As the equipment maker takes advantage of digital instructions, the IoT, and 3D printing, a step-by-step approach, flexibility, and careful employee engagement underpin its Manufacturing 4.0 strategy.
Founded as a one-man job shop on a farm in central Iowa, Vermeer Corporation has a long history of invention, innovation, and continuous improvement. Founder Gary Vermeer invented the wagon hoist in 1943, delighting area farmers and leading to the formation of the Vermeer Manufacturing Co. in 1948.
In the years that followed, Vermeer introduced tree stump cutters, trenchers, hay balers, drills to lay fiber optic cable, and surface excavation machines. Its products came to be known by the phrase “yellow iron”. Today, Vermeer is a 3,500+ employee strong manufacturer of agricultural, underground construction, surface mining, tree care, and environmental equipment.
And, following in Gary Vermeer’s footsteps, the company is now in its third generation of family leadership. In 1989, Gary’s son Bob became CEO. In 2003, Bob’s sister, Mary Vermeer Andringa, took the reins. Mary Andringa also became the first female chair of the National Association of Manufacturers, holding that post from 2011 to 2012. In 2015, Mary’s son Jason was named to head the company.
In our latest Dialogue with a manufacturing industry thought leader, Vermeer CEO Jason Andringa, who is a member of the NAM Board of Directors, sat down with MLC Co-Founder David R. Brousell to talk about Vermeer’s journey to the digital model of manufacturing, including new technologies used in operations, how the Vermeer workforce is adapting to them, and what he sees as the state of future factories and the leadership skills necessary to effectively manage them.
Q: Please explain your role at Vermeer.
A: It’s an honor for me to have the opportunity to extend my family’s legacy of leadership into the third generation. My grandfather founded the business in 1948. Both of my uncles have served in the role of CEO, and right before me, my mom served in the role of CEO. I’m in the role of CEO and am thoroughly enjoying the opportunity to lead this company I’ve known my whole life and have been proud of my whole life.
Q: What excites you most about the role that you’ve succeeded to at Vermeer?
A: Opportunity. Manufacturers in general – Vermeer in particular – have a tremendous opportunity to help solve the world’s problems. Vermeer equipment does tremendous things for the world. It’s used to install underground infrastructure that we all depend on – fiber optic, electric, water, sewer, natural gas, oil.
We also play a significant role in the processing of organic waste, converting it into a form that can be usable and valuable. We have a footprint in agriculture as well. My grandfather invented the round hay baler and it’s a pleasure to continue to play a role in that important space.
“If it feels like we’re swimming in the data now, what’s it going to feel like five years from now?”
Q: What are some of the things that keep you up at night or that you’re concerned about, not only for Vermeer but perhaps for our industry at large?
A: External to Vermeer, global macroeconomic and geopolitical issues are concerns to me, and I’m sure are concerns for all manufacturers. The world is very dynamic right now. Uncertainty is the thing that businesses and markets don’t like. For example, the coronavirus is something that could not have been predicted, yet it has caused supply chains to be disrupted and customer opportunities to evaporate. You can’t predict it, but you have to be ready to be flexible and adapt when the time requires it.
Within Vermeer and the industry, the ever-faster rate of increased customer expectations is a challenge, but it’s a challenge we welcome. Our customers require quicker response times, higher levels of quality, higher levels of efficiency, the ability to see data that shows that their crews are getting more efficient, and that their machines are maintaining uptime. Those are the challenges we like and are part of Vermeer’s heritage and DNA – our commitment to continuous improvement and lean manufacturing.
Q: Picking up on the spirit of continuous improvement, let’s talk about Manufacturing 4.0 and digitization. Where is Vermeer on its digital journey?
A: We’re definitely on the journey. Rather than attempting to implement one holistic system, we’re prioritizing where the greatest opportunity is for us. Then, as we solve or improve a particular need – creating a digital twin of our machines, for example – we’re looking at what our next priority is. Our plan is to use our 20+ years of continuous improvement to connect the digital thread through all of our systems in order to have more common platforms and processes as we gather and utilize more data or deploy more technology. To do this, we have to remain a bit flexible for where our journey is taking us.
