Winning Together 16M Product Improvement Program

Delivering a CONSISTENT and EXCEPTIONAL service experience through OPERATIONAL

EXCELLENCE and ENHANCED CUSTOMER VALUE resulting in Cat® dealers being the customer’s
PREFERRED services provider.

Project Sponsor: Mark Luke (Mining Manager)

Process Owners: Paul Morris (Manager Central Operations),
Ben Hawthorne (Customer Support Representative Mining)

Team Members: Steve Smith (Technician)

James Lewis Christie (Welding Team Leader)
Luke Jackson (Welder)
David Carroll (Welder)
Damien Crossley (Line Borer)
3rd & 4th Year Apprentices
Black Belt: Daryll Ennis - CPS Black Belt
Project Start date: May 2014
Project End date: July 2015

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Project Overview
Taking the initiative and a proactive approach to restore the 16M Motor Grader’s brand and reputation
within the mining industry in South Australia. After the initial PIP (Product Improvement Program), PSP
(Product Support Program) bundle program released by Caterpillar in 2012 Cavpower aggressively went
back to the market promoting the 16M as reliable as the previous 16H model.
Within six months the next wave of product issues, (PIP & PSP) started to appear and customers called into
question Cavpower’s integrity and Caterpillar’s quality. The customer’s perception was that the 16M Motor
Grader was not “fit for purpose” and as a backlash the dealership saw market share (PINS) drop across all
mining machines, stemming from quality issues as a result of poor availability, lost production and
ultimately a drop in customer loyalty.
The premise for the ‘Winning Together’ program was to identify all current operational 16M graders
working within territory and put forward a product support program to ensure all had the latest available
updates, ensuring no impact to productivity and without customers incurring any “Non Value Added” costs.
To achieve this, we worked in close collaboration with CUESI to purchase a used 16M “core” from
Indonesia, carrying out a machine overhaul including all the latest updates available as per the proposed
program allowed us to better understand the baseline for planning, the machine was then placed into our
mining rental fleet.
Cavpower inspected all 16M’s in territory to understand the scope required on each machine and working
with the local CGM team and the MG product group on supporting another bundle program to apply specific
updates to the machines identified. Working with the customer’s fleet managers and production staff we
removed the graders from site, transported them to Adelaide and replaced their machine with the rebuilt
rental support unit. The updates were administered as per the PSP’s to align with the latest machine updates
and specifications defined by the Caterpillar product group. This included Dealer recommended updates
outside of original scope of work (Tier 2 work) to provide enhanced machine reliability and restore customer
faith in the product.
Critical Customer requirements:
• Improve the availability and reliability of the 16M Motor Grader for customers who believed they had
experienced an average downtime of 1,667 hours per machine across an 18 month period.
Machine Date Date Duration Target Target
• Adherence to strict cycle times in accordance Serial # arrived at dispatched Weeks including Achieved
with the customer’s machine down schedule. Cavpower to Tier 2
Customer work
For each grader the target period for site to site Site
completion of all work was six weeks B9H00744 7/08/14 15/09/14 5.6 6 Y
maximum. R9H00242 9/10/14 13/11/14 5.2 6 Y
B9H00465 13/10/14 25/11/14 6.4 7 Y
• Identify additional Tier 2 work outside the PSP R9H00172 4/12/14 16/01/15 6 6 Y
scope and communicate with customer through R9H00202 2/02/15 11/03/15 5.6 6 Y
accurate estimates and timeframes to meet the R9H00541 17/03/15 23/04/15 5.6 6 Y
expected completion date. R9H00644 29/04/15 4/06/15 5.4 6 Y
R9H00738 10/06/15 10/07/15 4.6 6 Y
• Ultimately restore “Brand” confidence in the R9H00196 7/07/15 6/08/15 4.6 6 Y
16M graders.
Opportunity - Cavpower decided to replicate the CPS process used for previous major projects in order to
successfully deliver the outcomes of safety, time and quality. This was achieved through a detailed project
plan and job book identifying allocated times for each update along with the use of the Cat PIS system and
CPS boards. This process provided additional capacity for Cavpower to complete the Tier 2 repairs
identified during the course of the program within the agreed timeframes.
Customer Value Proposition - To eliminate further downtime and lost production for the customer,
Cavpower invested in a used 16M Motor Grader. The latest PSP’s and additional Tier 2 repair work was
identified and performed on this machine first to have the machine at an acceptable standard for the
customer. The repairs were also used as a base line for the program.

