Supplier Development at Deere & Company
An assignment submitted in partial fulfillment of the requirement for MGT 608
School of Business and Management
Dr. Farnaz Sharifrazi
December 1, 2013
Deere & Company, also known as John Deere, is a leading provider of agricultural equipment with offices, manufacturing facilities, and suppliers in over 160 countries (Company Background, 2001). In order to stay competitive and remain a leader in its industry, Deere & Company has entered into partnerships with its suppliers in an effort to reduce the suppliers’ manufacturing cycle time and help cut manufacturing costs, which would ...view middle of the document...
Some of the implications that this type of supply management approach may lead to are distrust and poor performance, which can ultimately lead to the loss of customers for both parties (Wisner et al., 2012). As trust between Excelsior and Deere breaks down, the partnership will start to break away and will ultimately dissolve, causing one party to lose a supplier and the other one a buyer. If Excelsior does accept Deere’s demands, they will lose 95 percent of their revenues, which will put them out of business. If Excelsior goes out of business, Deere’s business will be negatively affected as they will be required to search and develop a new supplier, which can take a lot of manpower and time. If both parties do not work together in finding a suitable solution that will work for both of them, both Excelsior and Deere will end up losing big in the long run.
If it is not an appropriate tactic, what are some alternatives?
There are countless of alternatives that both Excelsior and Deere can work through. One appropriate tactic would be for Deere to work with Excelsior in order to find possible solutions that would result in a win-win situation for both parties. By working together and collaborating with Excelsior it will be more of a strategic significance for Deere rather than simply a tactical gain (Storey, Emberson, Godsell & Harrison, 2006). Another solution would be for Deere to let Excelsior come up with possible solutions that would help reduce its manufacturing cycle time and cut its manufacturing costs. In short, the overall performance will depend upon the joint performance (Forslund & Jonsson, 2009) of Excelsior as the supplier and Deere as the buyer.
Is this an ethical approach?
Although not illegal, this approach is far from being moral or even ethical. Giving such ultimatum to one’s supplier is unethical because it is forcing them to comply with certain demands that will not benefit from such deal or face going out of business if they do...