Building efficient product portfolios at John Deere and Company

Tallys Yunes, Dominic Napolitano, Alan Scheller-Wolf, Sridhar Tayur

Research output: Contribution to journalArticle

23 Citations (Scopus)

Abstract

John Deere & Company (Deere), one of the world's leading producers of machinery, manufactures products composed of various features, within which a customer may select one of a number of possible options. On any given Deere product line, there may be tens of thousands of combinations of options (configurations) that are feasible. Maintaining such a large number of configurations inflates overhead costs; consequently, Deere wishes to reduce the number of configurations from their product lines without upsetting customers or sacrificing profits. In this paper, we provide a detailed explanation of the marketing and operational methodology used, and tools built, to evaluate the potential for streamlining two product lines at Deere. We illustrate our work with computational results from Deere, highlighting important customer behavior characteristics that impact product line diversity. For the two very different studied product lines, a potential increase in profit from 8% to 18% has been identified, possible through reducing the number of configurations by 20% to 50% from present levels, while maintaining the current high customer service levels. Based on our analysis and the insights it generated, Deere recently implemented a new product line strategy. We briefly detail this strategy, which has thus far increased profits by tens of millions of dollars.

Original languageEnglish (US)
Pages (from-to)615-629
Number of pages15
JournalOperations Research
Volume55
Issue number4
DOIs
StatePublished - Jul 1 2007

Fingerprint

Profitability
Industry
Machinery
Marketing
Product portfolio
Product line
Costs
Profit

Keywords

  • Industries: machinery
  • Marketing: retail/product line optimization
  • Production: applications

ASJC Scopus subject areas

  • Computer Science Applications
  • Management Science and Operations Research

Cite this

Building efficient product portfolios at John Deere and Company. / Yunes, Tallys; Napolitano, Dominic; Scheller-Wolf, Alan; Tayur, Sridhar.

In: Operations Research, Vol. 55, No. 4, 01.07.2007, p. 615-629.

Research output: Contribution to journalArticle

Yunes, T, Napolitano, D, Scheller-Wolf, A & Tayur, S 2007, 'Building efficient product portfolios at John Deere and Company', Operations Research, vol. 55, no. 4, pp. 615-629. https://doi.org/10.1287/opre.1070.0405
Yunes, Tallys ; Napolitano, Dominic ; Scheller-Wolf, Alan ; Tayur, Sridhar. / Building efficient product portfolios at John Deere and Company. In: Operations Research. 2007 ; Vol. 55, No. 4. pp. 615-629.
@article{122f9264e7f1448ba04a8741b3f78f85,
title = "Building efficient product portfolios at John Deere and Company",
abstract = "John Deere & Company (Deere), one of the world's leading producers of machinery, manufactures products composed of various features, within which a customer may select one of a number of possible options. On any given Deere product line, there may be tens of thousands of combinations of options (configurations) that are feasible. Maintaining such a large number of configurations inflates overhead costs; consequently, Deere wishes to reduce the number of configurations from their product lines without upsetting customers or sacrificing profits. In this paper, we provide a detailed explanation of the marketing and operational methodology used, and tools built, to evaluate the potential for streamlining two product lines at Deere. We illustrate our work with computational results from Deere, highlighting important customer behavior characteristics that impact product line diversity. For the two very different studied product lines, a potential increase in profit from 8{\%} to 18{\%} has been identified, possible through reducing the number of configurations by 20{\%} to 50{\%} from present levels, while maintaining the current high customer service levels. Based on our analysis and the insights it generated, Deere recently implemented a new product line strategy. We briefly detail this strategy, which has thus far increased profits by tens of millions of dollars.",
keywords = "Industries: machinery, Marketing: retail/product line optimization, Production: applications",
author = "Tallys Yunes and Dominic Napolitano and Alan Scheller-Wolf and Sridhar Tayur",
year = "2007",
month = "7",
day = "1",
doi = "10.1287/opre.1070.0405",
language = "English (US)",
volume = "55",
pages = "615--629",
journal = "Operations Research",
issn = "0030-364X",
publisher = "INFORMS Inst.for Operations Res.and the Management Sciences",
number = "4",

}

TY - JOUR

T1 - Building efficient product portfolios at John Deere and Company

AU - Yunes, Tallys

AU - Napolitano, Dominic

AU - Scheller-Wolf, Alan

AU - Tayur, Sridhar

PY - 2007/7/1

Y1 - 2007/7/1

N2 - John Deere & Company (Deere), one of the world's leading producers of machinery, manufactures products composed of various features, within which a customer may select one of a number of possible options. On any given Deere product line, there may be tens of thousands of combinations of options (configurations) that are feasible. Maintaining such a large number of configurations inflates overhead costs; consequently, Deere wishes to reduce the number of configurations from their product lines without upsetting customers or sacrificing profits. In this paper, we provide a detailed explanation of the marketing and operational methodology used, and tools built, to evaluate the potential for streamlining two product lines at Deere. We illustrate our work with computational results from Deere, highlighting important customer behavior characteristics that impact product line diversity. For the two very different studied product lines, a potential increase in profit from 8% to 18% has been identified, possible through reducing the number of configurations by 20% to 50% from present levels, while maintaining the current high customer service levels. Based on our analysis and the insights it generated, Deere recently implemented a new product line strategy. We briefly detail this strategy, which has thus far increased profits by tens of millions of dollars.

AB - John Deere & Company (Deere), one of the world's leading producers of machinery, manufactures products composed of various features, within which a customer may select one of a number of possible options. On any given Deere product line, there may be tens of thousands of combinations of options (configurations) that are feasible. Maintaining such a large number of configurations inflates overhead costs; consequently, Deere wishes to reduce the number of configurations from their product lines without upsetting customers or sacrificing profits. In this paper, we provide a detailed explanation of the marketing and operational methodology used, and tools built, to evaluate the potential for streamlining two product lines at Deere. We illustrate our work with computational results from Deere, highlighting important customer behavior characteristics that impact product line diversity. For the two very different studied product lines, a potential increase in profit from 8% to 18% has been identified, possible through reducing the number of configurations by 20% to 50% from present levels, while maintaining the current high customer service levels. Based on our analysis and the insights it generated, Deere recently implemented a new product line strategy. We briefly detail this strategy, which has thus far increased profits by tens of millions of dollars.

KW - Industries: machinery

KW - Marketing: retail/product line optimization

KW - Production: applications

UR - http://www.scopus.com/inward/record.url?scp=38549160696&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=38549160696&partnerID=8YFLogxK

U2 - 10.1287/opre.1070.0405

DO - 10.1287/opre.1070.0405

M3 - Article

AN - SCOPUS:38549160696

VL - 55

SP - 615

EP - 629

JO - Operations Research

JF - Operations Research

SN - 0030-364X

IS - 4

ER -