Deere’s Product Delivery Process

Supply Management at Deere & Company enables the effective delivery of world-class products and support systems to worldwide markets via its contribution to the company’s Enterprise Product Delivery Process (EPDP). EPDP is a multi-step program that was adopted in the early 1990s to bring more of a process orientation to product development (1). As an example, the Commercial and Consumer Equipment Division’s John Deere Turf Care (JDTC) assembly plant in Fuquay-Varina, N.C., uses EPDP to meet internal quality, cost and delivery commitments while satisfying external requirements. The Supply Management staff plays an important role in EPDP.

It is important for organizations to integrate suppliers into the new product development (NPD) process (2). JDTC is no exception. Deere calls this “supply chain integration,” or “the aligning of supplier and Deere resources and involving key suppliers in very early phases of the product delivery process in order to maximize design, cost, technology, quality and speed to market (3).”

Supplier involvement at JDTC is not managed solely by the purchasing department. It is an integrated task that is carried out by several business functions. Researchers say this is the norm (4). However, since purchasing specialists are a key liaison between the supplier and the buyer, their involvement in the NPD process is an important element of a company’s initiative to shorten the time to market and reduce costs (4).

Regarding this initiative, there are two factors that researchers believe aid the early involvement of purchasing in the NPD process: organization and personnel (5). JDTC’s Supply Management has made a concerted effort to enable this integration by means of both factors.

Supply Management at John Deere Turf Care (JDTC) is organized such that the workforce involved with the purchasing function is divided into two primary categories: planners and specialists.

Supply Management Planners work under a Materials Acquisition Manager, and are tasked with overseeing the flow of incoming raw materials to support production. A JDTC Supply Management Specialist’s job is more directly responsible for involving suppliers in the new product development process. These employees work as either Order Fulfillment Process (OFP) Specialists or Product Delivery Process (PDP) Specialists.

OFP Specialists are tasked with overseeing “commodities groups.” They manage a collection of technologically similar parts and related suppliers. They are responsible for supplier integration and communication, or making certain that suppliers capably meet JDTC’s quality, delivery, and price requirements.

PDP Specialists manage all parts associated with a newly designed product. They handle a broader array of technologies and are more involved in the new product development process. As such, they are co-located with the design team for a new product. They follow the PDP from start to finish. A JDTC PDP Specialist usually works on a NPD project for two years, but one driving force behind their involvement is to further reduce the time that it takes to develop and test new products.

According to Wynstra, Lakemond, and Echtelt, in this configuration, “a purchasing coordinator is added to the project team and takes care of coordinating purchasers external to the project team (4).” In Deere lingo, a “PDP Specialist works with the product design team and is responsible for coordinating OFP Specialists to integrate suppliers for a new product.”

Wynstra observed this configuration at BT Industries, a Swedish manufacturer of warehouse trucks. The researchers noted that, “although BT works with a purchasing coordinator (PDP Specialist) in product development projects, engineering specialists and specialized operational purchasers also worked together on a development project, more on an ad hoc basis. The engineering specialists were familiar with the supply market within a specific area, but more from a technical perspective. The operational purchasers (OFP Specialists) had a commercial orientation but were not integrated in the project, indicating a situation of indirect purchaser involvement (4).”

So, what qualifies employees for these positions? Wynstra reported that at BT Industries, the purchasing coordinator had been previously employed as an engineer, which facilitated work with engineering specialists. Contacts at DAF, a Dutch truck manufacturer, mentioned that “purchasers must work more as generalists than as specialists in the future.” The researchers’ observations of other manufacturers led them to propose that, in all cases, advanced competencies and skills of the purchasers seemed to facilitate purchasing involvement in product development (4). John Deere, as evidenced by their current staff within the Commercial and Consumer Equipment Division and their active participation in the SCRC, makes a concerted effort to ensure that it has qualified human resources in these important positions.

References:

(1) Lawson, J. (July, 1999). Speech: Tools and technology for a new millennium. Rapid Prototyping Conference ’99.

(2) Handfield, R., Ragatz, G., Petersen, K., Monczka, R. (1999). Involving suppliers in new product development. California Management Review.

(3) JD Supply Network Website. (July, 2003).

(4) Lakemond, N. Echtelt, F, and Wynstra, F. (Fall, 2001). A configuration typology for involving purchasing specialists in product development. The Journal of Supply Chain Management.

(5) Wynstra, F. Axelsson, B., and Van Weele, A. (2000). Driving and enabling factors for purchasing involvement in product development. European Journal of Purchasing and Supply Management.