Interview: Caterpillar Logisitcs Services
Name: Knut Heinemann
Job Title: Logistics Consultant
Company: Caterpillar Logistics
We serve clients in a number of industries from automotive,
aerospace, and manufacturing to high tech, industrial products, and
consumer durables. We help companies solve their industry
challenges involving inbound, service parts, and finished goods
Our heritage, know-how and experience have helped make us the
right choice for more than 60 companies in the following
- Aerospace & Defense
- Consumer Durables
- General Manufacturing
- High Tech Hardware
- Industrial Equipment
- Technology / Communications
How long have you worked for Caterpillar Logistics?
Over 5 years
How long have you worked as a Logistics Consultant?
- 3 years Logistics Consultant
- 2 years in Transportation Management for a global German
- 1 year with an automotive supplier
During your time in this field, what changes have you
The economy has certainly changed over the last 5 years. It is
more price sensitive and as a result clients are under huge
pressure and push this back to their suppliers. This has resulted
in Caterpillar Logistics having to look to innovative ways, e.g.
6Sigma, to reduce our operating costs.
The market has also changed immensely from a European to a
Global perspective. This has had the knock-on effect of requiring
global modelling tools rather than just regional tools.
Regional modelling tools do not cover all the complexities of
the supply chain. Thus, more flexibility is required in the tools
to ensure that a globalised scenario can be set up.
Transportation needs to be more dynamic nowadays. In the past
lane-by-lane transport was used regularly but now it needs to be
much more flexible due to the global nature of the supply
We have also found that a lot of businesses are now moving into
Eastern European markets. Caterpillar has seen a large increase in
sales in Eastern Europe due to the amount of construction taking
place there. Increased demands for logistics activities in Eastern
Europe have been one of the further consequences of this
Are the demands for your job very different from when you first
The changed requirements in the supply chain work require those
in my kind of position to have a much broader knowledge base than
was previously sufficient. This is again a result of the more
global demands of today's supply chain work. There used to be
different people responsible for different areas of the supply
chain, while today people involved in logistics work in different
areas and regions need to have a broader logistics background.
How has your job changed as a result?
I started my career in Transportation Management and my sole
responsibility was transport. These days, I am responsible not only
for the transport aspect but also planning, operations, network
modelling and network design. As mentioned previously, this
requires me to have much broader knowledge and skills than
Clients now look for broader knowledge and services from their
suppliers. They want us to have knowledge regarding aspects beyond
the warehousing & transport functions so we can develop
solutions based on all areas of the supply chain.
What is your opinion on the future of Supply Chain
In my opinion the future of Supply Chain Planning will be
end-to-end solutions. All functional areas need to have a global
view because regional tools will not fulfil the requirements of the
majority of clients these days.
Currently we use a program called CAST for addressing strategic
challenges. This gives us relevant input for the tactical modelling
and furthermore for the execution on a day-to-day business. This
requires linked software since it is time consuming and inefficient
to transfer data and information between non-integrated
I definitely see the future in end-to-end linked software and
What personal challenges do you face on a day-to-day basis in
The challenge to deliver proposals on time is very demanding
because we are very reliant on the quality of data that is given to
us by the client. It frequently occurs that data given to us needs
a lot of cleansing before it can be used meaningfully in our
modelling, which has the knock-on effect of delaying a
Also, client input which we received as part of a process called
gathering "the voice of the customer" may not be understood
correctly due to imprecise input, lack of direct and detailed
communication or interpretation difficulties, which can result in
us doing or offering to do certain aspects of work which the client
actually does not want us to do.
Delays in submitting proposals to clients can also occur because
we regularly find that clients are not sure of their own strategy,
e.g. with regard to the use of IT systems. They may, for example,
have two internal systems and need to decide on going forward with
just one. In such cases, there are at times significant delays
since we are waiting for high-level decisions to be made - this
cannot be foreseen and therefore planned for.
How do you overcome these?
We devised a new process for the sales strategy, which has 6
steps, and every new project goes through this process. There is a
checklist to follow and if it is not completed we cannot move on to
the next step of the strategy. It is a standard process based upon
6Sigma methodology and has standard documentation to ensure we all
follow the same steps.
The six steps are:
- Concepting Phase
- Solution Phase
- Negotiation Stage
- Signing Stage
This works really well as it ensures involvement of all areas of
the business (what we call Subject Matter Experts) and
significantly smoothens project management.
What software packages do you use to assist you with your
- CAST NV
- i2 Transportation Modeller
- MS AutoRoute
- MS Office Standard Package
It would in addition be great to have a link between tactical
and executional software. We are working on this.
What is your hot tip to others who do a similar job to
Understand what the client wants and make sure you obtain
detailed client agreement on essential parameters before work
begins. You need to be in agreement most importantly regarding:
- deliverables and timescales
You should always create a proposal timeline based on reasonable
parameters. It should be demanding but realistic and take account
Ensure you possess good benchmarking tools such as comparable
KPI's and market benchmarking; this can be achieved by analysing
external figures from consultancies, e.g. from Carlisle. We also
use Caterpillar Logistics benchmarks from our other businesses.
Keep up to date with the market and make sure that you are
continually attending conferences and updating your knowledge and
skills through proper training.