Q: Are you doing anything around the Internet of Things, advanced analytics, 3D printing? What technologies do you think are really going to be important for Vermeer going forward?
A: Frankly, everything that you mentioned is something we are working on to one extent or another. We brought in our first 3D printers five years ago. I was first exposed to 3D printing back in 1998 during my time at NASA. It’s not a brand-new technology but the capability has improved dramatically. We started with just one or two 3D printers and now have an entire area dedicated to 3D printers of various capabilities. At first, we used them for prototyping. Then we found we could use them for making custom-built safety devices and tools in our manufacturing processes.We rolled out digital instructions to our assembly teams. So now, rather than having paper binders of assembly instructions with tedious updates, team members now have up-to-date, real time digital instructions at their workstations. They pull up a digital instruction, zoom in if desired, and have whatever level of detail they need.</p?
It’s interesting, because it’s not unusual that team members we’re bringing in now are more comfortable with computers and a joystick than, frankly, turning a wrench. We were concerned that we would be bringing in technology that might be intimidating to our team members and that’s just not the case. They’re actually at least as comfortable, if not even more comfortable, with digital instructions in many cases than they are with hardware, torque wrenches, hydraulic componentry, and electrical componentry. At the same time, we’re also being careful to not leave our experienced team members behind.
Other examples would be the use of AI (Artificial Intelligence) and VR (Virtual Reality) for service, trainings and marketing. With the need to accelerate learning and create experiences, these technologies can really help. From a marketing standpoint, aside from a prospective customer being in the seat themselves, VR can give them an experience without the machine on site.
Q: Assuming that Vermeer is pretty well connected electronically and you’re generating data from different aspects of operations and the business, how well at this point does Vermeer understand the data, analyze it, and not only perhaps leverage it for improvement and advantages, but maybe even monetize it? How far along on that continuum would you say you are? A: Our goal is to use data and technology to improve cost and productivity while delivering better quality. At times it can feel like we’re in the early stages, and that we’re swimming in an ocean of data. The real challenge comes with if it feels like we’re swimming in data now, what’s it going to feel like five years from now? Q: You need a bigger boat, as they say in that shark movie, right? A: Exactly! But we know the value is there. The point is, we know there’s an ocean of data. We’re trying to articulate what this bay of data is telling us…concentrating on an inlet at a time. What I mean is, with so much information generated and available, we need to constantly steer towards profitable use of data, remove noise, and deliver relevant, timely, and easy-to-use information to those who need it.
Back to your question about leveraging technologies. Telematics would be a good customer-facing example of data and analytics coming together for mutual benefit. We first implemented telematics on our equipment more than two decades ago. It took time, but now, telematics are onboard the vast majority of our machines. We harness data to better understand and improve service, parts, engineering, and manufacturing while customers improve equipment utilization, operator training, jobsite logistics, and gain more favorable equipment financing.
As far as leveraging and gaining for both ourselves, our customers, and our employees, that’s a yes. Correctly monetizing these evolving technologies remains a challenge.
“I could see artificial intelligence helping us predict demand and helping our dealers forecast.”
Q: Stepping back from all of this, as CEO, you’re on a path to a digital future. What do you see as the return? Are you hoping that it will make you more agile, faster to market with new products, more efficient? But is there a bigger play? Are there new business opportunities you see potentially emerging from this that could transform Vermeer in a way that you might not recognize the company in 10 years because of these new opportunities?
A: We’re thinking about all those possibilities. At the same time, I think we feel we don’t have a choice but to pursue it. The expectation is there, the need is there, the opportunity is there. Even though we can’t necessarily see the finish line, we know we have to be in the race. We can see the potential to improve our efficiency and improve our customer’s efficiency. We know that by implementing these techniques and tools into our production environment, that our team is safer, more effective, and has a higher level of job satisfaction.
Q: Because they’re more engaged?
A: Yes, and they know that we are trying to bring tools to them that make their lives easier and safer and allow them to be more successful. So, it still feels like it’s the beginning of the race. We’re only getting started. We’re rolling out techniques and technologies one place at a time. We rolled out digital instructions on one line, proved it out, then implemented it throughout the plant. Now, it is a process found throughout all our production. The same with AGVs. We rolled out automated guided vehicles to support one line, worked with it to the point where we were confident the value proposition was there, and then rolled it out to other lines and plants. For us, implementing a new technology one step at a time and proving it out has allowed our team to absorb it and become more effective while reducing potential growing pains.
