John Deere

1046 Words Mar 11th, 2009 5 Pages
John Deere & Company manufactures and distributes agriculture equipment as well as a broad range of construction and forestry equipment. The company is partnered with FedEx in order to maintain the logistics flow involved with the company’s transactions. FedEx is responsible for providing outsourced transportation services to 11 Deere facilities across the US and Canada. The 11 Deere facilities have different service agreements with FedEx in terms of cost and service depending on the type of business unit.
With different prices and services across the facilities, management is trying to identify opportunities to standardize costs and services across the business units. The goal of this case study is to update Deere and Company’s
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If an IT system is put in place where trucks can be tracked on route, load capacity, and arrival time, the outbound and inbound logistics can be controlled in a precise fashion optimizing full truck loads per shipment and precise arrival times to minimize inventory holdings. In essence the mobile trucks will become mobile inventories dropping holding costs significantly. Furthermore, Deere will be able to eliminate duplication of tasks because those who dealt with outbound logistics can service inbound logistics as well. Coordination of the two activities in the supply chain will optimize Deere’s supply chain at each plant giving it an advantage over other competitors who outsource inbound, outbound or a combination of the two. This is because by keeping both in house, Deere may be able to continuously improve their management of logistics and reduce costs. Deere is more flexible when they in-source outbound and inbound logistics because they can send trucks to service the current logistics need. Performance measurement is also more efficient especially if the aforementioned IT system is utilized. Furthermore, cost reductions will ultimately be seen due to better utilization of infrastructure, IT and human resources if our proposal is implemented.
Deere may not see drastic changes in cost reductions in the first year as employees are being accustomed to standardized on-site services, having control of the inbound

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