John Deere and Complex Parts

In: Business and Management

Submitted By nbrower23
Words 695
Pages 3
Case # 2 – John Deere and Complex Parts Inc.
Key Facts * Net Sales for John Deere were over $19 billion * Net assets of more than $34 Billion * Complex parts was supplier for more than 10 years * Supplied Deere with a key manufacturing part requiring significant engineering input and testing * Complex Parts supplied all needs to John Deere at the time * Complex parts was interested in increasing sales to John Deere * Achieving Excellence Program (AEP) was a supply management program trying to give the competitive advantage to deliver world class equipment * Strived to develop long lasting relationships * Promoted communication, trust, cooperation, and continuous improvement * Key, Partner, approved , conditional supplier rankings * Complex Parts * Started falling short of requirements of John Deere * Not answering phone calls * Delivery rating was over 150,000 * Target cost not met, reducing projected profits on certain things for Deere * Not following Deere Quality Plan at new Facility * Getting quotes on time seemed to be very difficult
Discussion Questions 1. Some of the strengths about the Achieving Excellence Program are that they strived to develop long lasting relationships with their suppliers. They provided supplier performance summaries at the end of each quarter to show the suppliers how they were doing in their part of supply John Deere, and they also had John Deere training programs, but not all suppliers were eligible, which I believe to be one weakness of the program. I believe they chose the right categories to base the supplier’s performance off of (quality, cost management, wavelength, and technical support). One thing that really caught my eye out of the four categories that I believe to be excellent was the wavelength category. This…...

Similar Documents

John Deere & Company

...Deere & Company In 1837, Deere and Company was founded by John Deere. Deere & Company is one of the seven full-line farm equipment manufacturers in the world. During the three-decade, post-World War II boom period, Deere expanded its product line, built new plants, ran plants at capacity, and still was unable to keep up with demand. During this same period, Deere had diversified into off-the-road industrial equipment for use in the construction, forestry, utility, and mining industries. Competitive environment In the 1980’s, the collapse of farmland values and commodity prices led to the worst and most sustained agricultural crisis since the Great Depression. Several factors intensified the crisis; the high dollar reduced US exports and hurt both American farmers and American farm equipment producers. Farmers had been encouraged to go into heavy debt to expand and buy land, consequently when land values and farm prices plummeted, the number of farm foreclosures skyrocketed. Few farmers were in a position to buy new equipment, and resale of repossessed equipment further reduced the market for new equipment. Due to this, Deere adjusted its level of operations downward, cut costs where possible, increased emphasis on pushing decision making downward, and restructured manufacturing processes. Deere wanted its captive component divisions to supply other companies and industries to add production volume. However, nearly all of John Deere Component Works (JDCW) sales were......

Words: 1439 - Pages: 6

John Deere

...Scott Hedrick March 19, 2012 1. History of John Deere “Deere & Company began when John Deere, born in Rutland, Vermont, USA on February 7, 1804, moved to Grand Detour, Illinois in 1836 in order to escape bankruptcy in Vermont. Already an established blacksmith, Deere opened a 1,378 square feet shop in Grand Detour in 1837 which allowed him to serve as a general repairman in the village, as well as a manufacturer of small tools such as pitchforks and shovels. What was more successful than these small tools was Deere's cast-steel plow, which was pioneered in 1837. Prior to Deere's introduction of the steel plow, most farmers used iron or wooden plows which stuck to the rich Midwestern soil and had to be cleaned very frequently. The smooth sided steel plow solved this problem, and would greatly aid migration into the American Great Plains in the 19th and early 20th century. Deere's production of plows began slowly, but increased greatly when he departed from the traditional business model of making equipment as it was ordered and instead began to manufacture plows before they were ordered and then put them up for sale. This allowed customers to see what they were buying beforehand, and word of the product began to spread quickly. In 1842, Deere entered a business partnership with Leonard Andrus and purchased land for the construction of a new two-story factory along the Rock River in Illinois. This factory produced about 100 plows in 1842 and approximately 400......

Words: 937 - Pages: 4

John Deere

...The following report is a consultation analysis of John Deere Component Works costing structure. Included is a discussion of the existing cost system as well as a comparison with the proposal of the Activity Based Costing system. The solutions to the required discussion issues have been thoroughly prepared and are hereby included. Problem Statement: The demand for John Deere Component Work’s (JDCW’s) products has suffered due to the collapse of farmland value and commodity prices. A number of continuous failures in JDCW’s competition for bids have placed an onus upon management to question its current costing methods. As a result, an analysis must be made regarding the current costing methods in order to determine their validity and to aid the company in adopting a more sound costing system. Analysis John Deere Component Works was a subdivision of John Deere and Company which dealt exclusively with the manufacturing of tractor component parts. By the mid 1980’s, JDCW found that its available excess capacity was increasing. To neutralize this problem JDCW attempted to take advantage of the efficiencies of its newly acquired automatic turning machines by bidding on parts offered from within the company. This lead to a direct bid of 275 of the 635 parts offered by John Deere and Company. Out of the possible 275 parts, JDCW was successful in the bidding of only 58 parts, which happened to be low volume parts. This became a concern for JDCW because its aim......

