Logistics Case Study: Caterpillar Middle East

A look at the firm's successful partnership with Al-Futtaim Logistics.
Al-futtaim logistics, ANALYSIS

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Caterpillar products and components are manufactured in 50 U.S. facilities and in over 60 other locations, in 23 countries around the globe.

For more than 80 years, Caterpillar Inc. has been building the world's infrastructure, and in partnership with Caterpillar dealers, is driving positive and sustainable change on every continent. Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.

The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Progress Rail Services and Caterpillar Logistics Services.

In Dubai, Caterpillar Logistics operates a PDC or Product Distribution Center for finished product (machines). The PDC concept involves a Distribution strategy that has been developed to increase the velocity of product through the supply chain and therefore improve delivery time to our dealers. Essentially, the PDC provides high levels of sustained service, and short availability.

Caterpillar machines held at Dubai PDC are imported from various countries. Machines are then exported from the PDC by road and ocean to Middle East and East Africa destinations. The PDC location in Dubai was chosen due to its strategic hub location as well as its very good port facilities.

In an effort to improve service, capture cost reduction and to develop a long-term, competitive supply base, Caterpillar launched a Request for Proposal in 2009 for its UAE and GCC Regional clearance, forwarding and distribution. The scope included customs brokerage into and out of Dubai, freight Forwarding and road transportation.

Al Futtaim Logistics were chosen by Caterpillar after a detailed vetting procedure, which reviewed the following key criteria:

· Demonstrated capabilities
· Business philosophy of continuous improvement
· Well established relevant transport experience, in the UAE and Region
· Solid infrastructure base
· Strategic location
· Broad supply chain experience
· Competitive pricing model

"We are happy to have been chosen by Caterpillar for these services and shall make sure that we provide first quality services," states Tom Nauwelaerts, Head of Logistics for Al Futtaim in Dubai.

Implementation of the PDC was successfully completed within a challenging time frame, and Caterpillar is pleased with progress so far in the development of its PDC distribution strategy.

"We are looking forward to further optimizing clearance, forwarding and distribution activities with Al Futtaim in a mutually-beneficial business partnership," says Michelle Wahrenburg, General Manager for Transportation for Caterpillar in Europe, Africa, Middle East, CIS.

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