Assignment # 3 Case 5 John Deere and Complex Parts, Inc.
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. ...view middle of the document...
Whereas, the cost management rating of 1 to 5 was based on the performance in five areas like cost management initiative, cost reduction activity, cost index performance, performance during new programs, and global market competitiveness. Wavelength rating was a combined analysis of the supplier’s initiative, attitude, responsiveness, attention to detail, and communication performance, and the technical support rating was a 5-point combined rating of various other areas. Based on the overall performance levels revised annually in the above five categories, suppliers were classified as Conditional, Approved, and Key or Partner and accordingly they were recognized and was provided training. Every quarter, suppliers were given feedback of their performance and informed about the ceiling limits, with key suppliers and Partners receiving recognition and training benefits, approved suppliers eligible for training programs and conditional suppliers neither received any recognition nor training.
Last year’s Complex Parts performance indicating a quality rating of 666, and a delivery rating of 8650, was a matter of concern for the various department officials at Deere Inc. The areas which they felt that Complex Parts Inc. should address were, its inactive involvement in suggesting cost reduction and elimination of cost reduction problems which delayed deliveries, the lag in implementing the Deere quality plan at their new facility in operational from June. A number of the items supplied by Complex Inc. for the new products had not met Deere’s cost targets and reduced Deere’s projected profits on these products and had troubles in providing quotes to Deere Inc. on time. In spite of these challenges faced by Complex Parts Inc. they had competitive advantage in many areas which included their active role in meeting the Deere’s required specification changes, following thoroughly the quality improvement made by Deere. Complex Parts Inc. did a commendable job by internalizing the Deere’s Quality Plan elements, taking a lead role in getting the elements implemented, improving quality performance significantly, and earning ISO certification.
As Complex Parts Inc. had both up side and down side as a supplier, and as the deadline to give recommendations to the project manager was approaching, Deere Inc.’s supplier evaluation team is now faced with a situation to form a conclusion about Complex Inc.
1. Discuss the strengths and weaknesses of John Deere’s Achieving Excellence Program. Consider and discuss other criteria to include in the analysis.
Strengths of Achieving Excellence Program (AEP)
The programs dynamic approach in evaluating suppliers, offered a competitive advantage to deliver world class equipment to customers. The program had a very commendable goal of building long lasting supplier relationships, by designing an evaluation process which promoted communication, trust, cooperation and continuous improvement. The evaluation...