How John Deere is Solving Supply Chain Risks

John Deere has announced the recall of 99 previously laid-off employees to its manufacturing hubs in eastern Iowa. 

Starting on 17 February 2025, these workers will rejoin the machinery giant's Davenport and Dubuque Works sites.

John Deere's expansion in Indiana and North Carolina, alongside its repatriation of excavator production from Japan, serves as a high-profile case study for the broader reshoring and onshoring trend currently reshaping global supply chains.

By shifting production from Japan to North Carolina and investing US$20bn in domestic manufacturing, John Deere is moving away from the "offshore for cost" model towards a "local-for-local" manufacturing strategy that prioritises supply chain resilience and operational agility.

Mark Dickson, Vice President Manufacturing Earthmoving, says the callbacks are a direct response to a surge in demand across the firm's construction and forestry divisions.

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• Procurement & Supply Chain LIVE: The US Summit - Navy Pier, Chicago, April 21-22

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Mitigating supply chain risks

The recall follows positive announcements about manufacturing expansion. The company is set to establish a state-of-the-art parts distribution centre near Hebron, Indiana, alongside a new excavator factory on its campus in Kernersville, North Carolina. The projects, scheduled for completion in 2026, are expected to generate hundreds of high-value manufacturing and logistics roles.

John Deere's move to manufacture excavators in North Carolina that were previously made in Japan represents a classic example of repatriation, driven by the need to eliminate supply chain vulnerabilities associated with long-distance shipping, currency fluctuations and trade tensions. According to EY, 88% of manufacturing executives say they are planning to shift their supply chains to nearshoring or onshoring to increase resilience against global disruptions.

The decision to reshore excavator production also reflects broader industry concerns about geopolitical instability in Asia-Pacific trade routes. By establishing domestic production capabilities, John Deere reduces its exposure to potential disruptions from trade disputes, shipping delays and regulatory changes that have plagued international supply chains in recent years. This strategic shift allows the company to maintain production continuity even during periods of global uncertainty.

John May, Chairman and CEO of John Deere, says: "Our investment in these new facilities underscores John Deere's dedication to strengthening the backbone of American industry and supporting local economies.”

Shifting from just-in-time distribution

The new Indiana distribution centre is positioned to bolster the company's nationwide supply chain resilience. By streamlining regional operations, the facility aims to ensure the rapid delivery of critical equipment and parts. This represents a shift from "Just-in-Time" (lean, offshore) to "Just-in-Case" (resilient, onshore) inventory management.

According to PwC's 2024 Pulse Survey, 46% of industrial leaders cite onshoring or nearshoring as their primary strategy to reduce supply chain risk. Furthermore, PwC notes that companies are increasingly prioritising speed-to-market over the lowest possible unit cost. By streamlining regional operations, John Deere could be sacrificing the potentially lower labour costs of overseas production for the ability to get parts to a broken-down tractor in Iowa within hours, not weeks.

Denver Caldwell, Vice President of Aftermarket and Customer Support, highlights the importance of this move for the firm's diversified client base, saying: "This new facility is an investment in customer expectations around world class product support through parts availability for our US-based agriculture, construction, forestry, mining and turf customers.”

The new site will create approximately 150 jobs. The US$70m investment in the Kernersville factory enables it to handle the production of next-generation excavators that were previously manufactured in Japan. Once operational, the campus will produce the only excavator designed, developed and manufactured entirely within the United States.

Ryan Campbell, Vice President of Worldwide Construction and Forestry and Power Systems, says: "We are excited to bring this new facility to our Kernersville campus and to be part of the region's thriving manufacturing community.”

Strengthening domestic production

In Iowa, the staff recalls will support specific high-demand production lines. The Davenport Works, which houses six production lines for motor graders, skidders and wheeled feller bunchers, will welcome 75 employees. These roles span fabrication, machining, welding and material handling for articulated dump trucks.

The Dubuque Works – a 3.9 million-square-foot facility manufacturing backhoes and crawlers – will add 24 employees specifically for production-class dozer assembly.

The expansion is part of a decade-long capital expenditure programme. 

John clarified the scale of this commitment, saying the investments are a "testament to our confidence in the future of US manufacturing and our unwavering commitment to innovation, quality and economic growth.

"These investments further demonstrate our commitment to invest US$20bn in US manufacturing over the next 10 years."

"We believe in building America, and these projects represent our intent to continue driving innovation and job creation in the United States.”