Q: It’s interesting to think about where it’s all going. What does the future state of a factory look like? Are we looking at a high degree of automation? Are we looking at lights out? Are we looking at factories that are going to be self-learning in a sense? Do you envision that sort of thing or is that kind of a mythology that the technology vendors are spinning?
A: That future might be there to a certain extent. I would say artificial intelligence is really not a factor yet in our production space. But I could see artificial intelligence helping us predict demand and helping our dealers forecast. There may be some artificial intelligence behind the scenes that looks back over years and years of data and is also checking macroeconomic data and tells us, ‘Your forecast is this, but I predict it’s this’, and finding that may be more accurate.
But as far as artificial intelligence in the factory, we’re definitely not there yet and I’m not convinced that we’re going to get there. Obviously, there are some really high-volume production environments that have gone more or less completely autonomous and the role for humans is programming those lines, maintaining those lines, and servicing those lines. At Vermeer, we manufacture lower volume, higher variation products compared to many manufacturers. I continue to believe that we are going to depend on humans complemented and supported by technology tools, such as robotic welding, automated guided vehicles, digital instructions, etc. You can’t just replicate the flexibility, problem solving, and broad capabilities of a person.
I continue to foresee, at least in the type of manufacturing environment we have at Vermeer, that it’s going to continue to be humans providing a significant level of the work that needs to be done, complemented and augmented by various robotics, automation, and tools.
“I could sTKTKT KT KTee artificial intelligence helping us predict demand and helping our dealers forecast.”
Q: But looking at the organizational impacts of these technologies, would you say it is possible or even probable that one of the effects could be a change in decision-making processes at Vermeer?
A: Yes, I could foresee it changing decision-making processes in ways that people appreciate. Take the example of forecasting. That can be a massive area of frustration.
Q: It’s always been an art form.
A: Yes, it’s an art form! It’s a bit subjective. Some dealers are naturally optimistic every year while others are naturally pessimistic and you find yourself trying to change their data based on your perception of their tendencies. If there was an ability to just dump all that data into artificial intelligence, or whether you want to just call it a good computer program that would spit out a number that is likely to be more accurate, that would solve a problem. Obviously as things change, such as the unexpected coronavirus, or an unexpected collapse in one region’s currency as a trade war fires up, then we still have to be flexible, change, and modify.
Q: I want to come back to some of these themes in a moment, but I did want to ask you about what happened in July of 2018 as a result of the tornado. That was obviously a very unfortunate event. Was there a silver lining there?
A: There has proven to be a silver lining. We were hit by the most powerful tornado in Iowa in more than three years on July 19, 2018. In fact, on that day, we were celebrating our 70th anniversary so throughout that day, we had 400 guests onsite, in addition to our couple of thousand team members that come to work every day in our main facility in Iowa. The tornado hit us just a little bit after 4:00 pm.
Q: People hadn’t left yet?
A: They hadn’t left. The greatest blessing of the outcome of the tornado was that we had no serious physical injuries and no fatalities, which is, frankly, pretty miraculous based on how much damage there was. We had three buildings completely destroyed. Every single one of those buildings had people in them. We had to tear them to the ground and start building anew. We are not just rebuilding to the level we were at before, we are building better and stronger than we’ve ever been before.
Q: Does this include new types of equipment and technologies? Did you have an opportunity to pull out a fresh sheet of paper and even redesign processes?
A: Yes, exactly! We lost two production facilities that totaled about 400,000 square feet of production space. We’re building back one big 500,000-square foot facility where those previous two had been. It’s definitely not as though we’re going to open that plant with such thoroughly new technology that our team won’t even know where they’re going to work, but we are designing that plant to have the technology that we’ve already learned about and developed, and be flexible to continue to absorb new technology going forward.
Certainly there will be automated guided vehicles, digital instructions, and robotic welding. We’re implementing significant improvements to our paint system. We are definitely taking multiple steps forward with the production environment but, at the same time, it’s still going to be a human-dominated environment complemented and augmented by all these tools that are continuously coming online.
