As the new supplying manager, Scott Nolan is required to draft a proposal that prescribes how Deere will manage early supplier integration and make Deere skid-steer loader. The process of integrating suppliers should vest on guidelines that can improve the new Deere Skid-steer loader. This paper dissects supplier selection process that Deere should undertake and the techniques for selecting the suppliers. The paper also analyses the challenges of the process and ways of surmounting them. The subsequent section encompasses the benefits of supplier chain integration and supplier evaluation and selection form.
The first step is defining business need. According to Bozarth and Handfield (2015), defining business is the most challenging step in supply chain selection. During this stage, it is paramount that the company conceptualizes the overall picture of what is going to be done by analysing the current situation and the problem that needs to be addressed. The company should also consider the amount of resources that the company is willing to spend, in terms of finances, technology, and the personnel. In this context, the business need is to develop skid-steer holder to improve services at the Deer Company. The second step is determining specifications. This involves assessing what the company is expecting to obtain at the end of the deal. The selection decision will be premised on the identified specifications. At this stage, suppliers negotiate the maximum or minimum requirements (Chopra, 2016). Deer Company will have to present the information in comprehensive, clear, realistic, and in official format.
The next step is agreement on the measurement criteria. Some of the applicable criteria in selection process include size, production capabilities, logistics fit, flexibility, reliability, and quality management (Daniel, 2018). In the modern context, most companies, like Deer, prefer building partnerships in order to improve their operations efficiency. The fourth step is identification of buying alternatives. To identify buying alternatives, the company must conduct adequate background research to obtain sufficient information about the suppliers. Deere Company will have to review its sourcing strategy before making selection decision. Some of the issues to consider during identification of alternatives include transportation and exchange rate.
The next step is supplier selection. This is a critical part of the procurement strategy. The first task is to invite and inform all the new suppliers in Holland concerning the Deere’s intention to design and develop its own skid-steer loader. A request is then sent to the listed companies to quote their price. Besides quoted price, Scot Nolan will have to consider record of accomplishment of the listed companies in terms of their performance in service and delivery (Heizer et al., 2017). Companies with long experience in supplying skid steer are given first priority during the selection. Deere will then invited suitable supplier that it intends to collaborate with, based on their experience and market positioning in supplying skid steer as well as its spare parts. A supplier that has the capability to manufacture a variety of the machinery parts should be considered as a joint partner in production or delivery. One of the advantages of sourcing worldwide is that it provides springboard for Deere skid-steere loader to be distributed at wider location with minimum supply chain overheads. Bearing that Deere is a multinational company that has markets in over 160 countries, the company can maximize its capability in local sourcing within these countries during finishing stage of some parts. Sourcing some parts locally enables the company to minimize delivery time and maintain efficiency.
The evaluation of the suppliers should take into consideration industry certifications, ISO, and quality. Since Deere is a multinational company, international standards— in terms of product quality, price, and delivery concerns— should be considered during the selection. In addition, Deere will have to ascertain the supplier’s capability to supply adequately as ordered by the company. According to Jacobs and Chase (2018), organizations should critically assess capital security and production capacity of the supplier before making selection decision. This is because the supplier will collaborate with Deere during a long period and therefore it must be willing and have the capacity to adhere to certain payment conditions. Another approach of selecting the supplier is examining the interest of the suppliers to be part of design and manufacturing collaboration— through assessment of their research and development capability (Swink, 2011).
The evaluation should be underpinned on the level of partnership the supplier is willing to have. This is because Deere expects— not just supplying but— warranties, technical support, and technical service from the supplier in order to improve product quality. Moreover, Deere will have to gauge and compare the cost of dealing with the listed suppliers. After comparing the payment amount, the supplier with company that has the best offer is picked. Although Deere is looking for low cost, the latter is not the major determinant of selection since high quality is also a concern. Similarly, Deere could select suppliers from companies that undertake similar programs by optimizing supplier integration models to ameliorate its supplier management strategy.
Pre-qualification process helps the company to narrow down the set of suppliers to suitable ones. One of the prequalification technique is Cluster Analysis, which is derived from statistics (Agarwal and Rathore, 2016). This method applies sorting algorithms for clustering the number of items that are defined by set of scores as obtained from the clusters. Another pre-qualification method is Analysis Data Envelopment (Agarwal and Rathore, 2016).. This method categorizes suppliers in terms of efficiency and inefficiency. Evaluation of suppliers is based on inputs and outputs. Categorical Methods can also be employed in pre-qualification. This involves qualitative and systematic analysis based on comparative advantage and historical data of the suppliers. Deere Company can use these techniques for their pre-qualification process.
These approaches employ quantitative criteria to make suppliers selection decisions. MP techniques are substantive in optimizing both single and multiple objective models. Multi Objective Models help to address more than single matching criteria. Another MP technique is Goal Programming Model, which enables decision-makers to be flexible in targeting a range of set targets on many criteria (Agarwal and Rathore, 2016).
Deere Company can implement MADMT address the problems that emanate from the supplier’s selection criterion. The first multi-attribute technique is Analytical Hierarchal Process (Bag, 2016). This decision-making technique is vital for prioritizing alternatives. The method adopts both quantitative and qualitative criteria. Ideally, hierarchy process makes use of “ratio scale for human decision” to select criteria alternatives. Another MADMT is Analytical Network Process (Bag, 2016). The method encompasses the dependence and feedback of clusters that are critical in decision-making process. Analytical process helps in controlling network of criterion and interactions among the elements and clusters. The third multi-attribute technique is Total Cost Ownership Mo del, which quantifies and summarizes various choices of suppliers. Outranking Methods are also common MADMT approaches that are essential in helping decision-makers to solve multi criteria problems (Agarwal and Rathore, 2016). Outranking focuses on compensatory and competent deals in circumstances of imprecision.