Words: 1761 - Pages: 8

John Deere

...e r e an d C o m p l e x Parts, Inc.1 On Friday, November 22, 2006, Blake Roberts, Hayley Marie, Stan Eakins and John Pearson, members of one of John Deere’s supplier evaluation teams, were discussing the performance of Complex Parts. Complex Parts had provided questionable service to John Deere’s Moline unit over the past year, and they were wondering if this merited giving their business to a different supplier. They needed to recommend a course of action to their project manager the next week. Company Backgrounds Deere & Company, headquartered in Moline, Illinois, was founded in 1837, and in 2007, they conducted business in over 110 countries and employed approximately 47,000 people worldwide. They are the world’s leading manufacturer of farm and forestry equipment, and also produce construction, commercial and consumer equipment. Other products and services produced by Deere included equipment financing, power systems, special technologies and healthcare. Net sales in 2006 were over U.S. $19 billion with total assets of more than U.S. $34 billion. Cost of goods sold in 2006 was approximately U.S. $15 billion. Complex Parts, Inc. had been a supplier of John Deere for the past 10 years with annual sales to their Moline unit of approximately U.S. $3.5 million. They supplied Deere with a key manufactured part requiring significant engineering input and testing. Two other Deere suppliers were capable of supplying this part; however, Complex Parts was providing all of......

Words: 1039 - Pages: 5

John Deere

...John Deere HistoryEveryone has most likely seen the unmistakable logo and colors of a John Deere tractor, but few understand anything beyond the trademark green and yellow colors. The John Deereactually got its start when a man named John Deere built a plow that made farming easier andless of a task for farmers in 1837. After the plow, the company started to grow and has continuedto do so ever since. In order to fully understand the success of the John Deere Company oneneeds to know more about the company founder, the products of the company, and it business practices that allow it to thrive in the face of many competitors. There might be many reasons for the success of John Deere, but in order to truly understand one has to look at the company beginnings.According to John Deere’s website, John was born in Rutland, Vermont, on February 7,1804, and raised in the nearby town of Middlebury. At the age of four Johns father was lost at seawhich left John’s mother, Sarah Deere, to raise John and his five brothers and sisters by herself.John didn’t have much growing up and he received the simplest education available. Inhis early teens, John took a job with a tanner where he ground bark for a very small amount of money, a pair of shoes, and clothes. In 1847 John Deere promised, "I will never put my name on a product that does not have in it the best that I have in me." For more that 157 years John Deere has remained true to that commitment -- building their reputation......

Words: 901 - Pages: 4

John Deere

...John Deere John Deere began in 1836 as a repair shop and manufacturer of small tools. In 2012 it was ranked 97th in the Fortune 500. John Deere is one of the largest manufactures of agriculture machinery in the world. They have also become a leading manufacturer of heavy equipment. John Deere has a main slogan of “Nothing runs like a Deere” The fiscal year for John Deere ends on October 31st. Over the past few years one of the main goals for the company is future growth. The plan was to open seven new factories in their key markets. As of the end of 2013 all 7 had been completed and is set for higher production numbers in 2014. I believe that this will change their financial position for their year-end 2014. While today’s economic outlook may be discouraging, John Deere is committed to continuing growth and providing solid and reliable products. Inventories owned by Deere & Co and its US equipment subsidiaries are valued at cost on the LIFO basis. The property and depreciation are based on weighted averages in useful lives for years. Deere & Company had some growth in 2013 compared to 2012. There were not any real significant differences in the financials from 2012 to 2013. The largest increase was in the debt/equity ratio. I believe this can be explained because of the construction of the new facilities. Production was complete by the year 2013 and most of the major production and expenses had come in the previous years. I would invest in Deere in......

