Innovation Meets Productivity at AGCO Jackson Campus
A tour of AGCO Jackson’s sprawling manufacturing campus makes one thing clear: this is not your typical factory.
Sunlight pours in the windows of the Intivity Center, the facility’s public entrance. A gleaming two-story lobby leads to a showroom, auditorium and retail store. Through a glass wall on the left, AGCO’s state-of-the-art production floor beckons.
Indeed, a world-class production facility is not what most people would expect to find in this rural corner of southwest Minnesota. The city of Jackson is a small town, with a population just north of 3,300 people. Located at the intersection of Interstate 90 and U.S. Highway 71, it rests in the Des Moines River Valley, surrounded by farmland and open plains.
But this humble city is home to big industry, including Pioneer Seed, Ziegler, HitchDoc, USF Holland and AGCO, its biggest employer.
AGCO is the world’s largest manufacturer of machinery and equipment focused solely on the agricultural industry.
“We’re in 140 countries, and have about 21,000 employees and 4,050 dealers worldwide,” Ryan Erickson said.
Erickson is a senior manager in business process improvement at AGCO’s Jackson campus, which sprawls across 164 acres with 1,033,000 square feet of manufacturing space. He said the plant employs 967 nonunion workers and produces a volume of half a billion in annual sales.
“In Jackson, we build application equipment and tractors. We currently build RoGator®, TerraGator®, Massey Ferguson®, Challenger® and now Fendt® brands here,” Erickson said. “This is AGCO’s only North American tractor and sprayers plant. It has other tractor plants in France, Germany, China and South America.”
AGCO is headquartered in Duluth, Georgia, and has three other North American facilities. One Kansas plant manufactures hay equipment and combines; a second Kansas plant builds tillage equipment and planters. A third facility in Illinois is dedicated to grain storage and protein production systems. AGCO’s products are distributed all around the world.
I recently toured the Jackson facility and sat down with three members of its leadership team to discuss AGCO’s impact on the agriculture sector in Minnesota and across America. Joining me were Erickson, quality manager Brenna Anderson and senior human resources manager Kim Phillips.
Why Jackson, Minnesota? What makes this AGCO’s chosen base for tractor and sprayer production in North America?
Ryan Erickson: I think it goes back to the AgChem days. When Al McQuinn put AgChem on the market, he was looking for a buyer who would not change his vision of manufacturing or its footprint. That was really important to him. All of the top companies were interested in buying it, and he chose to sell it to AGCO. That was very strategic, and it was agreed that they would keep production in Jackson.
You can see the investments that AGCO has made in this facility since then, bringing in different product lines like tractors. A lot of that has to do with the leadership and the capabilities of the workforce here. Corporate thinks of us as the cultural leaders in North America. We’re one of the top sites for lean (manufacturing) for AGCO globally, because we’re very efficient in what we do, and we try to get better every day. That’s why AGCO is invested. They feel like they can get their return (on their investment) in this region. Even though it’s a small rural region, they know they’re going to get hardworking people and that whatever challenges they put in front of us we’ll be able to work through them together.
Kim Phillips: AGCO is not only important to Jackson, it’s important to the communities around us in the GreenSeam. We employ from about a 50-mile radius.
RE: The Jackson location is also important to the dealer network. When we brought the tractors in here, one of the drivers behind that was the dealer network. The customer base wanted a North American manufacturing footprint because when they are looking to sell a product, it’s a sales tool: “I can bring you to the factory where they build it.” This factory shows really well. A lot of people are amazed. If you go through other factories, if you’re familiar with factories, they don’t look like this.
KP: Our plant looks like this every day. It isn’t just a show. Every day it looks like this.
The GreenSeam region grows the food that feeds the world. Your employees are a part of that. How does this affect their work at AGCO?
KP: It’s important that our people understand the cultural importance of their work. A lot of our employees have a farm background. They’ve walked beans, they’ve grown up on farms, their grandparents had farms. That impacts us. People are very loyal to our brand, they’re loyal to the company and they have a very strong work ethic. You can’t repeat the work ethic that you get here in this area. It’s very strong.
To our families, the importance of agriculture is a part of their world somehow every day. (Our employees) have an impact on the farmers. They’re listening. They’re making things easier for them. They’re innovating and teaching them how they can make more money with our products. We do this for you. It all goes hand in hand: our employees, our communities and the way that we’ve been raised.