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This machine was provided to all customers during the overhaul of their machines at Cavpower with no
associated cost, avoiding further downtime and enhancing the “Winning Together Program”.
Project Goal
Y = Update all 16M Motor Graders within territory with the latest PSP to improve machine
reliability and availability with zero safety incidents, zero defects, on time and on budget.
X1 = Measure machine completion time - X2 = Measure labour variance to base line
X3 = Develop Planning & Scheduling and use of CPS Metrics Board
X4= Establish Standard Work - Quality sheets & Step-by-step instructions - X5 = CPS trained workforce
Measure Current State
Cavpower utilised the used 16M Motor Grader
which required all the PSP’s to be conducted as
identified in the Winning Together scope of
work as a baseline comparison. The allowed
labour hours identified on the PSP’s were used
as the target hours for each repair. The repairs
were also used for familiarization and training
purposes for technicians. The tier 2 work
identified was performed in a way which
allowed multiple technicians and work centres
to work on the machine concurrently. This
process was then replicated for all customer
machines which was crucial in meeting
timeframes of completion.
Analysis of Root Cause/Concept Exploration
Root Cause Analysis on the used 16M Motor Grader build up revealed the
following: Quick Win
Developed tooling
that allowed the safe
movement of the
front and rear frame
of the Motor Grader
with use of a forklift.
This eliminated
crane hire cost
saving $31,200
across the program
:
Improvement Development and Implementation
A FMEA review was conducted to assess and select the best solutions which included:

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 Visual Workplace

Transportation

Workplace Layout

Parts Kitting

Standard Work

Controlling the New Processes

The program was controlled by various methods including:

• Labour analsyis report capturing actual hours against target hours to ensure targets were achieved.
• Job books for each machine to record specifications and supervisor signoff.
• CPS boards providing the team with daily status update of progress to the target date deadlines.
Operational Excellence | Benefits to the Dealership Through the established CPS principles,
Parts Labour Misc employee engagement was realised. Staff were
$200,000.00
encouraged to foster the CPS methodologies to
reduce waste and improve workflow efficiencies.
$150,000.00 Through meeting targets and working closely
$100,000.00 with customers, Cavpower was able to estimate
and schedule Tier 2 work within the program
$50,000.00
schedule.
$0.00
The Winning Together Program generated
revenue of $1,340,000 with the Tier 2 responsible
for $837,000 - increasing the revenue of the
Sum of Total PSP Sum of Total Tier 2 Sum of Total Increase %
program by 166%. The Tier 2 work included
$343,000 of parts sales and would not have been
$400,000.00 500%

$350,000.00 450% 456%

450% captured without the program. Using CPS
431%

$300,000.00
400% methodologies our technicians were able to match
350%
$250,000.00 300%
Service Letter target hours equalling $504,000 in
$200,000.00 250% warranty work and a 100% reduction in the use of
$150,000.00
166%
200%
150%
3rd party crane hire saving $32,000.
$100,000.00 126%
97% 110% 100%
88%
$50,000.00 69%
50%
37%
14%
$- 0%

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 Metric Target Baseline Actual
P TRIFR% 0% 6.50% 0%
Q Rework % 0.2% 0.3% 0.13%
Deliver graders on time 100% 100% 100%
V
Labour variance % PSP -0.50% 0% 0%
C Incremental revenue Tier 2 50% 0% 166%
Replication Opportunities
The processes established to control and manage the 16M Program to plan is now formalised and replicated
across all projects and it is now "How we do business".
Customer Experience | Benefits to the Customer
Cavpower recognised that further downtime through the duration of the project would be unacceptable to
our customers. To proactively counter this issue Cavpower invested in a used 16M Motor Grader provided
to the customer for no associated cost.
An analysis of Alinta Energy’s 16M availability figures before and after the project has found an 8%
improvement across all three of their 16M Motor Graders to 93% recorded machine availability.
Customer Testimonial
I would like to commend Cavpower in regards to the manner in which the 16M upgrades program has been
managed. The graders I was involved with were completed in a timely manner with minimal fuss and
excellent communications. In regards to machine performance it is still early days however machine
behaviour to date has been positive.
Jeremy Herren – Maintenance Superintendent BGC Contracting

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