Deere: Evolution of the Parts Business for Dealerships

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Just jumping back to parts, in terms of inventory, how many millions of inventory would each branch have roughly in parts?

We have about $1.2 million in U.S. dollars across all Deere and non-Deere parts. On average across our locations, we keep it under $50 million. Right now, we're probably at about $46 million. That's our current inventory.

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Okay, I see. Sorry, I misunderstood. Got it. Regarding the part sales, you mentioned 50% over the counter and the rest through service. How much is planned versus unplanned? For example, is it for downtime or more planned, like buying parts every two months to have in stock?

Yes, I'm going to say 90% is unplanned. It's either an emergency or they're going into harvest and doing preventive maintenance or replacing worn items. Maybe it's not that high, maybe 60%, because those who keep machines longer than a year go in annually to check and replace worn items. That could be about 40% of the business. But the majority of people who come to the parts counter to purchase a part and install it themselves, or need a repair in the shop, it's more of an emergency. The machine is down, and they need it back working immediately. So it's pretty high.

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Typically, if a customer is down, how quickly would you be there? Within a few hours?

Yes, we'll be there within two to three hours. For example, if I'm in Wiener, Arkansas, and the technicians are all tied up, they'll call other locations to find a technician who can start diagnosing within an hour or so.

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