...Laura Mosier SCM-Professor York Case study #1 “Scott’s Miracle-Gro” Scotts Miracle-Gro, the largest company in the North American lawn and garden industry, has reached a point in its existence to make a significant management decision. The company is considering whether to continue with insourcing its spreader products or switch to outsourcing in China. The solution lies in an analysis of quantitative and qualitative data comparisons and deciding which ideology would benefit the company in the long haul. When considering the costs it seems as though outsourcing would save a lot of money for the firm, however, we must think strategically. Thinking strategically means the long run, and using the statistics we were given we can estimate that the costs of outsourcing are growing quicker exponentially. Yes, the labor in China is cheaper but over a span of ten years wages are estimated to increase by 40 percent in China whereas in Temecula there is an estimated 3 percent annual increase, or approximately 30 percent over the next decade. The additional $8,000,000 freight charge when choosing to outsource would be the biggest expense. Over a span of ten years this is estimated to increase by 30%, almost 10.5 million dollars by 2017. The only area we would be saving on is the electricity costs (other than the obvious difference in the annual lease costs), but compared to the freight charges it is very little. The electricity costs in Temecula are due to increase only 25% (compared...
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...The Scotts Miracle-Gro Company (Scott) was the world’s leading dealer and marketer of consumer products for do-it-yourself lawn and garden care in addition to products for specializing in horticulture. Scotts started it spreader business according to “(Pearce & Robinson, 2011), with the introduction of drop spreaders and expand business in later years to develop broadcast spreaders. Scott’s Vision for the company future involved making the plant automated as possible and were headed in that direction.” Scott’s was trained and developed there human resources to meet the need for the future direction of the company. This direction would consist of fewer assemblers and a greater number of machine technicians to maintain plants. By making these changes the company would dramatically cut labor cost and make help balance out the difference and make the cost comparable to the cost of plants in China. I think the key issue with Scott’s growth and development wanted to maintain quality but, also it was important for the company to innovative and cost effective. A good example of this sort of process innovation according to “(Pearce & Robinson, 2011), was the development of a new hand spreader assembly process. Scott’s redesigned the spreader and removed screws connectors this allowed for a pressure fit. In addition to allowing the company to build an in house an automated assembly line which help to cut cost because less staff was needed. This process only required four people but...
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...RUNNING HEAD: Scotts Miracle-Gro : The Spreader Sourcing Decision Unit 7 Scotts Miracle-Gro : The Spreader Sourcing Decision Kaplan University School of Business and Management MT460 Management Policy and Strategy David H Brose Professor: Zurick October 11, 2011 Introduction Scotts merged with Miracle Gro in 1995 to form the largest lawn and garden supplier to the do it yourselfer. The company started as a seed supplier in 1868, claiming to distribute a weed free seed. Scotts marketed fertilizer in the late 1920s. In 1930, they developed their drop spreader business and their broadcast spreader business in 1983. Synopsis of the Situation Scotts had developed an injection molding process that is more appropriate for their industry. The old process of “hot stamping” labels left a manufacturer expiration on Scotts product. The new “label stamping” process made for a more unique and efficient manufacturing process. Key Issues The manufacturing process required fewer employees to produce. The location of the manufacturing facility requires high paid production labor, leased facilities, and limited manufacturing capabilities. Define the Problem Scott manufactures their label stamped spreader in a state with expensive cost of living and more expensive realty. The cost of moving the manufacturing facility is unthinkable with the specialty equipment and training required for the product. ...
