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CHAPTER 5
SUPPLIER RELATIONSHIP MANAGEMENT
[25] Keystone Supplier Development Partnership, Supplier Development Case
Studies,
http://www.wednetpa.com/supplier/overview5.asp,Accessed 14
January 2013.
[26] SABMiller, Strategic priorities: Constantly raising the profitability
of local businesses, sustainably,
http://www.sabmiller.com/index.asp?pageid=1905, Accessed 13 January 2013.
5.10 APPENDIX
APPENDIX 5.1
A5.1.1 JOHN DEEREAND COMPANY PROFITS FROM SUCCESSFUL SUPPLIER
DEVELOPMENT
John Deere and Company, a US-based agricultural equipment manufacturer,
has operated formal supplier development programmes for many years and
has realised significant savings from its efforts. By working with suppliers to
increase production capacity, reduce lead times, and improve overall business
performance, John Deere has created a stronger, healthier supplier network
that costs less to work with and has improved supply management bottom-line
performance.
John Deere has derived many benefits from participation in a formalised
supplier development programme, supported by senior management as a
critical business goal.
By the end of 2001, John Deere had worked on a total of 426 projects, with
$52 000 000 in cost savings and $36 000 000 in cost avoidance. Similar results
were realised in quality, delivery and lead time metrics. Relationships with the
supply base were strengthened, and suppliers became more able to respond to
changes in production schedules and requirements. This increased performance
of the supply base constituted a significant competitive advantage for John
Deere over its competitors.
Another benefit to John Deere of supplier development was the creation of a pool
of talented problem solvers. The training of supplier development engineers in
modern, lean and flexible manufacturing techniques, coupled with the experience
they have in a variety of industries and situations, equipped them well for
positions throughout the organisation. They were equivalent to ‘black belts’ in
the scope of their knowledge, and also possessed a strong appreciation for the
supplier and their relationship to Deere. This perspective put them in a unique
position to be able to integrate the supplier’s processes with Deere.
Supplier development programmes work and create a competitive advantage
for companies that champion such programmes [25].