Case Study Scotts Miracle-Gro
Case Name Scotts Miracle-Gro
The Scotts Company has been around since 1868. Ever since, they have been supplying many families with weed-free seeds. Throughout the years, Scotts has distributed many supplies such as fertilizers, seeds, soil, spreaders, and more. They were the first to introduce Turf Builder and they began spreader business with drop spreaders (Scotts Miracle-Gro). The company started expanding with mail order distribution channel, then to retail channel distribution. Miracle-Gro was founded in 1951, where all productions were outsourced with no internal production. When both companies united in 1995, Scotts Miracle-Gro became the number one company. It is one of the largest lawn and garden industry in North America. Also, making them the leading supplier and marketer of consumer products for do it yourself lawn and garden care (Scotts Miracle-Gro).
In 2001, Scotts Company moved to a 412,000 square foot facility in Temecula, California. Having three different buildings in Carlsbad, California from Republic Tool & Manufacturing Company for spreader, production was becoming inefficient and costly which created concerns for the company. The only efficient solution was to relocate. This was to create improvement and to reduce cost for the company. Regardless of the move, to keep the company open in California was costing them with high plant and labor costs. A fifteen year lease was signed in 2001 on the current Temecula facility. Even though the lease is a 15-year contract, the Scotts Company believes that they could terminate it earlier. However, the $3 million annual fee for the facility and other factory costs are creating a large amount of cost pressure. Bob Bawcombe, the director of operations at the Temecula plant, has been under a lot of pressure to contain and lower high plant and labor costs. While he has been achieving a significant productivity improvement, he has been trying his best to fight off the corporate plans to outsource the
The Scotts Company has been around since 1868. Ever since, they have been supplying many families with weed-free seeds. Throughout the years, Scotts has distributed many supplies such as fertilizers, seeds, soil, spreaders, and more. They were the first to introduce Turf Builder and they began spreader business with drop spreaders (Scotts Miracle-Gro). The company started expanding with mail order distribution channel, then to retail channel distribution. Miracle-Gro was founded in 1951, where all productions were outsourced with no internal production. When both companies united in 1995, Scotts Miracle-Gro became the number one company. It is one of the largest lawn and garden industry in North America. Also, making them the leading supplier and marketer of consumer products for do it yourself lawn and garden care (Scotts Miracle-Gro).
In 2001, Scotts Company moved to a 412,000 square foot facility in Temecula, California. Having three different buildings in Carlsbad, California from Republic Tool & Manufacturing Company for spreader, production was becoming inefficient and costly which created concerns for the company. The only efficient solution was to relocate. This was to create improvement and to reduce cost for the company. Regardless of the move, to keep the company open in California was costing them with high plant and labor costs. A fifteen year lease was signed in 2001 on the current Temecula facility. Even though the lease is a 15-year contract, the Scotts Company believes that they could terminate it earlier. However, the $3 million annual fee for the facility and other factory costs are creating a large amount of cost pressure. Bob Bawcombe, the director of operations at the Temecula plant, has been under a lot of pressure to contain and lower high plant and labor costs. While he has been achieving a significant productivity improvement, he has been trying his best to fight off the corporate plans to outsource the
Cited: Scotts Miracle-Gro:The Spreader Sourcing Decision. (2008). Retrieved October 24, 2012, from cb.hbsp.harvard.edu/cb/web/he/product_view.seam?R=908M78-PDF-ENG&T=EDC&C=PURCHASED_MATERIALS&CD=16096679&CS=f293f183b5968d1954553801cb51f507 Leong, W. T. (2012). Principles of Supply Chain Management . Mason OH Page 54, 112-113.