Brenna Anderson: The people that work here, they’re prideful of what they do. You’ve got a lot of people that are very loyal and have been here for a long time. When you start asking around, they’ve been here 10 years, 20 years, 30 years. You see that consistently, because they take pride in their work.
KP: Over 250 of our employees have been here 20-plus years.
BA: It’s generational. Their grandfather works here, and their father and mother work here, and now they work here. It becomes part of their family tree.
How do you keep communication open and encourage feedback from both your employees and your customers?
KP: All kinds of ways. We have feedback that comes in from our customers and dealers. We spend time on the floor visiting with our employees, listening to them. What do they hear from our dealers? What do they hear in the community? Why is it important? Would you refer a friend or relative here? The important communication is one on one. We call it our employee rounding, getting on the floor and having those relationships. There’s nothing better than a good relationship with your workforce, and I believe we have a great relationship with our workforce.
RE: The Net Promoter score is a big metric that we focus on. It’s about a customer experience, not just a product experience. We ask, “How would you promote the brand or the product you just bought?” We also get a lot of feedback from the public coming through our facility.
BA: We have an entire team that is dedicated to getting feedback from our dealerships and getting feedback from our customers. They present that to our customer experience team. My team is involved with weekly calls to find out feedback on things that we’re seeing in the field. Sometimes it’s issues that we have. Sometimes it’s, “Hey, we heard you did a really great job at this.” We do have that open feedback loop.
RE: In 2017 we decided to get some external feedback on how we are doing as an organization. We applied for three awards and had people come in and judge us as a company. We won all three awards for North America: Assembly Plant of the Year for 2017, AME Association of Manufacturing Excellence award and Industry Week’s Best Plant of the Year award. Those are some prestigious industry awards. But we still need to keep getting better. That’s why they call it a journey; there’s not a final destination.
Your Intivity Center takes its name from innovation and productivity. Why did you want to highlight those qualities here?
RE: It all goes back to that customer experience. We want to be known as the leading supplier of high-tech farming solutions, driving that bottom line improvement for the farmer for their operation. What innovations can we provide for you that you are willing to invest in because you see a return on your dollar? It’s not just about having a new shiny piece of equipment. It’s got to drive some return for you. That’s what we’re really trying to do with a lot of our investments. That’s where AGCO is going to win. AGCO is trying to be that solution provider and integrator of things for the farmers.
The philosophies of some of our competitors are very in-house. If you’re getting their tractor, then your data will be on this platform. AGCO has created more of an open protocol. We believe the farmer is the owner of the data. We’re trying to integrate, and we work with you. You’ll see almost weekly updates that AGCO has signed an agreement to work with new partners. With all these innovation and startup companies, one company can’t be the best at all things. It’s about leveraging what they bring to the table. In farming, its data, its sensors, it’s all this innovation. How can you as a full solution supplier help integrate some of those things for the farmer?
A short tour of your plant revealed many cutting-edge manufacturing processes and systems, including automation. How does AGCO select new tools and stay on top of the technology roller coaster?
RE: A lot of it depends on automation of processes. What can we do that makes sense for our employees and for the culture? We might think something has a good value, but if it doesn’t play well into the culture then it’s not something we want. Think about the technology in your phone. It’s not just a phone, it does much more for you and it’s intuitive. If technology isn’t like that, then it’s cumbersome. It’s a detractor instead of an aid.
Your employees are good at adding value to the customer. There’s also lots of non-value-added things that are necessary to get the product out the door. But the customer only pays you for value-added work, so let’s automate the non-value-added stuff and keep our living, breathing, thinking humans performing the value-added work. We’ve done a lot of things with high-tech solutions, and we’ve had some successes there. I think some organizations look at technology either as it’s scary or they’re all in and just blindly do it, forgetting about the culture aspect of it. That’s a slippery slope and that’s not one you want to go down. It has got to be a value add, just like a phone is to a person.
From the product and quality testing side, our job it to validate the assembly work that we do and the full functionality of the product. We work with our design groups on a global level to determine what our best practices are for validation. Then we work with integrators to develop equipment to simulate inputs and outputs. We do a lot of that to validate the technical aspects of the product.
