1. Highlights the key features of outsourcing arrangements between Deer & company and Fedex logistics. How would you assess Deere effort in managing suppliers relationships with Fedex?

2.explain advantages of centralized and decentralized approaches of designing worldwide logistics newtwrok structure. What would you recommend David in regard to two approaches?

   

FEDEX LOGISTICS FedEx Logistics provided services to 11 Deere facilities in North America, representing costs of approximately $10 million annually. A transportation management services contract between Deere and FedEx had been negotiated seven years prior. However, since each of the units preferred to negotiate their individual service agreements with FedEx separately, both the types of services provided and the costs tended to differ across units. The FedEx logistics services contracts were all based on a cost-plus model, which ranged from 15 per cent to 20 per cent. THE LOGISTICS SERVICES PROJECT Kevin MacAuley started at Deere in June as a summer intern student, working in the corporate office in Moline, Illinois. He was planning to return to school in September to complete the second year of the MBA program. Assigned to the worldwide logistics organization, Kevin had been asked by David Panjwani to evaluate Deere's corporate logistics outsourcing arrangement with FedEx. David also asked Kevin to identify opportunities and to make recommendations regarding changes to Deere's outsourced logistics service arrangement with FedEx. Feeling that he would not be able to gather all the necessary information from his office in Moline, Kevin decided to visit the 11 facilities personally and meet with the Deere and FedEx staff. He spent one month touring the 11 Deere units, and also visited related FedEx facilities. Kevin found that FedEx provided three logistics services for Deere: centralized transportation management, on-site transportation management and warehousing. A. Centralized transportation management involved co-ordinating inbound less-than- truckload (LTL) and truckload (TL) shipping routes and consolidations, carrier selection, and handling freight bill audits and payments. Each unit used the FedEx centralized transportation management services.