Case Study | Digital Transformation Thought Leadership

Caterpillar Unearths Data to Improve Critical Production Processes

The equipment maker used a rapid IIoT deployment to gain data-based insights and optimize production at a components plant. Now, the company is taking the deployment global.

Front load equipment on a site scooping minerals

Caterpillar equipment imprinted with the iconic “CAT” logo is a hallmark on job sites defined by grit and hard work – from building construction sites to rugged and remote mines.

Helping give Caterpillar equipment the durability its users expect is the company’s Advanced Component Manufacturing Division. The internal manufacturing group makes transmissions, hydraulic components and other parts for the machine and aftermarket businesses of Caterpillar.

Recently, the division embarked on a project to create not a new part, but rather something less tangible: data-driven insights about its production operations.

Shining a light on 'black box' operations

Accessing production data would open up new possibilities for the component division.

Its critical manufacturing processes were “black box” operations. This meant workers had no data proving that the process and product were actually meeting engineering specifications. The lack of data also resulted in inefficiencies and sub-optimal processes, which ultimately drove rework and other non-value-added costs.

“Our goal was twofold,” said Brent Ruth, global ACM ERP CoE Leader, Caterpillar. “First of all, we wanted to learn how to connect and utilize IIoT devices within our factory environment and get some quick wins. And secondarily, we wanted to gain insight into our actual manufacturing processes to include understanding what is happening in real time to be able to improve and optimize our process and efficiency.”

Starting the journey

An initial proof-of-concept took place over a blistering four weeks before Christmas. The goal? Capture PLC data from critical-constraint machines and present it with graphical analysis to manufacturing engineers, all of which would be done using the FactoryTalk InnovationSuite, powered by PTC.

For the project, Ruth built a team that brought together deep technical and process expertise, while also leveraging the support of Rockwell Automation and PTC. Team members came from IT and OT backgrounds that historically have had competing priorities. But they were able to work together because they both understood the vision of the project and were involved in executing it.

“We formalized collaboration between IT and OT through direct interaction,” Ruth said. “We did this by really rolling up our sleeves and working together as one team, all the way from refinement of strategy and vision up front, to project execution, and every step in between. By doing this, we were able to forge strong working partnerships.”

To generate and prioritize use cases, the team spent weeks on-site at plants to assess their readiness for digital transformation. They plumbed ERPs, dove deep into master data, and looked at how business was conducted both in the back office and on the shop floor. All this helped the team develop and prioritize digital initiatives that were aligned to business needs and goals.

“During those initial stages, we took a lot of time to engage our local business and finance people in quantifying the benefits and making sure that we had really good estimates based on industry, and also agreed assumption,” said Haydn Powell, global supply chain manager, Caterpillar.

A watershed moment

Creating operational insights and proving that production was indeed meeting engineering specs was a “watershed moment” for the component division.

With access to rich data context that it never had before, the division was able to see all of the non-value-added time in the process. And manufacturing engineers were able to improve and optimize the process quickly. So quickly, in fact, that they reduced overall process time by over 5% on day one.

Several hundred thousand dollars of cost were also saved by showing the plant didn’t need to add assets or shifts. Capacity was available after all – the division just needed the data to prove it.

Meanwhile, this early success proved to be just the start. The project scope was expanded beyond the critical-constraint machines to include the rest of the plant and other domestic and international plants.

“This work has been very instrumental in defining our future direction,” Powell said. “The initial sprint that we accomplished was done in weeks. And the current activity is continuing, because it’s really part of a journey.”

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