“I don’t consider myself to be anywhere close to being a finished product as a leader.”
Q: Let’s talk about the future of leadership in manufacturing. As you look at the digital trend we’ve been talking about, what do you see as the biggest challenges and opportunities for our industry over the next few years?
A: Workforce is a significant one. That leads right into Vermeer continuing to leverage our heritage and continuous improvement, and the fact that we really try to encourage people to make decisions and improvements at the most local level. If we’re trying to figure out how to make an assembly line more efficient, with specific metrics we want to improve, it’s up to each individual along the assembly process to raise their hand and say, ‘You know, if we did this differently, it would help me a lot. If we did this differently, I could pass along a more consistent product to the next station. If the person before me passed their piece onto me with this, it would help me be more efficient.’
As leaders, it continues to be leveraging the flexibility of every individual and the natural problem-solving ability in every member of our team to make their area just a little bit better every day, which has a compounding effect of allowing the entire organization to get better.
Q: When you think of the future and the next member of the family who might be the next CEO, are there certain qualities or competencies that you think will be necessary for that role going forward that perhaps are not in place yet or they’re kind of works in progress?
A: I really think the case for everybody, maybe even more so for leaders, is that everyone has to be a lifelong learner. It’s important to come out of your educational background with skills you can leverage for your first job. But nobody can consider themselves to be a finished product anymore when they come into their job. If you come out of a community college with a background in robotic welding, that’s awesome, but the way robotic welding is going to be done 10 years from now compared to today is going to be dramatically different. If you aren’t continuously improving, you’ll be left behind. People can come into a manufacturing environment and be flexible about where their skills and desires and career path take them. I feel the same way about leadership. I don’t consider myself to be a finished product. I speak to our internal leadership group and the first slide that I present is, ‘This presentation is a work in process and subject to change.’ That’s how we all need to look at ourselves as leaders. We’re constantly learning new things. We’re being open-minded and flexible. My background may be in engineering and in business, but that’s just the starting point.
Q: If you had to focus on one thing as a watchword or catchphrase for the future of manufacturing, what would it be?
A: Adaptability or flexibility. Those two words are closely related and are important based on things outside our walls that we can’t control, based on the rate of change we are experiencing, based on ever-increasing customer expectations. We’re going to have to continuously improve and be more adaptable and flexible. MFACT FILE: Vermeer Corporation
HQ: Pella, Iowa
Business Sector: Industrial & Agricultural Equipment
Revenues: N/A (privately held)
Net Income: N/A (privately held)
Presence: 60+ Countries
Production: 6 (HQ-Pella, IA, S. Dakota, S. Carolina, Florida, China, Netherlands) Production Locations Plants Worldwide (1.5 million sq. ft)
Title: President and Chief Executive Officer, Vermeer Corporation
Education: B.S. degree in Mechanical Engineering, Calvin University; Master’s degree in Aeronautics/Astronautics, Massachusetts Institute of Technology (MIT); M.B.A. in International Strategy, University of Southern California.
Previous Roles Include:
– President & Chief Operating Officer, Vermeer Corp.
– President, Forage & Environmental Solutions, Vermeer Corp.
– Vice President, Distribution & Global Accounts, Vermeer Corp.
– Managing Director, Europe, Middle East & Africa, Vermeer Corp.
– Segment Manager, Vermeer Corp.
– Staff Engineer, Jet Propulsion Lab, NASA
– Co-operative Education Student, Johnson Space Center, NASA
Other Industry Roles and Awards:
– Member, Board of Directors, U.S. National Association of Manufacturers (NAM)
– Member, Board of Directors, U.S. Association of Equipment Manufacturers
– Member, Board of Advisors, Camcraft
– Member, Board of Trustees, Central College, Pella, Iowa
– Member, Board of Trustees, Nature Conservatory of Iowa
– Member, Board Directors, Raven Industries
– 100 CEO Leaders in STEM, STEMconnector, May 2016
– Member, President’s Advisory Council on Doing Business in Africa, PAC-DBIA
– Member, US-Brazil CEO Forum