Words: 285 - Pages: 2

John Deere

...Russ Britton Mrs. Watters English 400 9/8/14 John Deere and the Company John Deere was born in Rutland, Vermont, on February 7, 1804. He was raised by his mother basically his whole life. Growing up, he wanted to be a blacksmith. He fulfilled his dream at age 17 as a blacksmith’s apprentice. A few years later, he was doing it on his own. His next twelve years were very busy after that. In 1837, Deere moved west to Grand Detour, Illinois. As he was there he opened up his own blacksmith shop. As a blacksmith, he experienced working on other plows that had been created for farming. John quickly realized that these plows needed to be remade. Here he began to start creating his own plows and he sold three plows by 1838. He had produced ten more plows by the next year. and even forty more by 1840. The demand for these plows were high, therefore he partnered up with Leonard Andrus to produce even more. In 1846, they sold close to one thousand plows that year. A few years later, Deere noticed that Grand Detour wasn’t good enough for him. As a result, he packed up and moved to Moline, Illinois. Moline is located by the Mississippi River, which gave him access to even more opportunities. He was able to offer cheap transportation and water power. John started to get british steel because it is sturdy. That immediately sped up his operation. His company made around 1,600 plows in the year of 1850. In 1858, he transferred his leadership of the company to his son, Charles, who was......

Words: 629 - Pages: 3

John Deere and Complex Parts, Inc.

...Background Deere & Company was founded over 177 years ago in 1837 and since then have grown into a multi billion dollar corporation that has established themselves as the leading manufacturer of farming and forestry equipment. Their products reside in over 110 countries and as of 2013; they employ over 67,000 individuals (Statista, 2014). In 2006 members of John Deere’s supplier evaluation team were discussing a long time supplier, Complex Parts, performance. Over the past year, their service had declined resulting in an unfavorable and less profitable relationship between John Deere and Complex Parts and the supplier evaluation team was tasked with providing a recommended course of action to their project manager within the coming week (Wisner, Tan, & Leong, 2012). John Deere employed the Achieving Excellence Program (AEP) as a supply management strategy aimed to develop long-lasting supplier relationships by an evaluation process that promoted communication, trust, cooperation and continuous improvements. Suppliers under the AEP were evaluated in their quality, delivery, cost management, wavelength, and their technical support. The AEP is what the supplier evaluation team was required to utilize in their evaluation and decision process in order to remain fair and unbiased to all of John Deere’s suppliers (Wisner, Tan, & Leong, 2012). Discuss the strength and weakness of John Deere’s Achieving Excellence Program. Consider and discuss other criteria to include in the...

Words: 1219 - Pages: 5

John Deere

...John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid......

Words: 309 - Pages: 2

John Deere and Complex Parts Inc

...MIT School of Business (MITSOB) Post Graduate Diploma in Management (PGDM) Backlog (April 2014) Semester II Term End Examination Subject: Operations Research (203) Total Marks: 50 Duration: 2½ Hrs. Instructions: 1) Formulate the problems in the answer sheet. 2) Students should write the steps and formulae used in the cells along with the final answer, in the answer sheet so that examiner will be able to evaluate the answers. 3) No marks will be given in case only the final answer is written in the answer sheet. 4) Only MS Excel is to be used. No other software/packages are to be used. 5) Assume suitable data/method, if necessary and mention the assumptions, wherever made. 6) Only the text book issued, i.e., ‘Operations Research and Quantitative Techniques by Prof (Gp Capt) D.P. Apte’ is permitted to be referred during the examination. No other material is permitted. ______________________________________________________________________________ Section A: Solve the following Case (Marks 20) Q1: ‘Venus Book Stall’ is a famous book stall on near Arts, Science & Commerce College selling college text books, stationary, calculators etc. for the last seven years. The manager has observed that there is increasing trend in the sales of textbooks over this period. The number of books sold per year is as follows: Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | Number of books sold | 1049 | 1125 | 1243 |......

Words: 1138 - Pages: 5

John Deere and Complex Parts, Inc.

...Assignment # 3 Case 5 John Deere and Complex Parts, Inc. Summary Deere & Company was formed in 1837, with its headquarters set up in Moline, Illinois and were considered as a pioneer in manufacturing farm and forestry equipment, construction, commercial and consumer equipment. Their broad range of products and services included equipment financing, power systems, special technologies. In 2006, supplier evaluation team members of Deere Inc. Moline unit were united to discuss the performance of Complex Parts. For the past 10 years, Complex Parts, Inc. had been playing a key role in Deere’s sales with an annual approximation of U.S. $3.5 million. Their contribution to Deere Inc. included supplying them a key manufactured part, which required significant engineering input and testing. Even though other suppliers could produce this part, Complex parts Inc. took charge of it by actively involving with Deere Inc.’s sales engineers weekly, associating with their cost reduction strategies. And keeping up the Deere Inc.’s design changes and globalizing their quality plan. But during the past year, Complex Parts had provided questionable service to the Moline unit and now the unit manager John has been analyzing whether to continue business with Complex Parts, Inc. or to source it from a new supplier. Deere Inc. had a dynamic supply management strategy in place, known as Achieving Excellence Program (AEP). The program was about giving Deere and its suppliers the......

