From its origins as a one-person shop on a central Iowa farm to its current status as a multinational global operation, the Vermeer Corporation has grown in every sense: number of employees, production locations and dealerships, the industries that it serves, and its product portfolio. But through it all it has maintained a focus on its guiding principles – putting people first, building the best, and giving back.
More than 70 members of the Manufacturing Leadership Council saw those principles in action when they toured the “Vermeer Mile,” Vermeer’s 3,500-employee corporate headquarters and primary production facility in Pella, Iowa.
Vermeer traces its roots to a mechanical wagon hoist invented by its founder, Gary Vermeer, in 1948. The hoist could be used to raise the wagon from the front end to dump its contents, such as grain, out of the back. Now on its third generation of family ownership, the company continues to manufacturer products for the agricultural industry, including hay balers, bale processors and wrappers, feed wagons, and mowers. But they also service the utilities industry with such products as pipeline directional drills and trenchers, and the recycling and forestry industry with products like wood grinders and other equipment to process organic waste.
Vermeer defines itself as a low-volume, high-option manufacturer – they produce roughly 22,000 units annually with many customizations. Plant tour attendees were taken through their Plant 7 building – where precision welding and painting take place – and The Center, an under-construction facility set to open in January 2024 that will bring under one roof the company’s operations technical training, team member solutions, and an employee clinic and pharmacy.
Within its operations, Vermeer has a strong dedication to utilizing Lean principles and is now in its 25th year of Kaizen, having completed 3,082 Kaizen events as of September 2023. They have maintained a strong focus on the basics of Lean, including regular report outs, in what they deem as a relentless pursuit of waste elimination. The company’s practices in Lean and continuous improvement feed into its innovation for new products and processes.
In terms of what drives capital and technology investment decisions, the focus is on those that provide the best ROI in addition to labor savings and safety. Generally, projects that deliver ROI in less than 3 years will get scaled. They are also focused on building supply chain resilience, taking a proactive approach to ESG compliance, and flowing information between disparate systems. Additionally, the company is working through an MES implementation and bringing software onto the plant floor for more data-driven decisions.
Some of the technology that Vermeer has deployed includes smart tools that are connected to operator instructions. This includes digital welding instruction software that can help new welders to learn and experienced welders to improve quality. The company has also installed 11 robotic welding cells between its facilities in Pella and Des Moines, helping to reduce unfilled welding jobs while also boosting quality and productivity.
The company has also implemented a limited amount of automation, such as an autonomous material handling system for purchased parts that handles more than 60 daily deliveries to seven assembly lines. Here, company leaders discussed the lessons they have learned while implementing automation: first, there was a need to train maintenance teams for servicing robots, while also training engineering teams on designing for automation. They also advised to bring in an integrator to advise on best practices and to avoid preventable errors.
Vermeer also puts a high premium on ensuring its team members are set up for success. Every new production employee is given one week of Operations training, regardless of past work experience, to build their competence and confidence for working in a manufacturing environment before transitioning to the next step of technical training or to the production floor. This training includes welding, painting, assembly, safety, and machine shop skills. Additionally, they are given instruction on soft skills and professionalism under the acronym of DOTS – Dependable, Open-Minded, Team Player, Safe.
One of Vermeer’s most popular employee benefits is its on-site pharmacy, run in a partnership with Walgreen’s, that provides both prescription and over-the-counter medication and other pharmacy goods at cost. The company also provides a medical clinic open to employees and their families, as well as retirees. The clinic provides family care and can offer referral to specialists if needed and gives employees an opportunity to be proactive about their health. The company said this has helped them to save on insurance costs.
Another popular employee service is the Vermeer Chaplaincy program, a counseling service that is open to all regardless of any spiritual background or belief. The chaplains can provide a listening ear for issues that occur at work or at home and provide suggestions on possible avenues of support. The program was started in 2007 and has provided more than 4,200 individual support sessions in the last year alone.
Finally, the company also offers an on-site childcare facility, known as the Yellow Iron Academy, providing care for children from infants to school age. It is located on the site of the Vermeer family farm and provides children with education to prepare them for or augment their academic careers.
With a history of pride in innovation and building the best products, plus prioritizing team member success, Vermeer stands as a role model for operating a high-performing global manufacturing business while keeping a focus on value-driven leadership.