John Deere: Early Supplier Integration in the Design of the Skid-Steer Loader
John Deere & Company is one of the world’s oldest businesses. The company’s core business is made up of manufacturing, distribution, finance and servicing of equipment. Deere & Company founded the Skid-Steer loader market, but ended up contracting the production and manufacturing to New Holland.
Key Issues and Recommendations
There are several issues being faced by Scott Nolan, John Deere’s supply management manager, within this case study. Each has a considerable influence on the future of the business. By identifying these issues, Nolan can work towards making the best and most informed decision on how to proceed.
Infrastructure
Problem
With a $35 million-dollar …show more content…
However, the company has realized that they are missing out on the opportunity to cut their costs, and develop a differentiated product from the competitor. On top of this, Nolan needs to ensure the quality of the product, which needs to stay the same or better. Additionally, with market demand expected to increase, and New Holland refusing to supply more inventory, the company was at the mercy of their supplier. To get out from under this, the only choice they could make was to take back the design and manufacturing of the skid-steer …show more content…
This requires him to look at all parts, what is used for other products being manufactured by the company and which aren’t. For the ones that are already being used on other products, he will need to determine if they are up to quality standards and can achieve economies of scale. If not, then going with a supplier who can will be preferred. To manage the quality, he will need to determine the rolled yield to find the defective rate. This needs to be very high, 99.99% to achieve good quality. This is often very difficult to achieve, particularly when outsourcing several different items from several different manufacturers. To help with this, Nolan should consider utilizing a manufacturer that can provide several different parts, who can also achieve that 99.99% rate, such as a certified
John Deere & Company is one of the world’s oldest businesses. The company’s core business is made up of manufacturing, distribution, finance and servicing of equipment. Deere & Company founded the Skid-Steer loader market, but ended up contracting the production and manufacturing to New Holland.
Key Issues and Recommendations
There are several issues being faced by Scott Nolan, John Deere’s supply management manager, within this case study. Each has a considerable influence on the future of the business. By identifying these issues, Nolan can work towards making the best and most informed decision on how to proceed.
Infrastructure
Problem
With a $35 million-dollar …show more content…
However, the company has realized that they are missing out on the opportunity to cut their costs, and develop a differentiated product from the competitor. On top of this, Nolan needs to ensure the quality of the product, which needs to stay the same or better. Additionally, with market demand expected to increase, and New Holland refusing to supply more inventory, the company was at the mercy of their supplier. To get out from under this, the only choice they could make was to take back the design and manufacturing of the skid-steer …show more content…
This requires him to look at all parts, what is used for other products being manufactured by the company and which aren’t. For the ones that are already being used on other products, he will need to determine if they are up to quality standards and can achieve economies of scale. If not, then going with a supplier who can will be preferred. To manage the quality, he will need to determine the rolled yield to find the defective rate. This needs to be very high, 99.99% to achieve good quality. This is often very difficult to achieve, particularly when outsourcing several different items from several different manufacturers. To help with this, Nolan should consider utilizing a manufacturer that can provide several different parts, who can also achieve that 99.99% rate, such as a certified