...John Deere and Complex Parts, Inc. 1 On Friday, November 22, 2006 Blake Roberts, Hayley Marie, Stan Eakins, and John Pearson, one of John Deere’s supplier evaluation teams, were discussing the performance of Complex Parts. They had provided questionable service to John Deere’s Moline unit over the past year, and they were wondering if this merited giving Complex Products’ business to a different supplier. They needed to recommend a course of action to their project manager 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 include equipment financing, power systems, special technologies, and healthcare. Net sales in 2006 were over $19 billion with total assets of more than $34 billion. Cost of goods sold in 2006 was approximately $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 $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 Deere’s needs at the time...
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...John Deere and Complex Parts, Inc. 1 On Friday, November 22, 2006 Blake Roberts, Hayley Marie, Stan Eakins, and John Pearson, one of John Deere’s supplier evaluation teams, were discussing the performance of Complex Parts. They had provided questionable service to John Deere’s Moline unit over the past year, and they were wondering if this merited giving Complex Products’ business to a different supplier. They needed to recommend a course of action to their project manager 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 include equipment financing, power systems, special technologies, and healthcare. Net sales in 2006 were over $19 billion with total assets of more than $34 billion. Cost of goods sold in 2006 was approximately $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 $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 Deere’s needs at the time...
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...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 necessary...
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...Supplier Development at Deere & Company By Gil Lopez An assignment submitted in partial fulfillment of the requirement for MGT 608 School of Business and Management National University Dr. Farnaz Sharifrazi December 1, 2013 Background 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 in turn benefit Deere as well. Through supplier development group (SDG) project teams, Deere and Excelsior, the main supplier of tractor attachments, worked together in order to formulate solutions to achieve such goals. Is Deere’s Tactic an appropriate one? Forcing a supplier to change their processes, invest millions of dollars for the implementation of such changes, and reduce their prices does not seem like an appropriate tactic or a good business practice. Although this tactic may work for major retail corporations such as Walmart, effective supply chain management relies on high levels of trust, cooperation, collaboration and honest, accurate communications, all of which is missing from the deal that Deere is trying to obtain (Wisner, Tan & Leong, 2012). By trying to control...
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... | | [pic] Executive Summary The purpose of this report was to analysis costing system at John Deere Component Works (B). Specific objectives were to analyze the reports prepared by William and Vintila and offer recommendations on their suggestion. Table of Contents 1. Executive Summary ………………………………………………………………………………………………………. 2 2. Table of Content ………………………………………………………………………………………………………………..3 3. Introduction ………………………………………………………………………………………………………………… 4 4. Conclusion & Recommendation ………………………………………………………………………………………………. 5 5. Discussion 5.1 Product Cost under ABC ………………………………………………………………………………………….. 6 5.2 Product Mix has shifted ………………………………………………………………………………………….. 6-7 5.3 Assumption about Cost Variability in ABC ………………………………………………………………. 7-8 5.4 Development of ABC ……………………………………………………………………………………………… 8 5.5 Implementation of ABC …………………………………………………………………………………………. 8-9 5.6 Acceptance of ABC ………………………………………………………………………………………………… 9 5.7 Increasing Lot Size ………………………………………………………………………………………………….9-10 6. References …………………………………………………………………………………………………………………………….11 Introduction John Deere had been structured to be a captive producer of parts for...
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...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 internal...
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...Case Study of John Deere Contents OVERVIEW OF JOHN DEERE 3 A. PRODUCTS 3 B. MARKET CONDITIONS 4 C. COMPETITIVE LANDSCAPE 6 II. 2012 FINANCIAL STATEMENT ANALYSIS 7 A. REVIEW OF INCOME STATEMENT AND BALANCE SHEET 7 B. REVIEW OF KEY FINANCIAL RATIOS 11 C. REVIEW OF FINANCING ACTIVITIES 16 D. RECOMMENDATIONS – Business Performance Improvement 19 E. RECOMMENDATIONS – Buy/Sell/Hold Strategy 20 III. APPENDIX 21 IV. EXHIBIT 2 - ACCOUNTING POLICIES 22 V. Bibliography 24 VI. DEERE & COMPANY – 2012 10K financial statements 25 A. CONSOLIDATED INCOME STATEMENT 25 B. CONSOLIDATED BALANCE SHEET 26 C. CONSOLIDATED STATEMENT OF CASH FLOWS 27 * OVERVIEW OF JOHN DEERE PRODUCTS John Deere & Company is a publicly traded company headquartered in Moline, IL. The company’s roots trace back into the 1800’s when John Deere began with an idea to assist farmers and would forever change the agricultural industry. Today with over 66,000 employees and a corporate family that has nearly 650 companies’ worldwide, Deere ranks number 85 on Forbes list of top 1,000 companies. With over $56 billion in assets and a market value that tops $31 billion, Deere’s financial position is very strong. We will present a detailed analysis of the firm to see how it stacks up against the Caterpillar, the market leader. We will exam key financial ratios and finally give a recommendation on whether the stock is a buy, sell or hold. Deere operates its business...
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...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 2007...
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...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...
