At a recent John Deere press briefing Mark von Pentz; President John Deere Ag & Turf Division said:
We are living in uncertain times and people are heavily affected by the Corona Pandemic. John Deere has been “sailing through these times” pretty smoothly and our business outlook right now is much better than a few weeks ago.
Thereby digitalization is currently extremely booming. And without our Connected Support Systems, dealers were not able to keep machines running in the field while keeping the distance to drivers. They use the connected tools to remotely monitor and proactively service machines to increase uptime.
In more than 180 years our company has constantly changed and developed to become the largest and most successful agricultural machinery manufacturer. Another one of the big change moments is announced these days and I want to provide you with a bit more background. John Deere is becoming a Smart Industrial Company! What does it mean?
In the future, John Deere is no longer just selling single machines. We are moving towards a production system organization. These systems cover solutions from after the harvest up to the next harvest by unlocking the economic and ecologic headroom or eliminating the waste and inefficiencies. We will offer solutions that do not only optimize the cost of machinery, but we will address cost opportunities that exist on the entire cost sheet to product. The production systems we focus on will be Corn&Soya, Small Grains, Cotton&Sugar, Dairy & Livestock as well as High Value Crops.
Customers will no longer purchase “Stand Alone Solutions”. They get integrated solutions and will benefit from a stronger cooperation with external companies that are in the business with plant protection, fertilization, consulting, software solution etc. More than 160 of them are already connected to John Deere’s Operation Center. Customers can significantly reduce their costs. Because the depreciation of machines alone accounts only for 10 to 20% of total production costs in each of the production systems. By addressing also the other 80 to 90 %, the cost saving potential for fertilization, plant protection etc. are much higher.
Interestingly most of our customers already think and act in productions systems and our advanced dealers also sell solutions for production systems, so our new organization reflects how our customers and dealers think and are structured.
This brings us to the second pillar of our new corporate structure. You have received a first impression of this approach in the Future Technology Zone at the AGRITECHNICA and we have already expressed that we will invest in automation, autonomy, electrification and artificial intelligence.
John Deere will develop a family of “smart” machines, systems and solutions. The focus will be on innovative hardware, integrated software solutions, connectivity, data platforms and a variety of applications. The smart industrial strategy will help farmers and contractors to run their business more efficient and sustainable.
And customers do not longer look on the machines alone. They want to know the total costs of ownership for the lifecycle.
With the John Deere FarmSight Solutions “Fuel Guarantee”, “Maintenance Contracts” etc. we have achieved a lot in recent years. In the future, however, together with our dealers, we will offer complete lifecycle solutions. That will provide customers with more planning security and a better overview on the actual production costs.
The world is changing, and John Deere continues to transform how it operates to build a more customer driven and streamlined organization for the future. It is one of the biggest organizational restructurings in our 180 years history.
Farmers around the world are faced by major challenges in terms of conservation of resources, profitability and environment protection. Digitalizing is an important enabler to solve the challenges. As Smart Industrial Company, we want to make our contribution and make ourselves and our products and services smarter and more agile.