Power Bytes

Customer First: Cat's CVA Offering

July 24, 2020 Caterpillar Inc. Season 1 Episode 10
Power Bytes
Customer First: Cat's CVA Offering
Show Notes Transcript

In these most uncertain times we all are looking for things that bring us a sense of stability and confidence.  Today we are going to be talking about why Caterpillar's  Customer Value Agreements can help. 
Joining me today from his home in Dubai is Andrew Haroun:  Andrew has Master's degree from Purdue university and has held a number of positions at Caterpillar during his 16 year journey with the company.

Lou:  Good Day and welcome everyone to Power Bytes!  I am your host Lou Signorelli and Power Bytes is your destination Podcast for power generation discussions.  As always please know how much we appreciate you, our listeners.  We hope you find our topics helpful and interesting.  There are several ways for you to get in touch with the show. You can send us an email at [email protected], visit us at Cat Electric Power on Facebook or LinkedIn.  Please remember to subscribe if you enjoy your time with us today. 
Lou: In these most uncertain times we all are looking for things that bring us a sense of stability and confidence.  Today we are going to be talking about why Caterpillar's  Customer Value Agreements can help. 
Lou:  Joining me today from his home in Dubai is Andrew Haroun:  Andrew has Master's degree from Purdue university and has held a number of positions at Caterpillar during his 16 year journey with the company.
Thanks for joining us today Andrew 
Andrew:  Thanks for having me Lou, and thank you for giving me the opportunity to talk about some of the services we offer our customers to help support them. 
Lou: So Andrew let's start at the beginning, I've always called it a "Service Agreement".  Why has Caterpillar moved to Customer Value Agreement.  What's changed? 
Andrew:  Traditionally, CSAs, Customer Support Agreements, were comprised of essentially a physical action; such as fixing a genset or selling a part. They were event- driven with a focus on parts and labor.  
With CVAs, the focus is on what we deliver: a customer outcome, such as hassle- free maintenance or engine protection. It’s life-cycle driven with focus on value promises. selling a customer parts, or parts and labor. 
 So we moved from traditional product support focused on parts and labor, to value- added capabilities that support customers at new asset delivery and across the life-cycle. 
Lou: Ok, so the "V" has significant meaning to a user and really should be seen as a differentiation to just standard contracts one might find around the industry.  Let's talk a moment about the sense of "hassle free ownership".  Has Cat put tools in place to put the user in control of their maintenance and repair schedule? 
Andrew: We have recently completed the development of the CVA offerings which provides 3 levels of offers for our Electric Power customers; which depend on how involved the customers want to be with the maintenance and repair of their assets. All 3 levels have the same value promises, which are hassle- free ownership & maintenance, peace of mind from equipment health management, and the security of expert dealer support. 
Lou: That's really a great idea.  Many owners I've talked to over the years would much rather be focused on their business than anything else.  Let's talk about part and parts availability. 
Andrew: We continue to invest in more parts distribution centers around the world, to help minimize the lead times for our customers to receive their parts. We also continue to refine and improve the processes we have in place with our dealers to help maximize parts availability for our customers. 
Obviously, when an asset is covered by a CVA, visibility to upcoming maintenance and repair requirements can help with planning and preparation.
We also know that our products are reliable and are built to be rebuilt. With that, we have assets that are many decades-old running in parts of the world, and we continue to supply parts for those units.  
I'd also like to mention something we are very proud of related to parts availability.  Caterpillar has 21 distribution centers around the world and ship 99.5% of orders on the same day the order is placed.

There are two things that are very important to the longevity of a piece of equipment beyond first quality 1) Parts availability and availability in a timely manner. (98% in 48 hours and 96% in 24 hours?  Not to mention the inventory held by dealers?   
Lou:  Those are some impressive numbers Andrew.  What about expertise and proximity to trained technicians? 
Andrew: We have a dealer footprint that is second to none, and that is one of the main advantages we have in doing  business with Caterpillar
We have dealers operating in some of the most remote as well in some of the most populous locations  in the world 
Locations where hardly anyone operates; and that is to help support our customers and keep their units running. 
Whether you're located in Beijing or Boston, we have a dealer close by to care for your power generation needs. 
Lou: What tools are available to help a user see when their units might need service or are having an issue? 
Andrew: CVA tools help us and our customers monitor their assets and lower the risk of issues occurring. 
We have many different digital tools in our tool belt to ensure our customers operations stay successful.  These tools range from a digital inspection app, preventative maintenance alerts to having access to real-time asset insights such as asset hours, location, fault codes, fuel burn, battery voltage and more.
This is where connectivity comes into place. Connectivity gives us and the customers access to real time information, helping us prevent failures from occurring. Where the customer owns a unit that runs in a prime application, or a unit running in a critical standby application, there is a significant cost savings due to the reduction on after- failure repairs as well as the cost of downtime. 
Lou:  Do you have any examples of how a CVA and connectivity benefit the customer?
Andrew: You might have heard Magy Kramer’s podcast earlier this year on connectivity through Cat Connect Remote Asset Monitoring.  We work closely together to use all the tools we can to help manage these CVAs for the customer.
One of our Cat dealers in North America smartly connected their customer’s gen set with Cat Connect as they also maintain it.  Through an alert sent by Cat Connect, the customer was proactively contacted and informed that their genset started during a localized power outage.  The customer wasn’t aware of the outage giving the customer and senior executives confidence their business operations were secure!  And thanks to the dealer, the maintenance, and design of the system, the genset did what it was supposed to do to keep the customer’s business operating effectively and seamlessly.
Lou: Andrew, in the end it's really all about the dollars.  Users really want to know how they can save money and plan a consistent budget for operating their facility.  Can the CVA help by creating a budget that helps to eliminate surprise expenses month over month? 
Andrew: Absolutely Lou, our units are usually running in critical applications, and it’s our duty to support our customers and help them minimize their owning & operating expenses. 
Within our Hassle-Free Ownership value promise, flexible payment terms will allow customers to spread the cost over the term of the CVA agreement helping them manage their cash-flow more effectively.  By having a CVA on their asset, the customer can be assured of gaining the maximum up-time from their engine saving them time and money in the process and allowing them to concentrate on what they do best.

Lou There you have it folks.  I'd like to thank Andrew Haroun for sharing his insights with us today… and thank you, our listeners for listening to Power Bytes.  For more information on this or any of our podcasts contact your local Cat dealer or visit Cat.com.  If you’d like to suggest other topics for the program or have some feedback to share,  please write us here at [email protected] or visit Cat Electric Power on Facebook or LinkedIn.   Please remember to subscribe to our Podcast wherever  you listen to your favorite podcasts.  Till next time, thanks for listening to Power Bytes and have a great day!