A question-and-answer session with Steven M. Koep, Director of Sales, Application Equipment Business, North American Case IH

Retailers and custom applicators know increasing productivity in custom application is imperative in meeting customer needs. How is Case IH doing this with its equipment?

Productivity improvement potential is a major consideration each time a new product is developed at Case IH. If the product does not offer significant enhancements in productivity and thus the opportunity for improved customer profitability, it's not ready for the market.

In the application equipment business, we have found that improved productivity is one of the prime drivers in the purchase of a new piece of equipment. Equipment often is replaced before its useful life is over, in an attempt to improve productivity.

Improved productivity can come in many forms, including larger booms, larger tank sizes, more powerful engines, and even improved operator comfort. All of these features have the potential to improve the productivity of the operator and the machine, generating more acres per day and more revenue per season.

As we attempt to isolate the features that will improve productivity, we rely on those people who actually operate our equipment to assist us. Included in our design process is an elaborate customer interface. This helps us identify features that make customers more efficient.

Your production introduction in July brought new innovations and equipment to retailers. Tell us a little about these new efforts from Case IH.

In July of 2003 we introduced a totally redesigned line of flotation equipment, the FLX series of high flotation application chassis. These machines are targeted at our core customer in this market, the custom application professional. These new floaters incorporate radically new styling, which provides a Case IH family look as well as new comfort and convenience features, including a totally new cab. All of these features are intended to make our customers more productive.

This new styling provides another benefit to purchasers. The machine makes a bold statement about a retailer's business as he enters his customers' farms. Employing the latest piece of equipment tells customers that these retailers have invested in the latest technology to provide farmers with the best chance to improve their profitability. So these new machines not only include new features to make retailers more productive and feel good about their purchase, they also serve as a rolling advertisement to the retailers' customers. A new Case IH FLX floater tells farmers that their ag retailer has made an investment for their benefit.

Drift control and water management are still high priorities for custom applicators. How does this relate to your AIM Command system and environmental stewardship?

Drift control is becoming the most hotly debated issue in our industry. Part of the concern can be attributed to the phenomenon of suburbia quickly encroaching on rural America. Concerns are voiced daily by city dwellers who have purchased a rural haven and now are being exposed to activities with which they were unfamiliar. This has put new pressure on retailers to increase awareness of their activities and seek solutions to problems such as drift. The solution is oftentimes a combination of a good local level PR program and a mechanical solution to reduce drift.

Several years ago Case IH began marketing the AIM Command system. This system addresses the root causes of drift by controlling droplet size and pressure independently. It is an amazing system with the capability to make operators more efficient and use less product, all while becoming better stewards by reducing drift.

What's the number-one issue facing equipment manufacturers in the spray application segment as we enter the last part of 2003?

In my estimation, the single largest issue facing manufacturers is consolidation in the industry. We are all faced with attempting to earn a respectable living while dealing with fewer customers and having to travel farther to service those remaining customers.

Although few people prefer change to the status quo, the new reality has forced everyone to search for efficiency in their organizations. Retailers are looking for ways to form partnerships with neighboring retailers to develop economies of scale, and manufacturers are doing the same thing. In my opinion, this diminishes the importance of the product and will allow retailers and manufacturers to differentiate their businesses based on many non-product attributes. If you are a retailer, this suggests that you spend some time isolating and developing a schedule that allows you to collect for the services you provide for your customers. We all need to search for ways to add value to the supply chain and then determine a way to get paid for those services.

How is Case IH using the Internet to work with retailers?

Case IH uses the Internet to provide product information to ag retailers. In addition, the Internet allows us to efficiently share information with our dealers and distributors. This includes pricing programs, advertising and current product information. We are continually looking for ways to make it easier for people to do business with us, and the Internet is a great tool for doing that.

Steven M. Koep is director of sales for the North American Case IH application equipment business, managing wholesale and retail sales in North America.

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