Managing Financial Principles And Techniques Management Essay

Managing Financial Principles And Techniques Management EssayDeeres family is one of the top agriculture equipment manufacturers of the world. Deere does business in almost one hundred sixty countries. There ar 40,000 people working for them world wide approximately. The main headquarters of Deere company are located in Georgia, United states of America. It is one of the oldest company of united state. This company is guided today, as it has been since its beginning, by John Deeres original values of quality, innovation, integrity and commitment. One of the main efforts is to create shareholder value finished the chase of continuous amelioratement and profitable growth.Deere company has a vast variety of products including which are Agricultural Equipment ,Construction Equipment, commercial equipments for grounds care , and Forestry Equipment to help improve the forest, and finally, Deere Power System.In addition, the worldwide net income was $13,947 millions in 2002. This co rporation has sites in all the continents, its worldwide locations include North America, South America, the Caribbean, Europe, Africa, Near and Middle East, and Australia. Deeres major(ip) competitors are Caterpillar, CNH Global, and Mitsubishi.Also, Deere and caller employs some regulations such as the ISO 9000 standards. Finally, some of the supply sources of this organization are experience, industry, sales representatives, and client. Deere Company has the strategy of using single sourcing and quintuple sourcing for purchasing a specific component. Most of them are multiple sourcing, although the goal is try to reduce the number of suppliers. . Most of Deeres suppliers are from the United States. Deere buys raw strong directly from manufacturers non from distributors. Deere is committed to the concept of maintaining its supply chain by actively partnering with its suppliers.Deere is working very closely with its suppliers. They are providing them purpose and re designing m anufacturing facilities and operations. Deere is giving training to suppliers personnel. Providing and facilitating the use of Software packages. Providing on site personnel for specific projects. Reduce suppliers manufacturing cycle. Lower manufacturing terms. cleanse deliveries of finish goods.For this purpose they made a SDG (supplier development conference).SDG is consisted mostly of process engineers. Process Engineers who help the suppliers to improve their operations .Each Deere division had SDGs.and in each SDGs has100 individuals assigned. excelsior is one of the main suppliers for Deere. wood shavings Company is located in Cedar Rapids, Iowa. wood shavings manufactures tractor attachment products.excelsior is a vertically integrated company with very little flexibility. By the prison term progressed and Deere purchased more from Excelsior and Excelsior became more and more reliant on Deere as a customer. In 2000 almost 95 percent of Excelsiors revenue came from Deer es purchases. Deere overly founded itself growing dependent on excelsior. The reason is that there are very few companies which produce tractor attachments. Excelsior also owned the design of those attachments which they make. The business relationship is very all-important(prenominal) for both parties. Excelsior also relied on Deere for most of its sales. Deere also wants to keep Excelsior as a supplier because it pull up stakes be very court prohibitive for Deere to produce these tractor attachments in house.Q 1 Is Deeres tactical maneuver an appropriate?SolutionFrom Deeres point of view yes its an appropriate. Problem is that the manufacturing cycle time for excelsiors antiquated process was 250 days. This is creating alot of problems for Deere and it customers. The rake period is very spacious and the prices are high. The supplier development group created a tem to work on this project. The project is to reduce the cycle time and also minimize the make ups at least 10 pe rcent,The Excelsior equipment project team was assembled in march 1999. This team is consisted of four members. The teams task was to work with Excelsior to redesign its manufacturing process to chance upon the cycle time and cut cost.The team worked for 23 months and made a report .the report showed that the cycle time and cost reduction goals can be achieved. The tactic to achieve these targets is to redesign the manufacturing process and improve their accounting system .Deere will use 5 million $ for this purpose. And Excelsior will give a 5% reduction in price or at least half of the projected savings if not machineed.And on the other hand for excelsior this is not an appropriate tactic. Excelsior didnt want to change their manufacturing process. This was the biggest obstacle which Deere faced. Excelsior did not want to invest in the equipment and facilities recommended by Deere. According to Excelsiors assessments the maximum amount of saving that could be realized by redesig ning manufacturing process would make at most less than 1 percent Difference. And Excelsior believed that its quality is better than IBMs and it had also world class level of work in process. Excelsior was hesitant to invest 5 million $ to implement the changes recommended by the SDGs. They believe that manufacturing process at Excelsior was about as efficient as it could be.Q2 what are the implications of this tactic and the possible consequences, positive or invalidating?Impact of these tacticsJohn PositiveIntegrated supplier relationshipBy applying this tactic supplier relationship will be integrated.Meet customer demandBy implementing this tactic they can easily fulfill the demands od customers.Reduce costsThis will also result in reducing the cost for example if they make more units this will decrease per unit cost. Then definitely they will earn more money.Reduce cycle timeIt will also decrease the time periodImprove profitabilityIt will also increase the profit margin of th e company.Enhanced manufacturing processThey are liberation to invest 5million $ to to increase the efficiency of the manufacturing process.Satisfy their customersIf they will provide a good product less expensive and in less delivery time this will automatically satisfy their customers.NegativeEthically wrongEthically it is wrong to force the supplierCause strainThis will cause a strain in supplier relationshipAggressive push through strategyQ 3 If it is not an appropriate