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...Scotts Miracle-Gro : The Spreader Sourcing Decision John Gray Michael Leiblein 1 As Bob Bawcombe drove to work on a warm California morning in June 2007, his mind was occupied with an upcoming meeting with the folks from the corporate office in Marysville, Ohio. Bawcombe was the director of operations of Scotts’ Temecula plant. For over five years, he had been in charge of the Temecula manufacturing plant, which produced all of Scotts Miracle-Gro’s domestic lawn seed and fertilizer spreaders (see Exhibit 1). As a result of the plant’s location in Southern California, Bawcombe was under constant pressure to justify why Scotts should not offshore/outsource production of its spreaders to a low-wage manufacturing site, such as China. COMPANY HISTORY 2 The Scotts Miracle-Gro Company (Scotts), based in Marysville, Ohio, was formed by a 1995 merger of Miracle-Gro and The Scotts Company. The merger made Scotts the largest company in the North American lawn and garden industry. It was the world’s leading supplier and marketer of consumer products for do-it-yourself lawn and garden care, with products for professional horticulture as well. 1 In the 2007 fiscal year, Scotts had net sales of $2.7 billion (see Exhibits 2 and 3). 3 The Scotts Company was founded in 1868 by Orlando McLean Scott as a purveyor of weed-free seeds. By 1879, Scotts had diversified into distribution of horse-drawn farm equipment and also started a mail-order farm seed distribution channel. Scotts...
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...1. Major issues （□drawbacks √advantages） Issues with Temecula Operations * High costs ( labor cost, overhead cost, raw material cost, energy cost) but were being improved * Redundant and labor-intensive process, low efficiency lay-out, but were being improved * In-mold labeling -- high quality (Hot stamping -- low quality) Issues with outsourcing to China * Scotts has to either provide the know-how of “in-mold labeling” or drop this feature. * Labor cost was low (√) but was expected to increase at 40% in the next decade. * Electricity cost was low (√) but was expected to increase at 20% in next decade. * Freight cost was USD 8 million and was increasing at 3% per year. * It had to keep safety stock of 8 weeks inventory ($460,000) to balance the increased lead time. * Contract manufacturer would take an 8% profit margin above costs. * Scotts also has to pay transaction cost and managing cost. * There would be a time-lag for quality reassurance in US due to the batch nature of suppliers. * Chinese government policy on Yuan remained uncertain. * Provisional agriculture product tariff-free policy existed (√) but later it might change. It seems that risks outweigh benefits. Analysis is provided below. This plan is NOT advisable to be taken. 2. Alternative solutions * Setting up a new plant in China ( mentioned in the article ) * Initial cost would be USD 8 Million and taking one year. * Benefits...
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...job however, she thinks that the company has a stereotype perception towards her marital status whereby married woman cannot give the commitment to do their work in the organization. Therefore, this women should used behavioral decision making model to make a decision because she did not has complete information about the organization culture and whereby she need use her intuitive judgment as the situation she had face is not the routine decision. Case Study 2: Wellness or Invasive Coercion? In this case, the CEO Jim Hagedorn used classical decision model where he acting rationally to have a wellness program and anti-smoking campaign to improve health of employees and reduce health care cost for the firm. This case happens in Scotts Miracle-Gro Company, Marysville, Ohio that involved the Scotts human resources policies. There are complaints from employee where the policy is intrusive. The corporate executives are concerned about rising health-care cost to employee who fail to take extensive health risk assessments. CEO Jim Hagedom used classical decision model because of, he have complete information regarding dangerous of smoking that may lead to health problem of their employee. Therefore, he will not hire a smoker after failing a drug test for nicotine. Case Study 3: Super Sales Women Won’t Ask for Raise For this case, we decided to use behavioral decision maker the problem is not clearly defined which referring to the her sister of that sales woman...
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...Scotts Miracle-Gro | September 7 BUAD 6600 | SCMers Meagan Frances AyersJames FranksEmelie HallJean-Hubert Trahan | Instructor: Sachin Modi | Objective/Scope The purpose of this article is to determine whether staying at the Temecula plant or outsourcing to China is the best option for Scotts Miracle-Gro. A cost analysis will be used to determine which option will give Scotts Miracle-Gro the best opportunity for long-term growth and profit. Recommendations It has been determined that staying in the United States at the Temecula plant in California will be the best decision for Scotts Miracle-Gro financially and with regards to their image and product quality. However, in order to remain competitive, costs must be lowered to keep profits up to par with where they would be had the company decided to outsource. To do this, it has been recommended that Scotts Miracle-Gro cut production costs by reducing: 1. Energy Costs, 2. Raw Materials Costs, and 3. Labor Costs. By reducing costs, Scott’s Miracle-Gro can remain competitive while in the United States and avoid outsourcing the production line to China. Analysis Risk and Benefits Upon reviewing the information regarding the production line of The Spreader, it has been concluded that there are many risks with outsourcing the production line overseas to China which include but are not limited to: 1. Loss of quality 2. Loss of production innovation 3. Forgoing in-mold label capabilities...
