Caterpillar Manufacturing Plant In Service, Gm Parts Distribution Center

Caterpillar is the technology leader and world-leading manufacturer in construction and mining equipment, diesel & gas engine and industrial gas turbine; With the increasing competition, Caterpillar gradually transformed its business and profitability model; logistics became an important driver for profit growth. Caterpillar established its unique manufacturing inbound logistics model through supply chain competition. The study found that Caterpillar has its unique production system which emphasis waste and pull. Caterpillar has over 50 plants in US producing hundreds different products, about 30-50% of parts used are common parts, those are small, cheap and large volume parts, very suitable for centralized purchasing, warehousing and distribution, the Inbound Logistic Center (ILC) came into place; the ILC enabled the pull production and also eliminated waste in supply chain. Caterpillar entered China market in 1996 and invested more than 10 plants, every plant is managing its own inbound logistic so there is huge waste in the parts supply chain.The thesis studied Caterpillar manufacturing inbound logistics and its US model, proved that set up a China ILC is the right answer to the supply chain problems Caterpillar China plants are facing, the net present value brought by setting up the China ILC also supports to the decision. Some Caterpillar China plants locate in free-trade zone and they have gained privileges by such, the study proved that it is not practical to simply copy the US model to China. The China ILC should meet the needs of plants both in and outside the free-trade zone, also ensuring the bottom line impact to the company balance sheet. The thesis concluded that the best solution for China ILC should be a logistic center located outside of the free-trade zone with a bonded and non-bonded warehouse under the same roof. POU (point of use) logistics is the last chain in parts inbound logistic, it is the interface between logistic provider and the manufacture, being able to provide POU logistics for ILC parts to all Caterpillar China plants should be the future direction for Cat Logistics so to truly provide integrated inbound logistic solution.