Explain the global challenges in Supply Chain Management and relate with the facts given in the case  study.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
icon
Related questions
Question

Deere & Company (brand name John Deere) is famed for the manufacture and supply of machinery
used in agriculture, construction, and forestry, as well as diesel engines and lawn care equipment. In
2014, Deere & Company was listed 80th in the Fortune 500 America’s ranking and was 307th in the
2013 Fortune Global 500 ranking. 

Supply Chain Cost Reduction Challenges: Deere and Company has a diverse product range, which
includes a mix of heavy machinery for the consumer market, and industrial equipment, which is made to
order. Retail activity is extremely seasonal, with the majority of sales occurring between March and July.

The company was replenishing dealers’ inventory weekly, using direct shipment and cross-docking
operations from source warehouses located near Deere & Company’s manufacturing facilities. This operation was proving too costly and too slow, so the company launched an initiative to achieve a 10%
supply chain cost reduction within four years. 

The Path to Cost Reduction 

The company undertook a supply chain network-redesign program, resulting in the commissioning of
intermediate “merge centers” and optimization of cross-dock terminal locations. 
Deere & Company also began consolidating shipments and using break-bulk terminals during the
seasonal peak. The company also increased its use of third-party logistics providers and effectively
created a network that could be optimized tactically at any given point in time. 

Supply Chain Cost Management Results: Deere & Company’s supply chain cost-management
achievements included an inventory decrease of $1 billion, a significant reduction in customer delivery
lead times (from ten days to five or less) and annual transportation cost savings of around 5%

1. Explain the global challenges in Supply Chain Management and relate with the facts given in the case 
study.  

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.