Light at End of the Supply Chain Tunnel

While labor shortages are ongoing, there might be a light emerging at the end of the tunnel when it comes to logistics, says an executive with a global farm equipment maker.

Eric Raby, senior vice president of CLAAS of Americas, joined  RealAgriculture’s Kelvin Heppner at Ag in Motion to discuss where CLAAS is at when it comes to supply chain issues.

It will take some time for the company to come out of some inconsistencies in supply, says Raby. From their perspective of costs, he says they’ve done a fairly good job of maintaining costs this year – especially on the combines.

“We produce all of our combines for North America in North America. And by having done that we’ve localized a lot of this. So we’ve actually been able to disperse some of that disruption. And so we’re coming out of it, but we still have a ways to go,” he says. “Are there specific components that are still the issue? Well, it varies. It’s everything from tires to electrical components. Anything that deals with technology still seems to be a little bit erratic, so it’s a little bit all over the board.”

Dealing with all the shortages, setbacks, and delays has really emphasized for CLAAS how important their relationships with dealers are. With that, comes the expectation of transparency through the roadblocks along the way.

They also have diversified some of the suppliers they work with, in order to keep the chain flowing as smooth as possible.

In terms of the crystal ball question, of when will this be resolved, Raby says we have to take a step back, and look at the factors that are going to change, and the factors that aren’t.

“I still think we’re going to have labour shortages ongoing. That’s just a perennial problem that we have,” he explains. “I think logistics is a problem we’re starting to see smoothed out a little bit. And I also think some of the other supply items like components that we have are starting to get a little bit better as well. I think as an industry we’re going to have to keep a close eye on what the demand is, because the demand is still really high.”

Full video interview below.