Hometown Vs. Canad A Case Study

PMT
I
Total Cost of Ownership
Purchasing Manager in Technology & Industry

Hometown vs Manitoba

Amna ADNANI
Hande ASLAN
Mireille AYANDHO
Kelly CHHING
Marion DARETS
Yseult DOUTRELIGNE

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AGENDA
Caterpillar Company & Strategy
Assumptions
PESTEL Analysis
TCO Calculation
Evaluation of Missing Information
Recommendations
TCO Improvement Axis
Cost Sensitivity
Estimation of Hidden Cost
$60 Production Decision in Manitoba
Currency Risk Assessment

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“Earthmoving solutions for today's challenges; 48 Hours Part
Service Anywhere in the world or Caterpillar pays”
Founded in 1925 in San Francisco
Group providing:
 Manufacturing
 Construction and mining equipment
 Diesel and natural gas engines
 Engineering vehicles and Caterpillar bulldozers…
The
Late Delivery

 Improving delivery on time level which is 95 percent for now in Hometown
 More difficult improvement for Manitoba - delivers already on time with almost a perfect percentage that is 97%
•

Transportation & Inventory

Purchasing department can make a major impact on the amount of transportation and inventory cost if they:
 Implemented a long term contract agreement with their supplier
 Work with supplier to improve communications in the supply chain
 Reduce surplus and obsolete inventory
 Challenge and optimize order quantities
 Implement software solution

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Some of the given cost (such as non-conformance, late delivery and ramp up delay) are not typically available. How could we make estimates on these values in the Caterpillar environment?

Non conformity, late delivery, ramp up delays involve:
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Replacement cost of a defective pump
Delay of the deliveries to our customer
Impossibility to assembly final product
Delay of editing invoices to our customer
Delay in cash entries
Loss on brand image

 So we suggest to calculate penalties on real cost of the loss

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