Taking a new perspective on its business ecosystem enabled Finning, the world’s largest dealer of Caterpillar construction and mining equipment, to recapture some of the revenue it was losing to its competitors – while also benefitting its competitors.
Owners of Caterpillar equipment were treating their machinery in a similar way to how many vehicle owners treat their cars – going to an independent garage for a service rather than taking it to a certified dealer.
Finning and Caterpillar remotely monitor vehicles, with data being captured on the health of the vehicles and engines to help with diagnosing problems.
This trend was not only resulting in lost revenue from the sale of parts and servicing, but many of the independent garages often used non-certified Caterpillar replacement parts.
Also, the independent garages often didn’t complete a full service and only did the minimum repair that was necessary to keep the equipment working.
Undertaking an ecosystem mapping exercise, with the Cambridge Service Alliance at the University of Cambridge, helped Finning to look at these independent garage competitors in a different light as potential collaborators or even customers.
Finning and Caterpillar remotely monitor vehicles, with data being captured on the health of the vehicles and engines to help with diagnosing problems. Through GPS positioning data, Finning was able to see equipment moving from construction sites to independent garages.
At this point, Finning saw the opportunity to contact the garage and offer them a service to help fix the vehicle including:
- Information about the equipment and the problem including diagnostics data
- Shipment of spare parts to fix the problem
- Installation instructions.
By changing the dynamics of the ecosystem, new opportunities for creating and capturing value started to present themselves. While Finning still loses the labour sale, it does secure the parts sale, when previously it was losing both
Other benefits include:
- Independent garages can reduce stock levels as they can now order stock on demand through Finning
- Independent garages receive diagnostic, repair instructions and correct parts to help them fix the vehicle quickly and thereby provide a better service to the customer
- More certified parts are used to fix the vehicle, which improves the quality of maintenance delivered to Caterpillar equipment owners
- Through the closer relationship with independent garages, the garage is more likely to refer the customer to Finning to undertake large and complex repairs such as engine overhauls that the garage can’t do.