AGCO at a glance
With more than 20,000 employees at 54 manufacturing facilities and 32 after-sales locations in six continents, AGCO is one of the world’s largest manufacturers and distributors of agricultural equipment. AGCO’s range of products from tractors and combine harvesters to grain and seed storage, and handling systems including well-known brands such as Challenger, Massey Ferguson, Fendt, Valtra, and GSI. Since its inception in 1990, AGCO Corporation has continued to enhance its portfolio through acquisitions, making the AGCO global supply chain particularly complex.
In order to streamline and future-proof its existing logistics operations, AGCO collaborated with 4flow ,a neutral partner for logistics software, optimization, and management, to successfully develop and implement the award-winning AGCO Smart Logistics initiative. In the space of five years, AGCO and 4flow utilized proactive and dynamic network management to create a single, fully-integrated global supply chain with significant improvements in network transparency, performance, and transportation cost savings.
The impetus for digitization
AGCO was not immune to the challenges of an increasingly complex global market, especially on account of the company’s broad exposure with its portfolio of more than 5 brand names. AGCO’s multi-brand strategy and long road of acquisitions created an increasingly complex series of logistics challenges –the growing levels of product complexity driven by local, regional, and global product requirements in addition to a wide spectrum of parts, resulted in increasing levels of complexity across the AGCO global network.
A historical decentralized sourcing approach, coupled with a wide range of logistics maturity across the global supply chain, resulted in a number of major opportunities including transparency, standardization, tools, systems, process, performance levels, and network economies of scale. Another contributing factor was the seasonal nature of the agricultural equipment market and the resulting high volatility.
These complexities, coupled with the rapid growth across the AGCO global network, signaled that a long-term strategic solution was required to drive sustainable global performance improvement levels, drive out significant cost, and increase transparency levels, while enabling a competitive advantage in an increasingly complex global market.
The Smart Logistics innovation roadmap
The company identified supply chain management as a critical success factor in the challenging market of agricultural equipment manufacturing.