling cost and the time spent in production unit. An efficient and effective layout
covers the following:
Supplying of optimum area for organizing and facilitating movement of goods and services to
make a safe comfortable working environment
To reduce the movement of employees, raw materials, components and equipments
Render plant safety including guarding of workers
Increase production capabilities of the organization
4. Methodologies that will assist with the management of change within operations management
in order to improve quality and lean management of operations and also improve the
overall competitiveness of the business,
Lean management is the act of reducing waste and adding customer defined value to
products and services (Hugos, 2018). Organizations implement and continuously looking for
ways to become more competitive in the marketplace. It helps to identify several types of wastes:
Motion- unnecessary movement of personnel, equipment or information because of
inadequate workspace layout, missing parts or tools.
Overproduction- Producing more than the actual requirement to meet the current
demand.
Defects- Non confirming products or services requiring resources to correct.
Inventory- Information stored or not being processed due to imbalances in line and
overproduction (Rajkanth, Srinivasan and Gopalakrishnan, 2017).
Caterpillar uses a lean manufacturing strategy of inventories management which aims at
reducing costs, increase production and attain competitive advantage. It is used to move
materials through the firm which results in reducing cost and time. To improve quality, overall
competence and lean management there are several methodologies that will assist the
administration of change in a business as follows:
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Reduced inventory costs- Maintenance of enough stock to complete orders is the lean
management function. To meet the requirements a customer order initiation to purchase of
materials is required. A firm uses its large inventories of supplies and materials along with its
fund to attain future growth.
Reduced lead time- In the production process a pull method is used by the organizations
to move the materials and products. To force the product through only when it is prepared is a
step in the production process needed by this pull system. A Single process with one product
moving through the production line at a time is the feature of an ideal lean manufacturing
(Cooper, 2017). Reduction in lead time improves the customer service which supplies a firm
with competitive advancement in market.
Quality improvements- To improve overall attribute of products a strategy focusing on
small quality modifications is involved in this process. Improvement in quality of the good and
services makes reliability along with customer satisfaction. Employees have the freedom and
power to make changes at any stage in processes is an advantage of lean manufacturing.
CONCLUSION
As discussed in the whole above stated report supply chain management technique will
be very much important as per daily activity of Caterpillar as it is working in mining and
construction industry. While operating within this industry it is required by management of
company to have managerial competencies and skills like that of leadership this would be
allowing Caterpillar enterprise to lead market. For company it is also required that they are
having good marketing function which is working in alignment to operations team in order to
achieve goal and objective of organisation as whole. As supply chain will be including many
suppliers and vendors of company so it is required that they are communicating with each one of
them to improve their market position.
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REFERENCES
Book and journals
Ayers, J. B. and Odegaard, M. A., 2017. Retail supply chain management. CRC Press.
Cooper, R., 2017. Supply chain development for the lean enterprise: interorganizational cost
management. Routledge.
Genovese, A. and et.al., 2017. Sustainable supply chain management and the transition towards a
circular economy: Evidence and some applications. Omega, 66, pp.344-357.
Hugos, M. H., 2018. Essentials of supply chain management. John Wiley & Sons.
Kache, F. and Seuring, S., 2017. Challenges and opportunities of digital information at the
intersection of Big Data Analytics and supply chain management. International Journal
of Operations & Production Management, 37(1), pp.10-36.
Kumar, D., Rahman, Z. and Chan, F. T., 2017. A fuzzy AHP and fuzzy multi-objective linear
programming model for order allocation in a sustainable supply chain: A case
study. International Journal of Computer Integrated Manufacturing, 30(6), pp.535-551.
Michalski, M., Montes-Botella, J. L. and Narasimhan, R., 2018. The impact of asymmetry on
performance in different collaboration and integration environments in supply chain
management. Supply Chain Management: An International Journal, 23(1), pp.33-49.
Pérez, A. T. E. and et.al., 2017. Key challenges and requirements for sustainable and
industrialized biorefinery supply chain design and management: a bibliographic
analysis. Renewable and Sustainable Energy Reviews, 69, pp.350-359.
Rajkanth, R., Srinivasan, G. and Gopalakrishnan, M., 2017. Material flow optimisation in a
multi-echelon and multi-product supply chain. International Journal of Logistics Systems
and Management, 26(1), pp.105-124.
Sorbi, S. and et.al., 2017. THE ROLE OF MANAGEMENT IN THE EVOLUTION OF THE
COMPANY'S SUPPLY CHAIN. European Journal of Management and Marketing
Studies.
Zhu, Q. and et.al., 2017. A comparison of regulatory awareness and green supply chain
management practices among Chinese and Japanese manufacturers. Business Strategy
and the Environment, 26(1), pp.18-30.