Maury V. Salz 2016-10-25 00:20:27
I have worked over 30 years for three major agricultural equipment manufacturers (John Deere, Case, and CLAAS) in product development centers and production operations around the world. During my career, I have worked on a wide range of undertakings, from advanced engineering projects to production line maintenance within each company’s worldwide operations. Today, I lead CLAAS North American production operations as President of CLAAS Omaha in Omaha, Nebraska. The Omaha site is the North American headquarters for sales and production operations and where CLAAS’s North American team pursues the globalization process for its North American produced products. The opinions expressed in this article are not supported by facts and figures but are rather my own views, based on intuition. This viewpoint, which I present for your consideration, was developed from years of experience in agricultural mechanization. In order to use the past to project a future vision, we need to recognize the factors that influence the trajectory. For agricultural equipment, those factors are labor availability, financial risk, and the global infrastructure. First, labor availability is decreasing worldwide, so more work per person will need to be done regardless of whether that work is done in Asia or North America. Next is the need of original equipment manufacturers (OEMs) to improve the cost structure and reduce the financial risk of their products worldwide, which is being demanded by their shareholders. Additionally, the technology that supports precision farming is growing very quickly and will soon become a global demand. Future product designs will require consideration of each of these trends, which I believe will reduce the physical size of all wholesale equipment to a smaller scale. The trend toward smaller The point I want to make is that globalization’s impact over the next 25 years will cause a reverse trend in future ag equipment development. Historically, “big iron ag” has trended toward development of larger equipment. Moving forward, the ag equipment industry will start to reverse equipment size in the direction of smaller-scale machines, driven by the trends that I described above. Up to now, the trend toward ever-larger equipment in North America and Europe has been based on the need to accomplish more work with less human labor because of the diminishing labor force available in the farming community. To operate one product (tractor, combine, etc.), only one person was needed at the controls. If that one person needed to do more, the machine just needed to get more powerful, wider, longer—in a word, bigger. This “build it bigger” trend has been lagging in Russian and China, but it’s now proceeding quickly as those countries, and others, have started to adopt Western countries’ product developments. This adoption comes naturally as communication has become faster and easier. In today’s hyper-connected world, all content can be shared anywhere in real-time. So, ag product developers can discover the latest trends almost instantly, and change in the future will proceed even faster than in the past. In recognition of the shrinking labor force, indications are that each OEM has its own version of a smarter operating system in development. Based on these systems, future products will incorporate semi- and fully autonomous features that will eventually lead to partially or totally autonomous machinery. Therefore, each product’s architecture will be smarter, and each configuration will have a wider range of possible specifications. Our end customer, the farmer, will be able to operate multiple units simultaneously to complete more farming operations than today’s farmer. These multi-unit fleets will be tailored for the specific needs of global customers and will also contain more common components. At the same time, OEM product costs per unit of work will need to be reduced—or better stated, optimized. Each OEM is continuously looking for lower-cost designs, taking advantage of common parts that are more frequently used and the lowest costs for production and logistics. Smaller platforms with smarter interfaces will allow global production in multiple localized configurations. Those configurations will be based on a core design that can be customized for each production site. The smaller platforms will have a range of smart technology depending on the local country and customer needs. This localization will allow manufacturers to produce high volumes of common parts in one or two factories and efficiently ship materials to other operations that produce lower volumes of assembled equipment. This strategy allows each company to reduce its foreign currency exchange risk and minimize its capital investment. In the global village, OEMs will build machines that fit diverse applications in crop management, production, and data collection. Due to the limited road and field infrastructure in many developing countries, smaller machines will be preferred for these applications because of their versatility, greater mobility, and lower cost. In the future Our end customer, the farmer (I think this term will soon change to “operation manager”), will require more precision farming technology to increase the output per unit area. We usually think about precision farming as a North American or European practice, which is mostly true today. However, with all the social media and other means available for communication, precision farming is growing fast in the rest of the world. For example, think about how quickly the smart phone market grew to surpass landline communication. If we had to build our phone system over again, we wouldn’t bother with landlines at all! I think there is a lot of evidence to support the argument that farm labor, OEM financial risk, and global infrastructure are driving the future of agriculture equipment development— which will see a reverse trend to smaller, more versatile, and more economical machinery. What’s your vision? Do you agree that our machines will get smaller in the future? ASABE member Maury V. Salz, President, CLAAS Omaha, Omaha, Neb., USA, email@example.com.
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