The Clayton assembly plant is the last step in a manufacturing process that begins in Caterpillar’s component plants and third-party suppliers located around the world. The general flow of material can be broken into three basic steps: requirements planning, logistics, and assembly.

Requirements Planning

Caterpillar normally builds machines to match specific customer orders.  Production lead times for machines are typically longer than customers are willing to wait.  To bridge this gap, the plant uses machine sales forecasts by model to produce the right components in anticipation of an order for a machine.  Clayton determines piece-part requirements based on the sales forecast and then communicates the piece-part requirements to suppliers and component plants. 

Suppliers deploy the appropriate resources to build the forecasted number of parts, plus or minus a predetermined allowance for forecast error.  When Clayton needs a component part, an order release tells the supplier the exact amount of material required and its due date into the assembly plant. 

Logistics

When the assembly plant receives an order for a machine, Clayton allocates a production slot to fill that order.  Now the exact components must be ordered and delivered to the plant in an orderly and cost effective manner.  Parts can generally take three paths into the plant depending on their size, cost, and variation among machines built. 

·        For large, high-dollar components, daily deliveries from suppliers are necessary to cut down on inventory storage space and costs.  These items typically can fill an entire truck with just one day’s production, and are taken directly from the truck to the assembly line. 

·        Medium sized parts are generally delivered and stored in batches.  These parts do not require excessive and shipping several days of production at one time can minimize freight costs.  These parts generally are stored in a central area and moved to the assembly line as needed. 

·        Many small common parts such as bolts, washers and fittings can be stored in bulk right on the assembly line.  Typically Clayton purchases these parts in bulk, delivering them at one time to the assembly areas consuming the parts.  Using a Kanban system, when the assembly process consumes a container of parts, a material-planner orders another container from the supplier.

Assembly

Once the material arrives the assembly process can begin.  The assembly line layout minimizes material handling.  Base frames enter the building on the receiving floor and are taken directly to the first operation located adjacent to the receiving area.  As the frame moves down the assembly process, assembly bays add components to complete the machine order. 

Major components, such as engines and transmissions, are delivered to sub-assembly areas, bays, located next to the main line.  These components are “dressed out” in the sub-area and dropped into the frame as a complete unit. As the incomplete frame moves down through the assembly zones, assembly workers attach various components as called for by the machine shipping order.  

After assembling all the required components the machine is tested to ensure it will meet specifications.  The machine is connected to several pieces of diagnostic equipment that records different statistics about the machine to assess the overall assembly quality.  At this time adjustments are made to bring the machine in-line with specifications and the machine is moved to the paint/decal area for final preparation. 

The paint/decal area is the last step in the process before shipment.  The machine is coated with the standard “Caterpillar yellow” paint, dried, cleaned and moved to the shipping floor for eventual shipment to the dealer responsible for the order.