According to an Aug. 23 report from SupplychainDive, John Deere is taking multiple steps to improve its components supplies and improve its inventory levels.
This includes dual-sourcing components, investing in additional manufacturing capacity for some of its suppliers and keeping a larger inventory of raw materials. This follows a rise in Deere's order backlog, which it hopes to tackle through higher production rates.
“Our factories are focused on finishing and shipping the remaining machines in the fourth quarter which will help our progress toward restoring productivity and efficiencies going into next year,” said Rachel Bach, manager of investor communications, said during Deere's third quarter earnings call.
John Deere has stated it will maintain higher production rates over the next two quarters, with executives noting the company’s been able to achieve its highest production line rate of the year.
“Any time we have to touch machines or move them in our factories more than once, it comes at a cost,” said Joshua Jepsen, deputy financial officer at John Deere, during the earnings call. “In that respect, 2022 has been a challenge, given the ramp in demand juxtaposed with the lost production in the first quarter and a challenging supply environment. So, we’ve really been chasing production all year as a result.”