BA: The big thing is setting expectations, setting a consistent standard. We’re diving into this Fendt brand right now, which is relatively new to Jackson. There is a different standard for Fendt quality, it’s our premium brand within AGCO. But we also want to make sure that we maintain that same quality standard across all our products, because that’s what Jackson does.
We put our standards out there to say, “This is the expectation.” Then we put quality gates in place, to govern that standard. As long as it’s realistic for us to manage, we should continue to hit that standard and have a consistent product coming out the door so the first and the 20th unit look identical. Our quality standards tie in with the technology, the people and the culture. It all works together.
It’s easy for work to become routine. How do you keep employees engaged?
KP: All of that comes through to the type of person we’re hiring. We do a lot of behavior-based hiring. Ten years ago, it was all skill based — they have to have this, this and this, and that’s all the people we’re hiring. Today we’re hiring people based on their values, their personalities and their behaviors.
A respectful workplace goes a long way. So, we talk a lot about that and about values. Many of our interview questions are behavior based: “How did you handle that situation? Why did you do that?” We want to know what triggered them to act the way they do.
We can train people. We’re very good at it now. But we have to find those people that are tenacious and care. They have to show the behaviors that we’re looking for. Too many times people focus on, “I have to have a person that knows how to run this wrench.” You know, there’s probably 50 people out there that can learn to run that wrench. You’ve just got to give them the opportunity.
BA: It’s the same even at the professional level for our engineers and for my whole (quality) team. I will take someone that doesn’t know how to do the technical part with the correct behaviors and the correct personality type over someone that can say, “I’ve been doing this job for 10 years.”
RE: Kim’s group has done a great job doing workplace simulations in orientation. We put people in situations where we can evaluate behaviors and see what roles might fit them. Then we put them in actual assembly type simulations. That’s where we start the training process. We can see, “All right, this person has got a great aptitude for this, but not for that … they’d probably be a good fit over here.” That’s been a huge thing for our organization.
KP: Feedback starts day one with employees. They get feedback on how they act in orientation. They get feedback on how they participate. They get feedback on how they’re going to be successful here and what kind of things they need to work on. We want to make sure that they fit in our culture. It builds that relationship to make sure they know we care. We listen to them. We want them to be part of our team, but they need to also want to be part of our team.
That transparency must be welcome.
KP: I’m about as direct as it gets. There’s not a lot of secrets here, and I think it’s helpful. A lot of individuals come in with no experience. We have an assembly academy here and they go into a class for about two weeks before they ever hit our floor. We already know their personalities before they go into the class. So, if they’re struggling mechanically, we know by watching their personalities that they’re going to get it. They just need a little bit more time.
We also know if there’s red flags before they go on the floor. We’re honest and clear with them about that. They know what their development needs are, and they know they need to work on them because they’re probably not going to stay here if that doesn’t change. That’s a win-win because the employee knows we’re trying to make them successful and they grow.
Previously I’d hear from supervisors, “They don’t know how to do this. They’re not going to make it. They can’t work here.” Now we have supervisors saying, “Just give me one more week with her. I think I can get her there.” So that’s the difference. Our supervisors and our leaders have now bought into this approach. It’s been amazing.
That’s quite a culture shift within your company to go from hiring for skills to hiring for behavioral qualities.
KP: We had to change. There are not a lot of mechanical people out there. We can’t just hire you another hundred mechanics.
BA: When we were hiring focused on skills, we were seeing that those weren’t the best people out there. It wasn’t who we should be hiring because it wasn’t getting us anywhere. We were not moving forward, and they were turning (over) fast. So that’s how we brought everyone else along to this (behavior-based hiring focus). We told them: “You don’t believe in it? Well, we’ll prove it to you.” Time and time again we did. Over the last 10 years it’s really evolved. Now that’s what everyone looks for most.
RE: We also focused on the behaviors of leadership. It’s not just about the behaviors of the people on the shop floor. We started looking at what drives (skill-based hiring). Well, there’s a belief that, “I need a mechanic because we’re doing assembly work.” OK, what drives that? Is it because we don’t have a great training program developed or is it because we need to improve our work instructions?
Once you start building those diverse teams, then you’ve got different people looking at the problem in different ways and you start to see better solutions. You start to see better continuous improvement efforts. It’s a win all the way around. You get more engaged employees, more diverse groups working together, better teamwork and a better cultural organization. It’s just a breath of fresh air.
