Government officials are paying keen attention to challenges facing contractors and farmers to secure needed parts as the harvest and colder temperatures arrive.
The Association of Equipment Manufacturers, a Wisconsin-based trade association that represents equipment manufacturers, said the equipment farmers depend on requires thousands of parts, components and materials, including steel, aluminum, electronics, rubber and insulation. AEM said manufacturing facilities in Mexico closed in March and April, while the Mexican government decided how to protect employees during the pandemic.
“There’s a fair amount of parts and components that are sourced from Mexico, and thousands of parts go into a piece of agricultural machinery and each company sources from different locations,” said Alex Russ, AEM director of government relations. “Not only did that disruption slow down manufacturing, but it also stopped certain manufacturers from being able to operate in the U.S., because they couldn’t source those parts and components from anywhere else.”
While manufacturers in the United States and Canada were able to attain “essential” designations for their operations, Russ said, the Mexican government delayed how it was going to deal with the COVID-19 outbreak.
“The pandemic really destabilized North American supply chains, as manufacturers were trying to obtain ‘essential’ designations and make sure that their suppliers were also able to continue manufacturing,” Russ said.
Mexico has since issued clear guidance for manufacturers to operate. Ensuring that all North American plants are operational, Russ said, is especially important given the United States-Mexico-Canada Agreement, a trade agreement that took effect in July.
Another challenge affecting the supply of parts and equipment, Russ said, is a limited supply due to “just in time” manufacturing, which means plants manufacture equipment based on customer demand and do not stockpile many extra parts and components.
AGCO, a worldwide manufacturer and distributor of agricultural equipment, reported in late July that all its factories remained open, with strong orders for spring 2021.
“We still face a demanding environment to manage our manufacturing, supply chain and aftermarket operations,” AGCO chairman, president and chief executive officer Martin Richenhagen said. “In addition, end-market demand has been negatively impacted by the pandemic, but is proving to be resilient as farmers look to replace their aged fleet.”
Based on the COVID-19 impact to manufacturing supply chains, AEM predicted the pandemic will change the way manufacturers operate in the future.
“Our concern is, we really need to prepare for future disruptions to North American supply chains,” Russ said. “It seems logical that the United States, Mexican and Canadian governments should have some type of task force or a mechanism where manufacturers can provide government decisionmakers information in real time, to cut down on disruptions.”
The Association of Equipment Manufacturers, a Wisconsin-based trade association that represents equipment manufacturers, said the equipment farmers depend on requires thousands of parts, components and materials, including steel, aluminum, electronics, rubber and insulation. AEM said manufacturing facilities in Mexico closed in March and April, while the Mexican government decided how to protect employees during the pandemic.
“There’s a fair amount of parts and components that are sourced from Mexico, and thousands of parts go into a piece of agricultural machinery and each company sources from different locations,” said Alex Russ, AEM director of government relations. “Not only did that disruption slow down manufacturing, but it also stopped certain manufacturers from being able to operate in the U.S., because they couldn’t source those parts and components from anywhere else.”
While manufacturers in the United States and Canada were able to attain “essential” designations for their operations, Russ said, the Mexican government delayed how it was going to deal with the COVID-19 outbreak.
“The pandemic really destabilized North American supply chains, as manufacturers were trying to obtain ‘essential’ designations and make sure that their suppliers were also able to continue manufacturing,” Russ said.
Mexico has since issued clear guidance for manufacturers to operate. Ensuring that all North American plants are operational, Russ said, is especially important given the United States-Mexico-Canada Agreement, a trade agreement that took effect in July.
Another challenge affecting the supply of parts and equipment, Russ said, is a limited supply due to “just in time” manufacturing, which means plants manufacture equipment based on customer demand and do not stockpile many extra parts and components.
AGCO, a worldwide manufacturer and distributor of agricultural equipment, reported in late July that all its factories remained open, with strong orders for spring 2021.
“We still face a demanding environment to manage our manufacturing, supply chain and aftermarket operations,” AGCO chairman, president and chief executive officer Martin Richenhagen said. “In addition, end-market demand has been negatively impacted by the pandemic, but is proving to be resilient as farmers look to replace their aged fleet.”
Based on the COVID-19 impact to manufacturing supply chains, AEM predicted the pandemic will change the way manufacturers operate in the future.
“Our concern is, we really need to prepare for future disruptions to North American supply chains,” Russ said. “It seems logical that the United States, Mexican and Canadian governments should have some type of task force or a mechanism where manufacturers can provide government decisionmakers information in real time, to cut down on disruptions.”