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<ul><li><p>LoweringComponent CostsThats My Final Answer!</p><p>BIU July 2001</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>How Can We Lower ComponentCost Per Hour? Reduce component repair &amp; rebuild costs Increase component lives</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Questions To Consider Whats more important to component</p><p>lifedesign, maintenance or application? Does the application of a machine affect</p><p>component lives and repair costs? How significant are application changes to</p><p>component lives and repair costs?</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Questions To Consider Does good maintenance really enhance</p><p>component lives and reduce costs? Iscontamination control important?</p><p> What has happened in the ComponentManagement arena since BIU in 1997?</p></li><li><p>LoweringComponent CostsThen &amp; Now</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Then (In 1995) Unsatisfactory major mining component life Noncompetitive component rebuild costs Product reliability issues MARC health issues</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Unsatisfactory Component Life Original life too low in difficult applications Component second life 75% of original life Component third life 45% to 55% of</p><p>original life Payload contributed</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Causes Of Second And ThirdComponent Life Shortfalls Dealer rebuild process Reman quality Component R &amp; I process Others?</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>What Is The MAJOR ContributorTo Component Life Shortfalls?</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p> Dealer rebuild process Reman quality Component R &amp; I process</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Component R &amp; I Process</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Dealer Audit Results</p><p>30</p><p>40</p><p>50</p><p>60</p><p>70</p><p>80</p><p>90</p><p>100</p><p>SHOP</p><p> - 10%</p><p>CLEA</p><p>NLIN</p><p>ESS -</p><p> 20%</p><p>COMP</p><p>. ASS</p><p>M. - 3</p><p>5%</p><p>TEST</p><p>ING </p><p>- 15%</p><p>R&amp;I - </p><p>20%</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>What Did We Do? Documented R &amp; I process Developed CGM rebuild/installation</p><p>certification process Increased emphasis on R &amp; I process control</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Completed CGM Certification Audits1999: Finning Chile, Cashman, Westrac,</p><p>Hastings Deering, Gecolsa, Wheeler,Finning Canada</p><p>2000: Cat Reman Facilities, Wyoming,Rust, Ziegler</p><p>2001 YTD: Empire, Sotreq, Macrosa</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>10/10/20 Payload Policy</p><p>No more than 10% of payloads mayexceed 1.1 times the target payload,</p><p>and NO single payload shall everexceed 1.2 times the target payload.</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Component Repair/RebuildCost Reduction Develop repair/rebuild strategy Enhance repair before failure capabilities Establish contamination control standards</p><p>and procedures</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Repair/Rebuild Strategy Dealer rebuild is the preferred source for 1st</p><p>and 2nd rebuilds when volume justifies Reman for 3rd or other high value rebuilds Cat to provide reman piece parts at</p><p>competitive prices to support dealer rebuilds</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Now (In 2001) Generally, lives of original components have</p><p>increased 20% to 30%, depending on application Generally, lives of rebuilt components have increased</p><p>to 85% to 90% of new Component Rebuild Certification Program producing</p><p>desired results Value of the Certification Program recognized by</p><p>customers worldwide Continued focus on the R &amp; I process</p></li><li><p>LoweringComponent CostsContamination Control</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>What Is ContaminationControl About?</p><p>Why Is It ImportantTo Our Customers?</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Contamination Is The Top CauseOf Premature Wearout</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Believers Newmont Exxon-Mobil Morrison-Knudsen Simplot Billiton Caterpillar Inc.</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Effects Of ContaminationHydraulic System experts attribute 75% to85% of all component failures to particlecontamination in the fluid and NOT a weaknessin the system components.