BA: I’ve been in hundreds of suppliers (locations) and the ones that still operate in that old school way are not successful. They have lots of problems. Their quality issues are through the roof. The suppliers that understand business has evolved and that they need a standard way of working, those are the ones that are successful. Those are our best suppliers. They get us quality parts and, if we do have an issue, they’re on top of it. They fix it right away.
What are the attributes you look for when you hire?
RE: You’re looking for communication, responsibility, self-motivation and problem-solving skills. We’ve had people that come in and they’re friendly. But they don’t look for the next thing to do. They’re not self-motivated, and we’re not in the business of spoon-feeding people tasks. This is a career. This is a responsibility. We expect everybody out on the shop floor to be doing their job and looking to see how they can make their job better. And that’s in an assembly line. In my team, I’m looking for people that are self-motivated, that have a continuous improvement mindset, a good work ethic and people skills.
Your last Jackson expansion was in 2011. Are you at full capacity now or do you still have room to grow?
RE: Right now, the supply chain is the limiting factor with our capacity needs. There’s a lot of pent-up demand.
BA: We’re at a point where the company wants to continue to invest and grow in Jackson. But we want to make sure that we get the supply chain issues under control so that we’re not leaving any customers behind. We want to get that squared away before we dive into something new or expand what we have here.
You’ve really had to be nimble the last few years. First with COVID and now with supply chain issues.
RE: I would not say COVID was easy, but these current supply chain issues have been more disruptive to our daily business. It’s a constant challenge. It requires a lot more effort, a lot more focus and a lot more resources. You’re mitigating risk at every level. You might have a supplier that is struggling. They’re not looking ahead long range and all of a sudden, they stumble across an issue. They let you know, but it’s too late at that point. So, our guys are working with the second-tier and the third-tier suppliers to try and help mitigate. Oftentimes that means getting a large cross-functional group involved to figure out what is going to help break this bottleneck. Can we find components at a different source? Does engineering approve these components? Is it people? Resources? Transportation? So, we’re expediting things, we’re helping move things, we’re building things in some cases. And we’re setting up airfreight and hot shots and we have drivers waiting for product to be ready. It’s a constant dance right now to keep product lines moving through the factory floor.
BA: We’re keeping the product lines moving. That’s something that we pride ourselves on is that we have kept things moving throughout all of this. It might be that we have to think outside of the box a little bit. Just because we’ve been doing it this way all along, doesn’t necessarily mean we can do it that way in this current environment. How do we find ways to kind of flex in different directions to make it happen? And it might very well be that we’ve got to change a component a little bit. Is it a temporary deviation? Is it a permanent deviation? Sometimes we don’t know the answer to that.
A lot of the challenge that we have is we don’t find out the issues until they happen. We might find that morning that we’re going to be missing a major part and we can’t build without it. What path do we travel down now to continue to build? You pull in engineering, you pull in all your cross-functional partners and say: “OK, can we do a makeshift part? Can we 3D print something and put it in there as a placeholder until we can get the actual part? It’s really trying to come up with different ways of looking at things to keep going without jeopardizing the customer’s quality.
RE: We’re actually flexing resources to help suppliers. There is no, “That’s not my job.” It’s all hands on deck. That’s what a good culture can do for you. People are willing to step up. That’s what we’ve got around here and that’s why we’re being successful.
It sounds like in some ways, COVID helped you take AGCO Jackson to the next level.
RE: That’s probably true for lots of folks. When you’re in a factory, you can’t remotely build a tractor. We had to rethink how we worked. Cross-training has always been important, but the level of cross-training now is at a much higher level than it was before COVID. And it’s not going to go back, because it allows us to be flexible. It allows us to manage our business better. It allows us to take these anomalies that happen in stride — because they’re not going to go away once the supply chain issues stop. You’re still going to have the day-to-day things that come up. We’ll be a better company because we’ll be able to handle those things and be more flexible with our roles, our responsibilities and our workforce.
BA: A lot of the things that we had to incorporate into our day-to-day business because of COVID, we’ve been able to build on with the supply chain struggles that we’ve had. We’re used to having to shift things around and make it work. I think that’s what’s making us successful through all of this. We took that opportunity through COVID to better ourselves. A lot of companies (during COVID) were like, “Oh, well, we’re going to shut down. We can’t do anything.” We didn’t shut down for that. We kept going.