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...l y Su p p l i e r I n t e g r a t i o n i n t h e De s i g n o f t h e Skid-Steer Loader1 “Congratulations, Scott. You are the new supply management manager of our new Deere & Company Commercial Worksite Products manufacturing facility in Knoxville, Tennessee. As you know, we really need your help to make this new facility fully operational in 24 months. I am sure you realize that a critical responsibility of your new job is to integrate suppliers into the product development process for our own Deere manufactured skid-steer loader as quickly as needed. You will be reporting directly to me, and I need a proposal from you by the time we meet next week on June 15, 1996.” As Scott hung up the telephone with James Field, plant manager and his immediate boss, he realized that this was not a simple request. In his proposal, he knew he would need to (a) identify and justify which suppliers to integrate in the product development phase, and (b) specify how to structure the interactions with these chosen suppliers. The recommendations in his proposal had to ensure that this new plant would be up and running smoothly by the target date in July 1998. Deere & Company Deere & Company, headquartered in Moline, Illinois, had more than 150 years of history, making it one of the world’s oldest business enterprises. A well-respected company, Deere & Company had a core business portfolio in 1996 comprised of the manufacturing, distributing, financing and servicing of agricultural equipment...
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...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...
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...l y Su p p l i e r I n t e g r a t i o n i n t h e De s i g n o f t h e Skid-Steer Loader1 “Congratulations, Scott. You are the new supply management manager of our new Deere & Company Commercial Worksite Products manufacturing facility in Knoxville, Tennessee. As you know, we really need your help to make this new facility fully operational in 24 months. I am sure you realize that a critical responsibility of your new job is to integrate suppliers into the product development process for our own Deere manufactured skid-steer loader as quickly as needed. You will be reporting directly to me, and I need a proposal from you by the time we meet next week on June 15, 1996.” As Scott hung up the telephone with James Field, plant manager and his immediate boss, he realized that this was not a simple request. In his proposal, he knew he would need to (a) identify and justify which suppliers to integrate in the product development phase, and (b) specify how to structure the interactions with these chosen suppliers. The recommendations in his proposal had to ensure that this new plant would be up and running smoothly by the target date in July 1998. Deere & Company Deere & Company, headquartered in Moline, Illinois, had more than 150 years of history, making it one of the world’s oldest business enterprises. A well-respected company, Deere & Company had a core business portfolio in 1996 comprised of the manufacturing, distributing, financing and servicing of agricultural equipment...
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...organization receive in turns of funding and management support? Is IT a “value adding” area? Or merely a “cost center”? I used to work for John Deere in Coahuila, Mexico. What is very interesting is that approximately 10 years ago the IT administration barely existed, as they didn’t even have a CIO. In that time, maintaining operational data centers running was more than enough. Today, the expectations from the CIO are much more. John Deere expects that the CIO be a business leader, not only an administrator of TI; JD expects that he leads a complex critical mission as any other operation in the company and work shoulder to shoulder with the business units to help improve the performance and efficiency of the company. The IT administration is led by the CIO and the CIO reports directly to the CEO. The CIO is involved in the steering committees because he is the one who has the ability to deliver technology solutions to the business requirements. If the CIO weren’t involved in the strategic planning process it would be very difficult for him to contribute to the transformation of the organization using Information Technology. Therefore, besides his own experience in the area, the CIO also has a financial background to be able to demonstrate the tangible benefits of investing in Information Technology. This big decision that John Deere took back then, makes me think that the IT management receives good funding and management support. 2. Think about a recent IT investment...
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...Deere & Company was founded in 1837 by a blacksmith named John Deere who became a manufacturer of agricultural equipment through his invention of a newly designed plow. Although steam tractors were introduced to farms in the 1880s, Deere did not start building their iconic John Deere tractors until they purchased a small tractor company, Waterloo Boy, in 1918 which was long after John Deere’s death in 1886. Deere is deeply rooted in agriculture as evidenced by their manufacturing of farm equipment and in their development of efficient farming strategies, logistics, and insurance products. The company has grown to be one of the world’s largest and most recognized manufacturers of agricultural, construction, forestry, and turf equipment despite several tumultuous periods and celebrated their 175th anniversary this year, 2012. 0 In the 1984 annual report, the company referred to increasing competitive pressures and the need to provide for more value per dollar to the customer. The ways that the company proposed to achieve this seemed to revolve around the "technological fix" with references to use of robotics and increased efficiency in operations. Quality was beginning to be recognized as important in design, manufacturing, and in meeting customer needs for reliability in the forestry equipment line. 1 In the 1987 report, an emphasis on quality seemed to be developing, even though cost-reduction and value to the customer continued as an underlying theme. The "total value"...
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...Mohamud Hassan DSC434 John Deere case study Due date 11/11/14 Early Supplier Integration in the Design of the Skid-Steer Loader Scott has been offered a new position as supply management manager for a new Deere & Company manufacturing facility of designed product skid-steer loader. As part of his new job, he must make a proposal to identify specific suppliers to integrate into skid-steer loader development process and specific ways to effectively integrate these suppliers in order to meet aggressive target costs. Scott faced many problems during his time at Deer and Company. For example, Scott is required to produce a proposal that outlines how the company is going to manage the early supplier integration into the design and manufacturing of the new Deere Skid-steer loader. On the other hand, suppliers will have to be integrated based upon strict selection guidelines that will prove to be critical in improving the new Deere skid-steer loader. Some of the issues or problems the company was facing. 1.) One of the problems that company facing is Skid-steer loader from Deere & Company lacks of market. Deere &Company did not design, engineering and manufacturing the skid-steer loader itself, on the opposite, they put it in the hand of a third party. They had contracted the engineering and manufacturing to new competitiveness and no significant benefits over competing Holland, which is also sell same product, competing in the same market product and...
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