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
