1. What critieria - limit to four-should Scott Nolan use to screen suppliers to be integrated into the early phases of the Deere skid-steer loader development process? Why?
• Product Features. Because the skid-steer loader is a fixed investment asset, product features that improve ease of use (e.g., versatility of load placement), reduce operational costs (e.g., fuel-efficiency), and reduce maintenance requirements (e.g., self-lubricating parts) would make the difference between the Deere brand and competing products.
• Product Range. To better serve the customers, Deere knew that it needed to offer some product variety, as typically required for industrial equipment, given different usage requirements. Therefore, a range of models, perhaps differentiated on load capacity and available options (e.g., hand or foot controls), was needed. • Product Delivery. Deere knew that demonstrating its skid-loader’s versatile functionality and being able to demonstrate and deliver the product to the actual work site was an important sales incentive. • Price. Last but not least, the demand for skid-steer loaders was highly price sensitive. As a result, minimizing cost of goods sold without sacrificing timely delivery of a high-quality Deere skid-loader was imperative.
2. What specific principles, practices, or techniques might be useful to effectively integrate suppliers?
Having worked in supply management for the past 7 years, Nolan was well aware of the general principle of involving suppliers in product development and manufacturing decisions and the frequently touted benefits of lower costs structures, faster product development cycle, and reduced operational inefficiencies. He believed, however, that not all suppliers needed to be or should be involved, especially in the early stages of the new product development process. Furthermore, involving suppliers should not be “lip-service”; the selected suppliers should be well integrated into
References: Roger G. Schroeder. Susan Meyer Goldstein and M. Johnny Rungtusanatham. (2013). Operations Management In the Supply Chain: - Decisions and Cases, Sixth Edition. McGraw Hill/Irwin, New York, NY 10020.