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John Deere Reman Creating Value Through Reverse Logistics Case Solution
The case "JOHN DEERE REMAN: CREATING VALUE THROUGH REVERSE LOGISTICS" highlights the multifaceted challenges that the company is facing and the opportunities it has to overcome those and maintain significant growth. The company uses reverse logistics as a tool to remanufacture components and parts for the customers. Reverse logistics refers to the usage of materials returned from consumers and managing the process to the manufacturer. They emphasize on remanufacture of components from the core that is returned, to reduce wastage and follow the reuse, recycle approach. Chris Garrison, who is factory manager at John Deere Reman in Edmonton, Alberta, was preparing for his meeting with Jena Steele, general manager of Global Reman Operations and Marketing. Chris identifies some of the challenges such as maintaining the supply of core to meet the demand and working on effective approaches to manage core return rates, which had declined. In the meeting, Chris must provide suggestions and discuss opportunities that would be beneficial for the company in the long run. The focus is on the improvement of the company's value proposition, enhancing customer satisfaction, and complying with environmental sustainability.
Following questions are answered in this case study solution
Where are the opportunities at John Deere Reman to improve its business model and value proposition? What changes would be required for the integration between John Deere Reman and the corporate function of engineering, operations, and supply chain management?
As Chris Garrison, what recommendations would you make to Jena Steele at your meeting and why?
What is the value proposition of John Deere Reman?
What are the constraints that John Deere Reman faces in improving its performance?
What are the difficulties in acquiring cores? How can John Deere Reman increase the core return rate?
What are the alternatives to core acquisition? Is this a closed-loop or open-loop supply chain?
Case Analysis for John Deere Reman Creating Value Through Reverse Logistics
1. Where are the opportunities at John Deere Reman to improve its business model and value proposition? What changes would be required for the integration between John Deere Reman and the corporate function of engineering, operations, and supply chain management?
John Deere Reman has significant opportunities in its business model by improving its core management, which implies the availability of supply of cores to ensure the demand of customers is met. The value proposition of businesses lies in the fact that their supply and demand have remained stable since they have had steady growth. Furthermore, there is also an opportunity for Reman to tie up with manufacturer companies and make a deal of authorization to remanufacture parts that are IP protected. This would enable the company to produce all the other parts for which customers do not rely on other manufacturers, thereby increasing customer base. In addition to that, the company should consider manufacturing new parts or elements that are mainly taken for remanufacturing, which could be a way of diversification. This could allow Reman to provide new parts if the parts are destroyed and cannot be remanufactured.
The integration of different functions of engineering, operations, and supply chain management is vital across the business enterprise. Primarily, a supply chain requires to be more efficient in automating the whole process of providing cores and making sure there is no delay in the process. Similarly, the operations team needs to be proactive in their approach to devising different strategies to come up with a decision regarding the feasibility of core with consumer demand. They need to connect with other departments in making sure the smoothness of overall processes. Lastly, the engineering team in the R&D department, must work on checking the potential of manufacturing the patented parts besides remanufacturing to stay in the competition and attract more consumers. Therefore, Reman, as a company, has to establish a strong communication channel across different functions and make sound decisions based on data.
2. As Chris Garrison, what recommendations would you make to Jena Steele at your meeting and why?
Since the company is facing some of the challenges, it has to look for the options to regain momentum. As Chris Garrison, I would look for ways by which the company could utilize the opportunities since the company has to rely on global suppliers for the designs and manufacture of new components that own the IP. It puts a huge barrier, and Reman outsources those projects. In this case, it is advisable to establish a business unit separately to manufacture new parts as well. Customers who are not looking to replace failed parts may opt for that option. As a result, the company would enjoy more revenue in the form of more customers and more sales in new parts. Secondly, the company must engage in bilateral contracts with suppliers and buy the rights for IP on the products, which is currently their ownership. Consequently, customers would be catered for the requests they make for new parts without being sent to the suppliers. Additionally, the company is facing difficulties in anticipating the timing and volume of core availability. The core returns from customers further make it difficult to forecast. Hence, the company has to strengthen the supply of core and return processes, which would help in managing and increasing core utilization. The focus must be on keeping supply stable to cater to the customer’s demand.
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