Andy Koch Andy DeVries Elizabeth Smith David Reynolds

Introduction Suppliers Forecasting Manufacturing Inventory Transportation Manugistics Outline

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

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

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

Supply Chain

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

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

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

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

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

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

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

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

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

Units Dealers Suppliers E-commerce Proposed logistics situation