It highlighted the strengths of our organization. They were there prior to COVID, but until you get put in a situation where you have to use them, you don’t see those things.
RE: It helped us cultivate those strengths, too. You don’t just have pockets of strength now; it’s become organizationally part of our being.
KP: My biggest aha! moment from COVID was how amazing our workforce was. They followed our lead. We told them to temp scan, and they temp scanned. We told them to wear masks, and they wore a mask. But they still came to work and they still did their jobs, and they did it without resistance. It was pretty amazing. If we hadn’t had that amazing workforce, there would have been a lot of resistance. But they trusted that we were doing the right thing for them.
RE: When we look for the silver linings, that’s been one of the positive outcomes that came out of the pandemic. That and knowing how to manage our way through tough situations. We always joke that if we could manage through COVID, we can manage through anything. I think we did an excellent job working through that with our employees, and our employees were absolutely the reason why we succeeded. It took a lot of good communication and people being on the same page and setting opinions aside. … It really brought up our level of management and communication and change implementation, you name it. So, you can definitely see some positives there.
Are you seeing any new trends in the ag sector that are impacting your business?
RE: AGCO just launched a whole new product line this winter for retrofit sprayer kits so you can take a competitor sprayer that you already own and buy kits from AGCO to make it perform better. It will help you get higher yields and better returns on your crops, and we can show you the business case for it. We do that with planters, we do that with sprayers, and we do that with combines. So not only will we sell you brand new OEM vehicles and equipment, we’ll also sell you kits to make the equipment you already own perform better.
There’s a lot with the agronomy side that is newer to our business. That’s the “farmer first” mentality that we’re really driving from the corporate level all the way down through our organization. You see the hunger for that in the ag industry, they’re looking at data and they have been for a long time. Ag has always pushed the technology side of things, but it’s not just to have a new shiny app or a brand new AGCO sprayer. It’s how can AGCO help the farmer improve? We help you see a value in your current products, too. That’s a change for us from the product portfolio side as AGCO tries to adapt to the ever-changing farm market.
What’s on the horizon for AGCO Jackson? Are there any future goals you can share?
KP: We want to be the Fendt plant for North America.
BA: We want to be the Tesla of ag.
KP: Yes! We don’t want to be the Ford or Chevy. We want to be the Tesla.
RE: The story there is, Tesla doesn’t try to beat Toyota by being Toyota. They’re trying to compete in the same market by being something different. We used to try and beat our competitors by being them. Well, we’re not going to beat them that way. We’re going to beat them by being different and providing a different level of service and support to our customers. We’ll beat them by focusing on the customer experience: farmer first.
AGCO’s Core Values: TRAIT
Transparency—We will provide the full information required. We will communicate openly and sincerely. We appreciate feedback.
Respect—We appreciate other individuals with their own cultural identities. We embrace differences.
Accountability—We will take responsibility for our area of influence as if this were our enterprise. We will commit to excellence.
Integrity—We will walk the talk. We will be committed to a consistent, honest and reliable way of action.
Team Spirit—We actively contribute to overcoming challenges as a team.
The History of AGCO Jackson
1973: Al McQuinn, founder of Ag-Chem Equipment Inc., builds a factory in Jackson to produce the agriculture industry’s first self-propelled sprayers, the Terra-Gator and the RoGator.
1990: AGCO is formed. Based in Duluth, Georgia, it begins manufacturing and distributing farm equipment under the AGCO® Allis and Gleaner® brand names in North America.
1998: McQuinn sells Ag-Chem to AGCO.
2002: The first tractor assembly is brought to Jackson, with a new assembly line to handle the manufacture of Challenger track tractors and articulated 4WD tractors.
2011: AGCO announces plans to expand high-horsepower wheeled tractor production in North America. The Jackson facility undergoes a 75,000-square-foot expansion to include wheeled row-crop tractor production for Massey Ferguson and Challenger.
2012: AGCO opens the state-of-the-art Intivity Center in Jackson. The facility includes a showroom, a conference center, an auditorium, a catering cafeteria and a retail store.
2022: AGCO adds the Fendt brand to its product portfolio, with North American production based in Jackson.
202 Industrial Park
Jackson, MN 56143
Phone: (507) 847-2690
Address 3 Civic Center Plaza, Suite 100 Mankato, MN 56001