Case Study Early Supplier Integration in the Design of the Skid-Steer Loader

Case Title: Early Supplier Integration in the Design of the

Name: Skid-Steer Loader

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  • Who: Scott Nolan Supply management manager Facts
  • What: New product development process needs integration of suppliers
  • Why: Improve competitive advantages
  • When: From 1996 to 1998


Immediate |Basic | |Issues (An ISSUE is a point in question or |a matter in dispute . Do not list facts. )

1. Skid-steer loader from Deere & Company lacks of market


hey 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 product features. niche, and New Holland only produce product of Deere & Company through

2. the market penetration strategy may not work smoothly as it|its excess capacity. Supposed to by the target date in 1998

2. the company requires so many criteria to be fulfill in a not long


ecide and find appropriate suppliers in different product period, including improve product features, broaden product range, development phase and principles and practices |offer better product delivery and service, and lower product price, which needs lower cost of product.

3. the company wants to lower cost, faster product development cycle and reduce operational inefficiencies. Designate Urgency/Importance (high or low) Designate Urgency/Importance (high or low)

B. Apply frameworks and tools |Case Data Analysis


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, which also have competitive relationship with the company about same product

2. the goal of the headquarters is too aggressive and unreasonable to be accomplished as a short run goal. Which with more than tripling its market share, while they only have 1 to 3 percent variation now.

3. as a new manufacturer, they want to minimize cost of goods sold as much as possible


1. regain direct control of the product’s design and manufacturing Alternative Generation

2. (1)based on valid databases, decide a more reasonable goal about short run, middle run and long run, get more elastic with the target time.

And not only focus on fundamental strategy, but get more specific step and phase goal with the market penetration strategy to focus. (2)classify the primary and secondary of four areas goals about order-winning criteria at different period of produce progress. 3.

dentify, select and justify suppliers to integrate with each phase of produce skid-steer loader; also specify the principles, techniques and practices to enhance integration of each phase supplier.

D.Decision Criteria

1. get capital investment to design and manufacturing the product

2. alidity of goals and valid time cycle for each goal

3. (1)for market period, the company should select suppliers who refers to information system industry to help Deere know which kinds| | |of features are more important and popular to consumers.

So that they can focus more on several features to maximize produce’s attraction with fixed capital. (2)for product design period, Deere should pick suppliers who are relative to raw material, which offer special or little capacity of material, and design model industries, to maximize utility and minimize cost during engineering. Also to test model.

Besides, the company should keep these suppliers in later progress in case of get cheaper price when customers require special models or other features. Then keep dominant position in broad range of product.

(3)for produce period, they should choose suppliers in raw material industry, which can provide large amount of material, and companies who produce machine used to produce skid-steer loader and other relevant parts to lower cost, which is a premise to have competitive price in the market They also needs some suppliers relate to energy that needed through produce process, such as chemical energy, electronic energy, paper and other office supplies. (4)Deere also needs companies in transportation industries to work as their suppliers, to hold profit though offering product delivery service, and increase customers’ satisfaction about lead time and other service.

E. 1. Qualitative: service attitude, own features which can bring competitive advantage

Alternative Assessment

2. Quantitative: capacity of the loader, and capacity about produce product.

F. Predicted outcome

Preferred Alternative

1. get capital investment to design and manufacturing the product

2. validity of goals and valid time cycle for each goal

3. hose different suppliers at different progress phase, and maintain some of the supplier through whole process.

G. Who: Scott Nolan

Action ; Implementation

What: use supply chain to minimize cost and get maximum benefit and competitive advantages. Plan

When: from 1996, and target time is due to 1998

Where: Deere ; Company

How: select suppliers and use different practices Missing Information Assumptions