</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Component Life vs.Contamination Level</p><p>ISO22/19</p><p>21/17</p><p>20/15</p><p>19/16</p><p>18/15</p><p>17/14</p><p>16/13</p><p>15/12</p><p>14/11</p><p>13/10</p><p>12/09</p><p>Component Life Over Time</p><p>---</p><p> ----------</p><p>----</p><p>Clean New Oil</p><p>Con</p><p>tam</p><p>inat</p><p>ion</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>What Is Contamination?</p><p>Anything in a fluid thatdoes not belong</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Where Does ContaminationCome From? Generated WEAR Factory or Rebuild Assembly Process Installation Process System Debris from Previous Failure Fluid Storage and Refill Practices</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>ISO Standards</p><p> 29 ISO Levels Particle count doubles at each level</p><p>Contamination Particle CountIn 1 mL of Fluid</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>ISO Code ChartISO Code</p><p>232221201918171615141312</p><p>Number of Particles / mL40,000 - 80,00020,000 - 40,00010,000 - 20,0005000 - 10,0002500 - 50001300 - 2500640 - 1300320 - 640160 - 32080 - 16040 - 8020 - 40</p><p>----- Very Clean (Fill Oil) -----(16/13)</p><p>---- Clean (Hyd. System) ----(18/15)</p><p>----------Very Dirty ----------</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>ISO Cleanliness Code Explained in ISO Standard 4406 Expresses amount of contaminant in</p><p>1 mL of fluid</p><p>15 microns5 microns2 microns</p><p>AC Calibration</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>ISO Cleanliness Code Caterpillar uses the 2 factor code:</p><p>Express as X/Y whereX # particles &gt; 5 micronsY # particles &gt; 15 microns</p><p>e.g. ISO 18/15</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Cat HydraulicSystem Clearances</p><p>Particles You Cannot See Are Harmful!</p><p>MICRONS</p><p>Smallest VisibleTo The Eye</p><p>40</p><p>Human Hair</p><p>80</p><p>2Fuel</p><p>530</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Caterpillar Fluid Cleanliness StandardsFill Oil ISO 16/13</p><p>Fuel ISO 20/17/13</p><p>Hydraulic Systems ISO 18/15</p><p>OHT Final Drives / Diff ISO 21/17</p><p>Transmissions ( Electronic ) ISO18/15</p><p>Transmissions ( Mechanical ) ISO 21/17</p><p>Engine Rollout ISO 18/15</p><p>Pumps &amp; Governors ISO 16/13</p><p>Injector Calibration Fluid ISO 15/13</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Particle Counter</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Portable Contamination Kit</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>150 GPMKidney Loop Cart(5W-90W)183-9301</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>OHT Axle/Final Drive/WheelGp./Diff. Off-Line Filtering</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>90 GPMKidney Loop Cart(5W-50W)188-3242</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>90 GPMKidney Loop Cart(5W-50W)194-2897</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Transfer Cart and FluidRecovery System</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>When Do We Use Filter Carts? When contamination exceeds specs With extended oil changes After any failure which created debris After rebuild break-in Fuel and oil dispensing</p></li><li><p>Worldwide Filter Cart Sales</p><p>NACD 37</p><p>COSA 20</p><p>CACo 21</p><p>CAPL 24</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>What percent of your customerspresently employ contaminationcontrol as part of their normal</p><p>maintenance program?</p></li><li><p>What do these customers sayabout the benefits of a</p><p>contamination control program?</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>How do you plan to increasecustomer awareness of the</p><p>importance of a contaminationcontrol program?</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>What Is Contamination Control? Awareness, Measurements, Standards Build it Clean, Keep it Clean</p><p>Why Is It Important? Helps maximize component life Helps get lowest cost-per-ton</p></li><li><p>LoweringComponent CostsApplication Management</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>How does machine applicationinfluence component life?</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>What application factors do YOUthink affect component life?</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Application Factors Like</p><p> Payload- Overloading, Underloading- Distribution10, 10, 20 Rule</p><p> Haul road condition Haul road profile Mine operational efficiency</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Powertrain Repair Cost Breakdown</p><p>793 Mining Truck</p><p>40%</p><p>4%9%7%</p><p>40% EngineConverterTransmissionDifferentialWheel Groups</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>A Case Of Overloading?</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Payload problems?