John Deere Components Works.

Summary In its inception, the John Deere Component Works (JDCW) was structured to be a captive producer of parts for the equipment divisions of John Deere. The factories were required to purchase all major parts internally, and the corporate policy favoured internal purchasing from JDCW for smaller component parts also (Kaplan, p. 136). The high volume production of the 1970's supported this company objective, and supplying the parts internally gave John Deere a competitive advantage. Changing …

…able to re-cost its products to ensure that overhead is being allocated in a way that reflects the true costs of their products. This will allow them to price the components more effectively, make better make or buy decisions and compete with outside vendors. Once they are able to compete effectively with outside vendors, they will be in a position to begin the process of increasing production volume by supplying component parts to outside companies.