New Holland

New Holland is a global corporation that produces a complete range of light industrial equipment including skid-steer loaders, medium/high horsepower backhoe loaders, landscape loaders and utility tractors and is a major contributor with Fiat-Hatachi in producing heavy duty construction equipment. The focus of this study is the skid-steer operations and lead factory located in Belleville, PA, where the corporation's worldwide supply of skid-steer loaders are manufactured. The study also included design engineering, marketing, procurement, and finance which are all located at Corporate Headquarters130 miles from the plant.

The team observed that the manufacturing plant is currently in transition from a mass production strategy to one of mass customization. The support this new strategy, they recommended that the business: 1) include materials in their cost reduction objective, 2) implement activity based costing, 3) explore ways to compress current three-year design cycle to two years or less, 4) relocate the design engineering function to Belleville, 5) develop strategic partnerships with core suppliers, 6) emphasize global rather than domestic sourcing, 7) outsource all non-core competency parts and subassemblies, 8) procure high level assemblies versus components, and 9) relocate "A" item parts procurement to Belleville.

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