Supplier Development at Deere & Company
1. Is Deere’s tactic an appropriate one?
For Deere this tactic is the most obvious choice. Deere put together a team that put in hundreds of man hours/days over a 23 month time span in order to produce a report that shows this is correct. The tactic would reduce cycle time from approximately 250 days to 20–40 days and cut costs by an estimated 10 percent. By doing this the process would possibly lead to the maximization of desirable profits in the long run but would not yield high returns as the process is implemented right from the start. In doing this Deere is looking to reduce its cost and build time by having the parts sooner and at a cheaper price. As for Excelsior they were content that their manufacturing process was about as efficient as it could be and did not want to invest in the facilities and equipment recommended. Excelsior was aslo hesitant to invest $5 million to implement the changes.
2. What are the implications of this tactic and the possible consequences, positive or negative?
Integrated Supplier relationship
Meet customer demand / satisfy their customers
Reduce costs by an estimated 10 percent in the long run
Reduce cycle time from approximately 250 days to 20–40 days.
It will also increase the profit margin of the company.
Enhanced manufacturing process
Force the supplier to change
Cause strain in supplier relationship
Aggressive push through strategy
3. If it is not an appropriate tactic, what are some other alternatives?
Supplier development is defined as the efforts of a buying firm to improve the capabilities and performance of specific suppliers to better meet its needs. Deere believed it was doing this but was putting too much of a strain on Excelsior. The two companies could have tried for a better proposal that suits both of them. In a supplier development both parties should invest in financial and human...