Thursday, January 28, 2016

Caterpillar Inc. deal could double size of Grand Rapids start-up

GRAND RAPIDS, MI — A Grand Rapids start-up has landed a deal with Caterpillar Inc. that is expected to nearly double the firm’s 20-person staff in about a year.

The Fortune 50 company announced the strategic alliance with Modustri on Wednesday, June 17.

The two will work to develop mobile software that can inspect heavy equipment in the field for needed repairs, completing the task in hours instead of days.

The Peoria, Ill.-headquartered company says the partnership will help its dealers and customers by measuring wear on its equipment’s parts to reduce costly downtime.

The Modustri hardware and software can “help dealers interact with customers, build trust and plan ahead for maintenance and parts replacements,” said Brian Steketee, 36, the firm’s founder and chief executive officer.

A successful partnership with Caterpillar will raise the profile of Modustri and put it in a new stratosphere of business opportunity. Last year, the publicly-traded Caterpillar reported sales of $55 billion and profits of $14.5 billion.

The year-old company’s breakout product is a wear measurement device, an ultrasound measurement hardware that monitors machinery and predicts when major parts or components will need repair. The heads-up can eliminate costly, unscheduled downtime.

“Our relationship with Modustri will allow us to take advantage of emerging technology that gives our customers more information on parts and components to maximize uptime. The days of being reactive are over,” said Doug Hoerr, vice president of the Reman, Components and Work Tools Division of Caterpillar, in a statement.

The technology is expected to provide real-time data to Caterpillar dealers and customers who can track when parts need to be replaced — including parts made by other suppliers.

Caterpillar has led the way in bringing technology to the heavy equipment industry. The deal with Modustri is the latest in a growing string of tech investments and partnerships for Caterpillar, according to Equipment World.

“Emerging technologies are changing the way we can help customers maintain a competitive advantage and achieve new levels of equipment productivity and profitability. Our alliance with Modustri will be key in making this happen,” said Greg Folley, vice president of the newly formed Analytics & Innovation Division of Caterpillar.

The firm caught the corporate giant’s attention for its work with a Cat dealers, the Indianapolis-based MacAllister Machinery. Modustri developed a tool MacAllister technicians could take out in the field for data gathering.

In the future, those visits could be eliminated. Instead, the mammoth machines would be outfitted with wireless sensors that transmit data much like the wearable technologies people use to monitor their heart rate or physical activity.

Steketee, who studied business administration and marketing at Colorado State University, is a self-taught techie.

“It has always been a passion of mine,” said the East Grand Rapids native.

What might be most surprising about this high-tech success story is that Modustri didn’t launch out of the Start Garden incubator like other tech firms. Rather the idea was nurtured in the JEM Mentoring program.

Former Perrigo CEO Mike Jandernoa’s program pairs former or current CEOs with younger leaders of smaller companies to provide a listening ear and business counsel.

In Steketee’s case, he realized the need to shift gears from being a provider of digital services to a developer of tech products. Last year, he sunset his engineering digital solutions firm, Agent X, to launch Modustri and bring to market an idea he had been incubating for a year.

Steketee credits his JEM mentor Patrick Mullen, a former general manager of WXMI Fox 17 and board member of Compatico, a Grand Rapids-based office furniture supplier, for guiding him as he made the decision.

“It’s an incredible program. I was lucky to get accepted into it,” said Steketee, who completed the three-year program in August.

RELATED: Gov. Rick Snyder lauds Grand Rapids CEO mentoring program, promotes Michigan to young people

Shandra Martinez covers business for MLive/The Grand Rapids Press. Email her or follow her on Twitter @shandramartinez.