Caterpillar: Thinking Outside AND Inside the Box to Reduce CO2 Emissions | Caterpillar, Inc.
“The project is unique as it address transportation and supply chain energy use. The company is presenting efforts to minimize ‘indirect’ emissions through supply chain enhancements. The company should be commended for its effort to affect its total energy use and greenhouse gas emissions.”
--Energy Manager Today Awards judge
With about a dozen employees worldwide, the transportation and packaging team of the Caterpillar Building Construction Products (BCP) Division, which manages all spend, projects, suppliers, and issues related to transportation and packaging for 10 Caterpillar locations, has significant potential to impact variable cost.
Over the past three years, they focused on continuous improvement projects to reduce cost while balancing quality, inventory, velocity, and safety. These efforts, the company says, have provided a cost savings of over $18 million while reducing CO2 emissions by more than 6,000 metric tons. Examples of these projects include: Creating new solutions to shipping machine parts (rather than just large construction equipment) via rail; utilizing annual transportation permits and developing a global database of restrictions heavyweight ocean shipments by state/country to increase ocean shipment density by 25 to 40 percent; developing custom equipment/processes to increase weight per load by 10 percent or more utilizing existing rules and regulations.
In order to effectively manage these projects, an integrated tracking tool was developed, and detailed tasks associated with each individual project were added to drive accountability. Additionally, projects were classified as budgeted or not budgeted and given a status of not started, in process, behind/has issues, or complete.
The project management tool evolved to also provide executive level summaries. To facilitate this “real time” information sharing, all files for the different regions of the world were rolled up into a single file. This included cost savings, CO2 reductions, graphs, and charts. Weekly meetings were established. As a result, a significant “pipeline” of projects was developed with around 50 percent of them in process at any given time.
The CO2 reductions reported by the BCP team have helped to re-shape the way sustainability is tracked. Historically, “direct” emissions have been the only source of carbon footprint tracking. This includes energy usage, facility waste, etc. Transportation is considered part of the “indirect” emissions and has not been significant enough to track in the past. However, the total reductions developed by this team have created a need to include both direct and indirect emissions to meet or exceed target levels
One judge complimented Caterpillar’s willingness to take significant risk by modifying and customizing existing systems. “The project demonstrates a significant opportunity for energy recovery on various industrial processes, as well as creative thinking by staff and pushing the limits by the organization,” the judge added.