Words: 1498 - Pages: 6

Deere and Complex Parts Case Study

...JOHN DEERE AND COMPLEX PARTS INC. I. Summary of Findings Deere & Company is the global leading manufacturer for forestry and farm equipment, but also produces other equipment such as for construction, commercial and consumer. The company’s total assets amounted to over $34 billion, and thus proves that the company produces quality products patronized by plenty consumers. Deere & Company has been working with Complex Parts, Inc. for a very long time, which earns $3.5 million from the former. They have been working together for the past 10 years. Deere aims to be of world quality, with strong supplier relationships by the use of the Achieving Excellence Program (AEP). The program is an evaluation process regarding suppliers in the business, which results to stronger supplier relationships for better equipment quality in the long run. The performance of Complex Parts gets good scores from the AEP, although is weak in some parts, such as responsiveness, which challenges Deere between choosing a new supplier or changing their standards in the program. II. Background Information Deere & Company was founded by John Deere in 1837, and is headquartered in Moline, Illinois. They are the world’s leading manufacturer of farm and forestry equipment, and also produce construction, commercial and consumer equipment. Other products and services produced by Deere included equipment financing, power systems, special technologies and healthcare. In......

Words: 2022 - Pages: 9

John Deere

...In the John Deere case Scott Nolan has faced a challenge when he accepted the job. His supervisor has requested him to identify and justify which suppliers to integrate in the product development phase, and specify how to construct the interactions with the chosen suppliers. The target of Scott Nolan is to have the new plant up and running smoothly by the target date of July 1998. The market was growing about 15-20% per year and was projected to reach $1.2 billion, or 60,000 units by year 2000-2001. In 1995-1996, John Deere had been outsourcing their manufacturing to Holland, although New Holland produced their own competing skid loaders. New Holland had agreed to sell only the excess capacity to manufacture the same product. Since the market demand was increasing John Deere needed to make more Skid Loaders, although New Holland refused to do so, in return, John Deere had decided to design and manufacture their own skid loaders directly, and become the leading manufacture of Skid Loaders. A solution for John Deere to manufacture directly is to build a new building in Knoxville, TN. In April of 1996 JD in invested in a $35 million site to directly design and manufacture the Skid Loader. By taking back the manufacturing and design of the skid loader, John Deere can really take control of their costs and profits. Since New Holland was a main competitor, John Deere can now differentiate their product from others in the market. John will be able to make their design......

Words: 335 - Pages: 2

John Deere

...Business Analysis on Deere & Company McKenzie R. Mayfield Tarleton State University Dr. Nathan Heller October 31, 2015 Author Note I attest that this document is an original creation submitted in accordance with the requirement for the Comprehensive Written Project (CWP) in Seminar in Business Strategy (GB-5388) during the Fall 2015 academic term. Abstract This document provides an in depth company analysis of Deere & Company (DE). In the first segment of the analysis, an overview of John Deere’s history, product and service offerings, corporate strategy, and a synopsis of the heavy equipment production industry will be evaluated. The second segment includes a financial overview and analysis of the three most recent years at Deere & Company. In order to do so, balance sheets, income statements, and key financial ratios will be collected and evaluated. In the third segment, this paper will examine the heavy equipment market, current industry averages, economic climate, and financial and strategic statuses of competing businesses. After the analysis is complete, a SWOT analysis (strengths, weaknesses, opportunities, and threats) will be conducted in order to identify key success factors and driving forces. Based on the results of the SWOT analysis, the final segment of this document will make recommendations about the strategic actions that Deere & Company should take in the future. Keywords: [Click here to add keywords.] Comprehensive Business Analysis on Deere &......

Words: 2180 - Pages: 9

John Deere

...following report is a consultation analysis of John Deere Component Works costing structure. Included is a discussion of the existing cost system as well as a comparison with the proposal of the Activity Based Costing system. The solutions to the required discussion issues have been thoroughly prepared and are hereby included. Problem Statement: The demand for John Deere Component Work’s (JDCW’s) products has suffered due to the collapse of farmland value and commodity prices. A number of continuous failures in JDCW’s competition for bids have placed an onus upon management to question its current costing methods. As a result, an analysis must be made regarding the current costing methods in order to determine their validity and to aid the company in adopting a more sound costing system. Analysis John Deere Component Works was a subdivision of John Deere and Company which dealt exclusively with the manufacturing of tractor component parts. By the mid 1980’s, JDCW found that its available excess capacity was increasing. To neutralize this problem JDCW attempted to take advantage of the efficiencies of its newly acquired automatic turning machines by bidding on parts offered from within the company. This lead to a direct bid of 275 of the 635 parts offered by John Deere and Company. Out of the possible 275 parts, JDCW was successful in the bidding of only 58 parts, which happened to be low volume parts. This became a concern for JDCW because......

Words: 1761 - Pages: 8