Deere & Company Case Study

Case III: Establishing E-Business Standards at Deere & Company*

Background

Deere & Company is a 163-year-old company with its headquarters based in Moline III. It started of as the only agriculturally equipped company in the United States to have never changed hands. It always remained under the same ownership. It was a decentralized company that comprised of more than 60 business units and sold its products in more than 160 countries. It employed a staggering 39,000 workers. Its annual sales in 1998 was $139 Billion and decreased by $239 Million in the span of a year to $11.7 Billion. The company mainly operated in three different types of businesses namely:

• Equipment Operations which was the largest business under their belt. It comprised of agricultural, construction and forestry, and commercial and consumer lawn care.
• Support Operations was mainly with power systems such as engines and transmission, and service part for Deere equipment.
• Financial Services consisted of credit, which made financing and leasing agreements and health care which managed health care systems for 1,400 companies.

Key Issues

• Acute: Coordination problems in the supply that existed within Deere and if they were in a position to manage the supply chain electronically.
• Chronic: Decentralized system in the supply chain. Similar product being purchased from the same supplier at different prices. Thus, resulting in the supplier taken advantage of the inability of Deere to coordinate purchase quantities.

Analysis

Deere has a decentralized supply chain system. They are facing losses as they are not able to maintain proper inventory of needed stock for production due to which their process of production is being delayed. Paul Morrisey knows that a shift to e-business requires fundamental shift in thinking that had to be reflected in their supply chain process. HE also thinks that they have been looking at things the wrong way and have to think as a brand new company without any advantages. The main motive od all the companies is profit-making, so to ensure that they make a continuous profit from their operations they need to ensure that the process of doing business doesn’t have any loopholes and is operating smoothly. Integrate the electronic market through maintaining a well balanced database and prioritizing the suppliers and ensuring that they understand their duties as well as monitor their actions to avoid the company being taken advantage of by them.