February 28, 2018
At Caterpillar, we have six operating segments – each of which has their own part to play in delivering on our corporate growth strategy. Our Construction Industries segment is primarily responsible for supporting customers using machinery in infrastructure, forestry and building construction. This article is a brief look at Construction Industries, led by Caterpillar Construction Industries Group President Bob De Lange, and how the group is gearing up for profitable growth using our key strategic areas of focus.
An early adopter of the Operating & Execution Model, Construction Industries understands the importance of strategic thinking over near-term focus. It begins with analyzing sales, segment margins and ultimately operating profit after capital change (OPACC) contributions, then allocating resources – time, talent and money – to those few critical projects that provide the best opportunity for profitable growth.
From 2013 to 2017, Construction Industries worked to improve quality metrics by 40%, reduce assets by $3.3B or about one-third, and consolidate facilities. In other words, we’re responding to the global marketplace and adapting to a competitive and flexible cost structure to deliver value.
Now more than ever, Construction Industries wants to make sure customers can make more money with our products and services that they can using any of the competition’s equipment. And that means adapting to the market and providing customers with more choices than ever. We’ll continue to offer our flagship lifecycle performance machines, but for markets where cash flow and affordability are key, we have lifecycle value and utility application options to fill the bill for those customers, too.
Construction Industries believes in helping customers succeed through offering solutions that cannot be solved by products or parts alone. We’re increasing our focus on the aftermarket and investing in digital technologies that are transforming how we deliver traditional offerings. And by doing so, we’re helping customers do more work in less time with fewer resources. It’s a win-win.
Further, to meet expanding customer needs we’re growing our rental and used businesses and creating a seamless customer experience across digital and physical channels. This retail journey will transform how we do business – from the moment a customer decides they need a solution, to when they’re ready to transact and, finally, when they own the machine. For Construction Industries, it all starts with focus on customers and understanding the industries we serve – industries we believe have long-term growth potential. With an increasing need for global infrastructure such as roads, housing, airports and energy grids, we’re optimistic about the industries we serve. We’re also confident in our strategy and global team, and we’re committed to driving profitable growth.