Andy Koch Andy DeVries Elizabeth Smith David Reynolds

1. Andy Koch • Andy DeVries • Elizabeth Smith • David Reynolds

2. Outline • Introduction • Suppliers • Forecasting • Manufacturing • Inventory • Transportation • Manugistics

3. Deere & Company • founded in 1837 • world’s leading producer of agricultural equipment • international, 160 countries • 37,000 employees • $13 billion in sales last year

4. 5000 Ten Series • general utility, agriculture, landscaping, grounds care • costs about $24,000, sells for $30,000 • produced only at Augusta plant

5. 5000 Ten Series • majority of orders are custom orders • major competitors are Caterpillar and Case-New Holland

6. Supply Chain

7. Suppliers • 200 different suppliers for one 5000 Ten series • 5 from Asia, 10 from Europe, the rest from North America • total parts cost is $20,000 divided equally among the three continents

8. Suppliers • all orders from Asia and Europe sent by ship with a 2 week lead time • orders from North America arrive exclusively by truck within 1-3 days

9. Forecasting • production forecasting based on last year’s stock sales and customer orders • numbers are applied to a forecasting software called Demand Management • numbers are constantly updated and an MRP is run every Sunday night • final data is automatically sent to suppliers

10. Manufacturing • plant located in Augusta, GA • location chosen due to close proximity to Charleston, SC and Savannah, GA • 206,000 square feet used only for production of 5000 Ten series • an average of 60 tractors produced per day

11. Inventory • only parts inventory, no completed tractors are kept at the plant • completed tractors are only held until a full truckload has been produced • the safety stock level for overseas parts is 2 weeks, 3 days for North American parts

12. Inventory • completed tractor inventory exists at dealers • every stock tractor is financed for 6 months • a stock tractor spends an average of 3 months at the dealer before being sold • last year’s ending inventory was 5,569 • last year’s sales 16,003 tractors

13. Transportation • 2 distribution centers located in Rock Island, IL and Camp Hill, PA • all completed tractors delivered in North America by truck, all sent overseas by ship • a full truckload is 4 to 5 tractors • LTL’s make up less than 3% of shipments

14. Transportation • Deliveries within 200 miles are charged a flat rate • additional mileage is billed per mile • tractor are sent directly to dealers 75% of the time • the other 25% are sent to a distribution center and usually combined with other products

15. Manugistics • This proposed system will consolidate trips to dealers and suppliers • Manugistics Transportation Management manages planning and load building at remote locations • creates a unique network by integrating the inbound/outbound/international logistics network

16. Proposed logistics situation Dealers Units Suppliers E-commerce