Cooperative Competition In Logistics

Caterpillar Logistics Services and Schneider Logistics are taking coopetition to a new level. Caterpillar Logistics, a subsidiary of heavy-equipment manufacturer Caterpillar Inc., will use Schneider's Sumit application suite to provide supply-chain and transportation management services for its parent company and for its 40 external manufacturing clients.

"We look at it as coopetition, but we are happy to provide technology to people who can benefit from it," says Schneider CIO Steve Matheys. The two companies have different core competencies: Schneider's is logistics and end-to-end supply-chain management and Caterpillar Logistics' is warehouse management and transportation. Caterpillar is expanding its logistics and supply-chain offerings.

Matheys says the decision to offer its logistics software on a hosted basis was prompted by companies that are reluctant to outsource the management of their logistics operations, including warehouse planning, engineering and management services, as well as inventory management, transportation management, and real-time materials track and trace.

Those services are Schneider's bread and butter with customers like General Motors's service parts operation, Ford Motor, and Ocean Spray. Under its agreement with Schneider, Caterpillar Logistics will use the same logistics tools Schneider uses to manage its own customers. Caterpillar Logistics' customers include automakers Ford, BMW, and DaimlerChrysler. Schneider will host the applications for Caterpillar Logistics in a five-year deal. The value of the deal was not disclosed.