</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>An Increase In Payload Causes: Decrease in component lives/Increase in costs</p><p> Wheel GroupsSignificant DifferentialsSignificant EnginesMay or May Not Be Significant</p><p> Slight increase in production Insignificant change in fuel efficiency</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Where is the haul road?</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Lowering Component Costs</p><p> Component lives? Machine productivity? Fuel efficiency?</p><p>What is the impact of haul road rollingresistance changes on:</p><p>And</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Are the changes significant?</p><p>And</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>What additional costs willthose changes drive?</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>What Is Rolling Resistance? The force that must be overcome to roll</p><p>a wheel over a surface Affected by ground conditions and load Normally 1.5% of GMW per inch of</p><p>tire penetration</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>Increase In Rolling Resistance Causes: Decrease in component lives</p><p> Wheel GroupsSignificant DifferentialsSignificant EnginesMay or May Not Be Significant</p><p> Significant decline in productivityand fuel efficiency</p><p> Increase in MARC costs Significantly higher repair costs</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>An Increase In Haul Road GradeAlone Causes: Significant decrease in differential and wheel</p><p>group lives Minor changes in engine life Minor changes in productivity</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>SummaryWheel Gp/Diff</p><p>LifeWheel Gp/DiffLife Cost/Hr</p><p>EngineLife &amp; Cost/Hr Production</p><p>FuelEfficiency</p><p>PayloadIncrease</p><p>Haul RoadResistance</p><p>Increase</p><p>Haul RoadGrade</p><p>Increase</p><p>SignificantDecrease</p><p>VerySignificantDecrease</p><p>VerySignificantDecrease</p><p>SignificantIncrease</p><p>VerySignificantIncrease</p><p>VerySignificantIncrease</p><p>InsignificantChange</p><p>May or MayNot Be</p><p>Significant</p><p>No Change No Change</p><p>SignificantDecrease</p><p>SlightIncrease</p><p>No Change</p><p>SignificantDecrease</p><p>InsignificantChange</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>What Can You Do? Emphasize the importance of minimizing</p><p>rolling resistance Improve productivity Lower fuel consumption and cost Longer component lives Lower component cost/ton Keep motor graders and wheel dozers running</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>What Can You Do? Be alert to haul road profile changes</p><p> Steeper grades significantly reduce certaincomponent lives and increase cost/hr</p></li><li><p>BIU July 2001</p><p>Caterpillar Confidential Green</p><p>What Can You Do? Emphasize the importance of</p><p>contamination control Higher component lives &amp; lower cost/hr Reduced downtime from unexpected failures</p><p>Title SlideHow Can We Lower Component Cost per Hour?Questions to ConsiderLowering Component Costs ... Then and NowIn 1995Unsatisfactory Component LifeCauses of Second and Third Component Life ShortfallsWhat is the MAJOR Contributor to Component Life Shortfalls?Answers</p><p>Component R&amp;I ProcessDealer Audit ResultsWhat Did We Do?Completed CGM Certifiaction Audits</p><p>10/10/20 Payload PolicyComponent Repair/Rebuilt Cost ReductionRepair/Rebuild StrategyIn 2001</p><p>Contamination ControlWhat is Contamination Control About and Why is it Important to our Customers?Contamination is the Top Cause of Premature WearoutBelieversEffects of ContaminationComponent Life vs. Contamination LevelWhat is Contamination?Where Does Contamination Come From?ISO StandardsISO Code ChartISO Cleanliness CodesParticles You Cannot See are Harmful!Caterpillar Fluid Cleanliness StandardsParticle CounterPortable Contamination Kit150 GPM Kidney Loop CartOHT Axle/Final Drive/Wheel Group/Differential Off-Line Filtering90 GPM Kidney Loop Cart90 GPM Kidney Loop Cart Model #2Transfer Cart and Fluid Recovery SystemWhen do we use Filter Carts?Worldwide Filter Cart SalesWhat Percentage of your Cusotmers Presently Employ Contamination Control as Part of their Normal Maintenance Program?What Do These Customers Say?How Do You Plan to Increase Customer Awareness?Summary</p><p>Application ManagementHow Does Machine Application Influence Component Life?What Application Factors Do You Think Affect Component Life?Application FactorsPowertrain Repair Cost BreakdownOverloadingPayload ProblemsAn Increase in Payload Causes ...Where is the Haul Road?Haul Road Rolling ResistanceWhat is Rolling Resistance?Increase in Rolling Resistance Causes ...Increase in Haul Road Grade Alone Causes ...SummaryWhat Can You Do?</p></li></ul>