Read the case study “Deere Cost Management”

Start with the explanation of the analysis of two conditions.

• What happens to procurement and its relationship with the supply base when the need for budgeted cost management interferes with communication, relationships, and other outside market pressures?

• How does market competition influence your ability to sell for a price that allows you to cover costs and still make margin?

Then, address these questions:

• Are we facing a situation where other competition can out-compete you? If yes, then what is to be done about it? How do you manage the supply base whose members do not understand the symbiotic relationships that they possess when we need them to feel our competitive pressures?

• What type of correction and outcome are you expecting while using the cost management process?