John Deere and Complex Parts

Topics: Costs, Cost, New product development Pages: 4 (979 words) Published: November 27, 2009
Strengths of the AEP: (Q1., p. 109)

- Evaluation is carried out by Deere personnel from different departments such as supply management, operations, quality engineering etc... This makes the evealuation more transparent and comprehensive since the opinions of diverse personnel from different departments are taken into account - Suppliers were evaluated in five key areas, thus making the evaluation all inclusive - The use of the wavelength rating is an innovative approach to measure the supplier's focus on quality, cost etc... - The cost, wavelength and technical ratings are consensus composite ratings, which measures a variety of underlying aspects, rather than provide a brief overview. - Suppliers were classified into 4, making it easy to identify where each supplier stood with regard to others - The annual revision of performance level cutoffs is another strength of the AEP. Periodic revisions make sure that the ratings reflect current changes. - The supplier performance summary provided each quarter provides suppliers with all pertinent data related to their classification - Training and recognition are only provided to suppliers with high ratings, thereby acting as an incentive to suppliers with low ratings to catch up.

Weaknesses of the AEP:

- The weakest category tends to skew the overall evaluation, which would work against suppliers providing consistent service with minor glitches. These glitches tend to be amplified in the rating - Training is not provided to conditional suppliers, which is counter productive. A training program for such suppliers is likely to improve performance - The delivery and quality ratings are not composite ratings. Breaking down these ratings into individual components would provide more clarity. For example, the delivery rating makes no mention of the percentage of late, early or over deliveries.

Other Criteria to be included: (Chapter 3, page 66)

- Total cost of Ownership including cost of special handling,...
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