AI methods are underpinned on software systems by using experience and historical data. Common AI techniques ate Case Based Reasoning Systems (CBRS) and Artificial Neutral Network (ANN). CBRS provides decision-makers with important information and experience based on the previous decision-making process (Autry and Moon, 2016). ANN enables the company to save time and money.
Defining business need may possess challenge of understanding the whole picture in terms of strategic fitness and the required technology to implement the collaboration process. Determining specifications using irrelevant techniques may impose serious threat to the company especially if it settles on the suppliers that are incapable to deliver quality and value. Quantifying assessment criteria involves a difficult process. Evaluating supplier’s commitment, managerial concerns, supplier’s growth capability, business knowledge, and plans of the supplier is a tedious process, particularly when there are a large number of suppliers. Another challenge in assessment process is that Deere will have to access and conceptualize suppliers’ characteristics and qualities.
Daniel (2018) observe that supplier assessment and selection involves a complex framework of less tangible issues of openness, trust, and commitment. Therefore, evaluation of the supplier’s efficaciousness requires the firm to invest a substantial amount in the selection process. Similarly, supplier integration may become difficult if there is no coordination between the leadership of the selected suppliers (Monczka et l., 2016). Effective integration with suppliers requires adequate sharing of information between the companies, which may not be easy. Logistic management, setting standards of trade, and customer order management may be serious challenge during integration (So and Sun, 2010).
In order to mitigate the aforementioned challenges, Deere Company must establish strong employment relationship during the first stage to reduce resistance during integration process (Wang and IGI Global, 2012). In addition, the company should employ strong strategic communication plan to outline its maximum and minimum specifications for the integration process. Deere Company should also invest in research to provide the procurement management team with adequate information and insight on the criteria to use during the selection process and identification of the buying alternatives. Similarly, the company should allocate adequate resources for technology systems that aid in selection of the appropriate suppliers. (Winser et al., 2014) To facilitate integration, the organization should have high quality, updated and relevant data on the supplier’s business and performance history.
Integration of suppliers promotes information flows among the companies. Application of adequate technology on the integration of supply chain functions can reduce complexities in the operation (Belvedere and Grando, 2017). Supply chain integration can mitigate both detail complexity— where there is, need to manage many variables— and dynamic complexity, which occurs when the causation and effect are distinctive. In addition, integration helps to save operation cost by reducing time scheduling, transportation cost, and untimely capacity planning. Integration of supply chain also helps to reduce problems associated with logistics concerns. Some of the logistic challenges that a company is exposed to include fragmented regulations, inadequate intermediaries, and unpredictable variations in taxes and duties (Heizer et al., 2017). Supply chain integration also enables the company to improve its service quality and delivery hence gaining competitive edge over the rivals.
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ix. Materials |
x. Services |
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Description |
No. |
State of maintenance |
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a |
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b |
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c |
Does the supplier has maintenance schedule?
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Apprenticeship |
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On-Job training |
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In-house training |
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Outside training |
Is the workmanship satisfactory?
If yes, what kind of certification does the supplier has?
If yes, for how long? _____________________
Comment on General Observation
_________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Evaluated by:
Approved by:
Managing Director Name ___________________ Signature________ Date_________
References
Agarwal, S., & Rathore, C. S. (2016). ‘Supplier Selection Process in Supply Chin Management’. International Journal in Engineering Sciences and Research Technology, Vol.5, no. 9, pp24-29.
Autry, C. W., & Moon, M. A. (2016). Achieving supply chain integration: Connecting the supply chain inside and out for competitive advantage. (1st ed.). Pearson FT Press.
Bag, S. (2016). ‘Service Supplier Selection using Analytic Hierarchy Process’. Journal of Supply Chain Management Systems, Vol.5, no.3. doi:10.21863/jscms/2016.5.3.035
Belvedere, V., & Grando, A. (2017). Sustainable operations and supply chain management. Chichester: John Wiley & Sons Ltd.
Bozarth, C. C., & Handfield, R. B. (2015). Introduction to operations and supply chain management (4th ed.). Pearson.
Chopra, S. (2016). Supply chain management: Strategy, planning, and operation (6th ed.). Pearson Education India.
Daniel, R. (2018). The Analytic Hierarchy Process. Hauppauge: Nova Science Publishers, Incorporated.
Heizer, J., Render, B., & Munson, C. (2017). Operations management: Sustainability and supply chain management.
Jacobs, F. R., & Chase, R. B. (2018). Operations and supply chain management (14th ed.). McGraw-Hill Education.
Melander, L. (2011). Collaborative New Product Development: Supplier Selection and Purchasing. Linko?ping: Linko?ping University Electronic Press.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2016). Purchasing and supply chain management (6th ed.). Cengage Learning.
So, S., & Sun, H. (2010). ‘Supplier integration strategy for lean manufacturing adoption in electronic?enabled supply chains.’ Supply Chain Management: An International Journal, Vol. 15, no.6, pp474-487. doi:10.1108/13598541011080455
Swink, M. (2011). Managing operations across the supply chain. New York: McGraw-Hill Irwin.
Wang, J., & IGI Global. (2012). Information technologies, methods, and techniques of supply chain management. Hershey, PA: IGI Global (701 E. Chocolate Avenue, Hershey, Pennsylvania, 17033, USA.
Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A balanced approach. Cengage Learning: Boston, Mass.
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