We are living in uncertain times and people are heavily affected by the coronavirus 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. Digitalisation is currently booming, and without our Connected Support systems, dealers would not have been able to keep machines running in the field while keeping a safe distance from operators. They are successfully using a range of connected tools to remotely monitor and proactively service machines to increase uptime.
Over more than 180 years our company has constantly changed and developed to become the world’s largest and most successful agricultural machinery manufacturer. Today we are announcing another big change and I want to provide you with a bit more background. John Deere is becoming a Smart Industrial Company – what does this mean?
In the future, John Deere will no longer just be selling individual machines. We are moving towards being a production system based organisation. These systems cover solutions from post-harvest up to the next harvest by unlocking the economic and ecological benefits and eliminating waste and inefficiencies. We will not only offer solutions that optimise the cost of machinery, but we will also address cost opportunities throughout the whole production system. Our focus will be on Corn & Soya, Small Grains, Cotton & Sugar, Dairy & Livestock as well as High-Value Crops.
Customers will no longer purchase ‘stand-alone solutions’. They will get integrated solutions and will benefit from stronger cooperation with external companies that are specialists in the business of plant protection, fertilisers, consulting, software solutions etc. More than 160 of them are already connected to John Deere’s web-based Operations Centre. As a result, customers can significantly reduce their costs, because the depreciation of machinery alone accounts for only 10 to 20 per cent of total production costs in each of the production systems. By also addressing the other 80 to 90 per cent, the cost saving potential for fertilising, plant protection etc is much higher.
Interestingly most of our customers already think and act in terms of production systems and our advanced technology dealers also sell solutions for these, so our new organisation will reflect how our customers and dealers think and how their businesses are structured.
This brings us to the second pillar of our new corporate structure. You received a first impression of this approach in the Future Technology Zone at Agritechnica 2019 and we have already declared 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. This smart industrial strategy will help farmers and contractors to run their businesses more efficiently and sustainably.
Life cycle solutions
Our customers also no longer look at machinery in isolation. They want to know the total costs of ownership for the production life cycle. With John Deere FarmSight solutions such as the Fuel Guarantee Programme and PowerGard Maintenance Contracts, we have achieved a lot in recent years. In the future, together with our dealers, we will offer complete life cycle solutions that will provide customers with more planning security and a better overview of their actual production costs.
The world is changing, and John Deere is continuing to transform how it operates to build a more customer-driven and streamlined organisation. This new development is one of the biggest organisational restructurings in our 183-year history. Farmers around the world are faced by major challenges in terms of conservation of resources, profitability and environmental protection. Digitalisation is an important enabler to solve these challenges. As a Smart Industrial Company, we want to make our contribution and make both ourselves and our products and services smarter and more agile.