Case Study
Case Study - Caterpillar Logistics
The logistics arm of Caterpillar was one of high performance and strong cash generation.
Background: The logistics arm of Caterpillar was one of high performance and strong cash generation. There were, however, some very poor pockets of performance identified in three main logistics facilities in the USA. All three of these facilities were grossly underperforming and their employee engagement figures were dismally low in comparison to other facilities within the operational group.
The diagnostics: The main challenges at the facilities were a combination of all of the following:
- Geographical isolation from Group
- Long work hours with an unenthused work force
- A history within the facilities of merger between Caterpillar employees and Operational employees at the individual plants (i.e. MCI)
- An overwhelmed and under- lead management
- An inheritance of issues such as lower benefits and pay for employees following merger
- Lack of belief that the management "cares"
The measures: An Employee Opinion Survey was undertaken, primarily to measure employee engagement (EE). There was an acknowledgement that when individual employees are truly engaged, they tend to tolerate limited periods of lower work satisfaction and stay highly committed to the organisation. Engagement was measured as a combination of attitudes and priorities that have a consistent and predictable impact on behaviour. Those attitudes include satisfaction, commitment, pride, loyalty, a strong sense of personal responsibility, and a willingness to be an advocate of the organisation. When employees are fully engaged, they tend to be more productive, committed, and conscientious. The three identified facilities were hitting Caterpillar where it hurt most - at the bottom line.
These underperforming facilities within Caterpillar Logistics were targeted for the implementation of Investment In Excellence (IIE), after being recognised via the EE outputs as some of the urgent areas to improve. Each facility incorporated The Pacific Institute intervention under a dedicated Six Sigma project, to enable them to measure and control the facility outputs.
The process: Some tough "Vision Building" sessions were conducted and as an output of these sessions, a matrix of investigative and monitored MI was put in place. This enabled The Pacific Institute to quickly and succinctly to get to the root cause of the issues; it also aided monitoring of perception of the improvements and the statistics to back that up.
The Pacific Institute liaised with Cat to select and train some highly credible internal facilitators within Caterpillar and structured the delivery of the IIE programme in 4- hour slots, once a week, to all staff. Internally, The Pacific Institute produced an engagement survey, which was given to all employees to fill in every month so we could monitor a month- by -month improvement as we rolled IIE out to all staff. This facility- generated survey mirrored the employee engagement survey and incorporated some additional questions to help guide everyone through this transition.
The results:
Area |
Favourable |
Unfavourable |
Before - After |
Before - After |
|
Alabama EE |
38% to 75% |
28% to 13% |
Louisville EE |
25% to 41% |
41% to 26% |
Other areas of Improvement included:
- A noted reduction in absenteeism
- Higher motivation amongst staff
- More willingness to take on more shifts
- More initiatives instigated by staff
