Heartland & Company
Heartland & Company
Introduction:
On April 19, 2008, Walter A. Walsh, Supply Management Manager for Heartland & Company, met with one of his buyers, Olivia Newcomb, in his office. They discussed her Heartland & Company cost reduction goals for bearing #B02326620. After the meeting Mr. Walsh began wondering if changes should be made to the way suppliers were being evaluated and how business should be allocated among suppliers performing at different levels. These were issues needing further consideration. Founded in 1875, Heartland & Company is one of the U.S.’s oldest industrial organizations. It manufactures agricultural and construction equipment as well as commercial and consumer lawn care equipment. Today, Heartland & Company does business in over 100 countries and had sales in excess of U.S. $12 billion in 2007.
Bearings:
Bearings are devices that allow constrained relative rotation or linear movement between two parts. Bearings are commonly found in furniture drawers, all types of engines and at the intersection of moving mechanical parts. A common type of bearing is the ball bearing (see picture above). Heartland & Company spent approximately U.S. $90 million on bearings last year.
Part #B02326620:
One of Heartland’s bearings, part #B02326620, was currently being purchased from two suppliers, New England Works and Midwest Bearings. This bearing was used in a wide range of Heartland products. Annual usage had been steady, averaging 500,000 bearings per year. The price of this bearing was approximately U.S. $1.00.
Supplier Performance:
Heartland & Company evaluated its suppliers on five dimensions. As shown and defined in Table 1, they were quality, delivery, cost management, technical support and wavelength. The overall evaluation of a supplier was determined by its lowest scoring dimension. The evaluation system and the 2007 evaluations of New England Works and Midwest Bearings are summarized in Table 1.
The New England Works Advantage:
Introduction:
On April 19, 2008, Walter A. Walsh, Supply Management Manager for Heartland & Company, met with one of his buyers, Olivia Newcomb, in his office. They discussed her Heartland & Company cost reduction goals for bearing #B02326620. After the meeting Mr. Walsh began wondering if changes should be made to the way suppliers were being evaluated and how business should be allocated among suppliers performing at different levels. These were issues needing further consideration. Founded in 1875, Heartland & Company is one of the U.S.’s oldest industrial organizations. It manufactures agricultural and construction equipment as well as commercial and consumer lawn care equipment. Today, Heartland & Company does business in over 100 countries and had sales in excess of U.S. $12 billion in 2007.
Bearings:
Bearings are devices that allow constrained relative rotation or linear movement between two parts. Bearings are commonly found in furniture drawers, all types of engines and at the intersection of moving mechanical parts. A common type of bearing is the ball bearing (see picture above). Heartland & Company spent approximately U.S. $90 million on bearings last year.
Part #B02326620:
One of Heartland’s bearings, part #B02326620, was currently being purchased from two suppliers, New England Works and Midwest Bearings. This bearing was used in a wide range of Heartland products. Annual usage had been steady, averaging 500,000 bearings per year. The price of this bearing was approximately U.S. $1.00.
Supplier Performance:
Heartland & Company evaluated its suppliers on five dimensions. As shown and defined in Table 1, they were quality, delivery, cost management, technical support and wavelength. The overall evaluation of a supplier was determined by its lowest scoring dimension. The evaluation system and the 2007 evaluations of New England Works and Midwest Bearings are summarized in Table 1.
The New England Works Advantage: