Andy Koch

1

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

2
Outline

• Introduction
• Suppliers
• Forecasting
• Manufacturing
• Inventory
• Transportation
• Manugistics

3
Deere Company

• founded in 1837
• worlds 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 years 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 years ending inventory was 5,569
• last years 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
• LTLs 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