Eskom Procurement Book 2015

SUPPLIER RELATIONSHIP MANAGEMENT

[25] Keystone Supplier Development Partnership, Supplier Development Case Studies, http://www.wednetpa.com/supplier/overview5.asp, Accessed 14 January 2013. [26] SABMiller, Strategic priorities: Constantly raising the profitability of local businesses, sustainably, http://www.sabmiller.com/index. asp?pageid=1905, Accessed 13 January 2013.

5.10 APPENDIX

APPENDIX 5.1

A5.1.1 JOHN DEEREAND COMPANY PROFITS FROM SUCCESSFUL SUPPLIER DEVELOPMENT John Deere and Company, a US-based agricultural equipment manufacturer, has operated formal supplier development programmes for many years and has realised significant savings from its efforts. By working with suppliers to increase production capacity, reduce lead times, and improve overall business performance, John Deere has created a stronger, healthier supplier network that costs less to work with and has improved supply management bottom-line performance. John Deere has derived many benefits from participation in a formalised supplier development programme, supported by senior management as a critical business goal. By the end of 2001, John Deere had worked on a total of 426 projects, with $52 000 000 in cost savings and $36 000 000 in cost avoidance. Similar results were realised in quality, delivery and lead time metrics. Relationships with the supply base were strengthened, and suppliers became more able to respond to changes in production schedules and requirements. This increased performance of the supply base constituted a significant competitive advantage for John Deere over its competitors. Another benefit to John Deere of supplier development was the creation of a pool of talented problem solvers. The training of supplier development engineers in modern, lean and flexible manufacturing techniques, coupled with the experience they have in a variety of industries and situations, equipped them well for positions throughout the organisation. They were equivalent to ‘black belts’ in the scope of their knowledge, and also possessed a strong appreciation for the supplier and their relationship to Deere. This perspective put them in a unique position to be able to integrate the supplier’s processes with Deere. Supplier development programmes work and create a competitive advantage for companies that champion such programmes [25].

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