Scott Nolan has been offered a position as supply management manager for a new Deere & Company manufacturing facility of a new product the skid-steer loader. One thing his new job requires is for him to make a proposal to identify potential suppliers and integrate those suppliers into the skid-steer loader development process. He must also specify ways to effectively integrate these suppliers in order to meet aggressive target costs.
The product development process is responsible for the generation, specification, and prototyping and finalizing of a product that is to be manufactured according to operational, marketing and financial objectives. Research has shown that involving suppliers in the product development process can yield benefits such as improved product costing, faster product development time and more effective, efficient operations.
Deere & company initiated the creation of the Skid-Steer machine, a 1000-3000 pound capacity versatile construction site machine, more than 25 years ago, but outsourced the product design and manufacturing to New Holland an independent contractor. The skid-steer loader is supposed to sell more than 60,000 units amounting to $1.2 billion by 2000-2001. Deere & Company plans to triple its market share and they want to take back design and manufacturing of the skid-steer loader from New Holland. Deere & Company wants to improve the design and manufacturing of the skid-steer loader with order winning criteria such as improved product features, product range, delivery and price. Deere & Company is going to invest $35 million for building a new design, manufacturing and marketing facility in Knoxville, TN. The goal is to produce an improved skid-steer loader that is 20% lower in price than their best competition by August 1998.
Criterion that Scott Nolan should use to screen suppliers that are going to be considered to be integrated into the early phases of the Deere skid-steer loader development process include the price...