In the resources segment, Caterpillar reduced its breakeven point every year since 2012, and it’s “moving aggressively” toward autonomy and electrification to streamline the product line, according to Markman. The company is producing more, at same time reducing the footprint of manufacturing facilities by 7.9 million square feet. Product quality within its construction segment has improved 40%, while assets deployed have shrunk by $3.3 billion. The O&E model is not unique or new, but Caterpillar’s company-wide commitment to it is proving out, Markman wrote. This allows us to make swift, strategic choices so that we prioritize business opportunities with the greatest value.” “As a result, we allocate resources to those areas of our business that create or have the potential to create the most growth or improvement. “Using the O&E Model as a guide, we gain a deeper understanding of where we have a competitive advantage, which is key to generating high returns,” the company writes. The O&E model is a strategic framework to identify areas of the business that either create or consume the most value, according to Caterpillar. “This should pave the way for profitability even when business cycles turn lower.” “If done right, O&E should force a laser-like focus on its business strengths,” Markman wrote. While the company is benefitting from positive macroeconomic conditions, “the real story” is on the operational side, with the company’s “Operating & Execution Model.” “Operational excellence, which includes safety, quality, lean principles and our commitment to control structural costs, is one of the three key components of our enterprise strategy.”Ĭaterpillar’s rise is “a management story several years in the making,” Markman Capital Insight president Jon Markman wrote in Forbes. “We had a great start to the year, but higher sales volumes wasn’t the only contributor to this record first quarter results,” Umpleby said on the earnings call with analysts. Caterpillar’s $2.82 earnings per share, 85 cents higher than last year’s first quarter profit, beat Wall Street expectations by an “ astounding” 69 cents, and company executives raised their 2018 guidance to $10.25-$11.25 a share, far above the $9.27 consensus expectation. The Deerfield, Ill.-based manufacturer of machinery and engines last month posted its the highest first quarter profit in the company’s 93 year history, on a 31% spike in revenues, to $12.9 billion. Under CEO Jim Umpleby, Caterpillar is achieving “operational excellence,” and it’s showing up on the bottom line.

Caterpillar marketing plan