Caterpillar Mining Prepares for Recovery with Technology and Partnerships

"With desert temperatures climbing high at Caterpillar’s Tinaja Hills Demonstration and Learning Center near Tucson, AZ in September, a group of editors were given a reprieve from the sun and stepped inside the new Cat Minestar Command Center. The movie theater-like temperatures inside were a welcome relief, and the computer screens stationed around the room were an indication of not just how much things have evolved in the mining equipment sector, but also a peek into the future of where mining is headed.Equipment manufacturers like Caterpillar have always had to deal with peaks and valleys in demand that come with mining, perhaps never more so than in the last five years. Sudhanshu Singh, global product manager for Caterpillar, said that in one month in 2012, at the height of the mining Super Cycle, Caterpillar produced more than 150 large mining trucks (haul trucks that carry 136 t/150 st or more). By contrast, Caterpillar produced about 80 of those trucks in the full year of 2016. Between 2012 and 2016, Caterpillar saw its profits drop by 40 percent.“This shows how cyclical the industry is, and it is a testament to the strength of Caterpillar to be able to tolerate the wide swings,” said Singh. Demand for commodities is once again on the rise as are commodity prices with many signs pointing toward a recovery for the mining sector, and Caterpillar has positioned itself for the recovery. During its 2017 press event in September, company officials emphasized that Caterpillar has added strength in its technology divisions by forming new partnerships and adjusting its operating plan.“At the heart of our enterprise strategy is the operating & execution (O&E) model, a strategic framework to identify areas of the business that either create or consume the most value,” said Caterpillar chief executive officer, Jim Umpleby. “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.”"