Caterpillar Financial Services

Corporation U.S.

With total U.S. assets exceeding $14 billion and managing

more than 100,000 contracts monthly, Caterpillar Financial

Services Corporation U.S. (CFSC) is the second-largest

captive-equipment lender in the United States. With a U.S.

workforce of nearly 750 employees, CFSC has more than $1

billion in revenues as the financial services business unit

within Caterpillar Inc., a manufacturer of construction and

mining equipment, gas and diesel engines, and industrial

turbines. Based in Nashville, Tenn., CFSC was incorporated

in 1981 to finance Caterpillar’s lift trucks. By 1985, the

company was providing financing for the complete line of

Caterpillar products as well as financing services to users and

dealers of Caterpillar equipment and the Caterpillar Business

Units. From 1998 to mid-2003, CFSC has increased assets 34

percent and profit 54 percent while industry performance has

declined 21 percent and 35 percent respectively. CFSC has

maintained strong ratings from the top three credit rating

agencies.

Never-Ending Journey to

Excellence

As a service organization based within a large

manufacturer, Cat Financial measures its success by the

success of Caterpillar and its customers. That is why CFSC

decided early on that “excellence” was going to define the

company’s culture and be its guiding principle. Today,

CFSC’s business model integrates excellence into its vision,

mission, six critical success factors, and shared values. 

Tellingly, customer satisfaction and employee satisfaction

are the first and second of CFSC’s critical success factors.

The others are growth, leadership, reliable returns, and

world-class core processes. Leaders, managers, and

employees work together to develop key business strategies

and annual plans linked to these six factors and performance

in these areas is continuously monitored.

True to its mission of “helping Caterpillar and our

customers succeed through financial service excellence,”

CFSC maintains a constant focus on process improvement.

Tools such as 6 Sigma, a highly disciplined, data-based

methodology, help CFSC prioritize and manage projects,

design products, and improve processes. Ninety-seven

percent of employees are trained in 6 Sigma procedures for

designing new processes, called DMEDI (Define, Measure,

Explore, Develop, Implement), and for improving existing

ones, called DMAIC (Define, Measure, Analyze, Improve,

Control). Specially trained employees called Black Belts,

experts in the 6 Sigma process and team facilitation; Green

Belts, subject matter experts; and Yellow Belts, trained in

basics of 6 Sigma, comprise teams of employees that

implement these procedures. 

Since 1993, CFSC also has been using the Baldrige

performance excellence criteria as the overall framework to

assess the organization and guide improvement efforts. Other

improvement and analysis tools include a four-year strategic

2003

Award Winner

Highlights

• CFSC’s total contribution to Caterpillar Inc.’s total

earnings has increased from 5.6 percent in 1998 to more

than 25 percent in the first nine months of 2003.

• Customer satisfaction levels exceed industry and

American Customer Satisfaction Index world-class

benchmarks.

• CFSC’s 6 Sigma improvement efforts have led to

significant after-tax savings since the company 

embraced the methodology in 2001. 

• In 2002, 80 percent of employees said they would

recommend CFSC as a good place to work. The 

national norm is 55 percent.

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plan, a one-year tactical plan, and a balanced scorecard of

measures to assess organizational performance. 

CFSC’s 6 Sigma improvement efforts have led to

significant after-tax savings since the company embraced the

methodology in 2001. From 1997 through mid-2003,

productivity improved by more than 10 percent and the

current level of performance is nearly 35 percent better than

the average of the industry’s top 100.

Investing in Technology

Handling over 100,000 contracts monthly and working

with customers and equipment dealers who demand accurate,

timely, complete, and responsive service have led CFSC to

invest in leading-edge information-management systems and

hardware. The company was one of the first in its industry to

launch three Web-based services available 24/7:

FinancExpressSM helps to streamline financing by automating

quotes, credit approval, and document preparation;

AccountExpressSM gives customers and dealers online access to

accounts; and CustomerExpressSM provides employees and

dealers one convenient portal to customer information. All

employees have access to these services through either a

networked desktop or laptop personal computer. 

While access to data is necessarily liberal, it also is tightly

controlled. Full-time security coordinators carefully manage

the processes for granting access and quickly remove rights

no longer required. Other systems and programs are in place

to ensure information integrity, accuracy, and reliability and

to protect confidentiality.

Investments in technology along with a continuing focus

on excellence and process improvements are helping CFSC

achieve its corporate vision: “to be a significant reason why

customers select Caterpillar worldwide.” Seventy-nine

percent of customers considering the purchase of Cat

equipment say that CFSC products and services favorably

influenced their decision. Research also verified that CFSC

exceeded customers’ expectations twice as often as

competitors. Only 1 to 2 percent of customers were dissatisfied

with the service or options they received from CFSC.

Satisfaction of end users, one of three key customer

groups, has increased from 89 percent to 93 percent over the

past five years in the Equipment Division. User satisfaction

with Loan Origination in the Marine Division, which was

already high at 91 percent, increased to 97 percent from 1999

to 2002. In the Power Division, satisfaction rose from 

90 percent in 2002 to 93 percent in 2003. These levels of

performance exceed industry and ACSI (American Customer

Satisfaction Index) world-class benchmarks.

Environment of Growth and

Achievement

Employee satisfaction is second only to customer

satisfaction as a critical success factor, even ahead of growth

and reliable returns. This is evident in the company’s

commitment to professional development—more than $2

million was spent on training in 2003. Investment in

employee recognition programs, such as Eye-on-Quality

Awards and Cat Bucks—which allow employees to instantly

recognize other employees—has increased by nearly four

times, from $84,000 in 1999 to $263,000 in late 2003. CFSC

also recognizes employees with incentive pay, which is paid

quarterly and directly aligned with company goals.

Improvements in employee satisfaction are helping CFSC

meet its strategic goal of attracting and retaining skilled

employees. The overall Employee Satisfaction Index has

risen from 67 percent in 1995 to 89 percent in 2003.

Employee satisfaction with the job exceeds the financial

services norm and is consistent with the score achieved by

best practice organizations. Employee retention has

improved four points to 94 percent since 2000, with the

current level of performance significantly better than the top

quartile comparison. In 2002, 80 percent of CFSC employees

recommended the company as a good place to work, up from

67 percent in 2000. 

CFSC is committed not only to employees’ satisfaction,

but also to their well-being. An on-site, fully staffed fitness

center is used by 60 percent of CFSC employees. Ninetythree percent of employees participate in the Caterpillar

Healthy Balance program, which earned a national 

C. Everett Koop Award for Wellness Promotion in 1999 and

the Wellness Councils of America “Well-Workplace Award” 

in 2002.

Caring for Others

As part of its shared value of “caring for others,” CFSC

provides assistance to both local and international

organizations, including The United Way, the Red Cross,

and the Salvation Army. Giving to the United Way exceeds

$300,000 annually, earning the company that organization’s

highest honor, the Iris Circle Award. Four times a year, Cat

Financial hosts blood drives, which enable the Red Cross to

assist more than 4,000 patients. More than 150 gifts for

children and the elderly were provided through the Angel

Tree program. CFSC also fosters professional development

of local youth through support to Wharton Elementary

School, “Exchange City” which teaches about business and

free enterprise, and the “School to Work” program for high

school students.

For more information, contact:

Caterpillar Financial Services Corporation U.S.

2120 West End Avenue

Nashville, TN 37203

Telephone: (615) 341-1000

Fax: (615) 341-1038

E-mail: Baldrige1@cat.com

Website: www.CatFinancial.com/Baldrige

(Note: Information in this profile of CFSC was current as of May 2003.)

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