tactic, what are some other alternatives?Supplier developmentSupplier development is defined as any activity that a emptor undertakes to improve a suppliers performance and capabilities to meet the buyers short and long term supply needs.Supplier development requires financial and human resources investments by the both partners and includes a wide range of activities such as training of the suppliers personnel, put in suppliers operations , and ongoing performance assessment.Suppliers development decisionSupp lier development should not apply to all suppliersIt does not make financial reason to develop suppliers of low-value- added, non-strategic commoditiesReasons for supplier development includeSupplier provides an innovative productSupplier provides an innovative processSupplier provides an innovative technologyA long-run advantage exists to the buying firmTo maintain flexibility in meeting changing market demandsSeven step approach to supplier development come a give chase critical product and servicesAsses the relative importance of the products and services from a strategic perspective. Product and services that are purchased in high volume, do not have good substitutes, or have limited source of supply are considered strategic supplies.Identify critical suppliersSuppliers of strategic supplies who do not meet minimum performance in quality, on time delivery, cost, technology, or cycle time are targets for development.Form a cross functional teamThe buyer must develop an internal cross functional team with a clear symmetry for the development initiative.Meet with top management supplierThe buyers cross functional team meets with the suppliers top management team to discuss details of strategic alignments, suppliers performance measurement, improvement, and professionalism.Identify key projectsAfter the promising opportunities have been identified, they are evaluated in terms of feasibility, resource and time commitment, and expected return on investment. The most promising projects are selected.Define details of agreementAfter agreement has been reached on the development projects, the partners must jointly decide on matrices to be monitored such as percent improvement in quality, delivery, and cycle time.Monitor posture and modify strategiesTo ensure continued success, management must actively monitor progress, promote exchange of information, and revise the strategy as business condition warrant. high hat Practices in Supplier DevelopmentProvide trainin g programs and training time to suppliersProvide education programs offline that go beyond trainingProvide improvement focused seminars for suppliersProvide tooling and technical assistance to suppliersProvide supplier support centersLoan executives, such as process engineers and quality managersDrive fear out that a suppliers workforce may have towards supplier development programsSet stretch goals to throw out radical change as well as continuous improvement.Improve accounting systems to enable measurement of improvementsShare the savings from the development improvementsEncourage suppliers to contribute to improving processes at the buyers facilitiesProvide a feedback loop for suppliers to help encourage supplier development effortsImprove the suppliers supply management systemQ 4 Is this an respectable approach?No , In my point of view this is not an ethical approach. Excelsior did not want to implement those changes suggested by the supplier development group team. they were forced by the Deere company to implement those changes to their manufacturing plant. Deere gave the indication that if Excelsior refused to implement changes to manufacturing process they would not remain viable supplier in long run. the main supplier development engineer and project manager also wondered whether this tactic would work or not. and whether it would be an effective way of getting excelsior to improve their manufacturing process.Business ethicsEthics is defined as the study and philosophical system of human behaviour, with importance on the determination of right and wrong, that which is moral, the basic principles of right action, a work or theory on morals, and a standard of showcase set up by any race or nation. Ethical is defined as that which follows the right principles, as defined by a assumption system of ethics or professional conduct. Ethics in business continues to be important across all industries. The importance on ethics inyour environment is due to its relationship to general principles as well as its favourable impact worldwide on your ability to enhance your competitive opportunities, unceasingly improve your processes, ensure total quality throughout your businesses, and increase consistency in your operations.Economic Success Linked to Ethical Behaviour.To have an ethical polity in place is a basicbusiness requirement today. Having suppliers and employees display universal ethical behaviour in their day-to-day operations, however, is an asset. Ensuring a track destroy of outstanding ethical conduct is just as important as product and service quality, competitive prices, and efficient operations.Upsides Downsides of Ethical Behaviour.The upsides of ethical behaviour in a business environment are very positive. The downsides of not encouraging and adhering to business ethics policies include the risk of unethical business coifs that affect your disposition in the market place, unethical behaviour of employees occurring, and/or the risk of legal prosecution.A negative impact on the companys image is difficult and boring to repair. prove Quality and Integrity of Purchasing Activities.Developing an ethical environment within your organization helps you facilitate issue resolution, prevent problems, and create a pleasant and pleasurable workplace. A plan of action for doing this might include1. Stressing the importance that all individuals need to consistently exhibit ethical behaviour2. Educating everyone on your business practice standards3. Raising ethical issues and concerns by providing a forum to do so4. Developing a network of professionals who treat themselves, their co-workers, customers, and suppliers with integrity, honesty, openness, and fairness all of the time5. Educating everyone on the risks involved in unethical behaviour.Q 5 What are some of the implications as far as human resource management concerned? How can the group members better mange the consensus building to present an und ivided front to Excelsior?