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...Debate Paper MBA 5600 Human Resource Management Debate Paper Introductory Statement & Overview of position Controversial Position The controversial position of Scott’s organization, can tell employees what to do on the companies times and property and an employee’s own time. Traditional Position Companies have the right to tell employees what to do on company’s time and property, but at home employees can do what they want. As Jim Lowe “started each day with two doughnuts. Lunch was pair of Whoppers and fries. Nighttime involved a bag of chips, a couch, and a clicker”(Conlin, 2007). My Position My overview position is traditional position I believe that Organizational or Companies have the right tell employees what do on company’s time but at employees can do what they wish at the privacy of their own home. Argument # 1 Controversial Argument Corporations find new ways to save money, as Scotts Miracle-Gro Co. and other organization are banning employees from smoking, regardless of whether it is done on company or personal time. Scotts believes if you work of us you are band from certain things. Traditional Position Rebuttal Some times in a job you must bring your work home; organizations are saying you must bring their rules and regulation home. Many organizations such as Scotts is trying to control people personal life outside of work. Such organization that help employees outside of work as NWI(National Work Rights Institute), is protecting...
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...Debate Paper MBA 5600 Human Resource Management Debate Paper Introductory Statement & Overview of position Controversial Position The controversial position of Scott’s organization, can tell employees what to do on the companies times and property and an employee’s own time. Traditional Position Companies have the right to tell employees what to do on company’s time and property, but at home employees can do what they want. As Jim Lowe “started each day with two doughnuts. Lunch was pair of Whoppers and fries. Nighttime involved a bag of chips, a couch, and a clicker”(Conlin, 2007). My Position My overview position is traditional position I believe that Organizational or Companies have the right tell employees what do on company’s time but at employees can do what they wish at the privacy of their own home. Argument # 1 Controversial Argument Corporations find new ways to save money, as Scotts Miracle-Gro Co. and other organization are banning employees from smoking, regardless of whether it is done on company or personal time. Scotts believes if you work of us you are band from certain things. Traditional Position Rebuttal Some times in a job you must bring your work home; organizations are saying you must bring their rules and regulation home. Many organizations such as Scotts is trying to control people personal life outside of work. Such organization that help employees outside of work as NWI(National Work Rights Institute), is protecting...
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...MEMORANDUM DATE: November 29, 2010 TO: James Martin, Director of Human Resources FROM: Name, Assistant Director of Human Resources SUBJECT: Wellness Program Recommendations for Technicraft, Inc. Attached is the report on the implementation of corporate wellness programs. Due to rising health benefit costs and a rising number of health benefit claims, you requested that I investigate the implementation of corporate wellness programs as a way to reduce company costs. In order to determine whether it would be possible to improve employee health and lifestyle habits, while also cutting company costs, I analyzed the results that several companies had after launching their own wellness programs. I also considered and researched the potential disadvantages of implementing a wellness program. After a thorough investigation of all of these factors, I recommend that Technicraft, Inc. implement a corporate wellness program in order to improve employee health and productivity and reduce or stabilize company health benefit costs. I have enjoyed researching this topic and would like to meet with you to discuss my recommendation. I will call you early next week in order to schedule a meeting time or you may contact me at extension 5555. WELLNESS PROGRAM RECCOMMENDATIONS FOR TECHNICRAFT, INC. Prepared for James Martin, Director of Human Resources Technicraft, Inc. 4501 West 92nd Street Indianapolis, IN 46260 Prepared by Name, Assistant Director of Human...
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