...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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...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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...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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...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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...Scotts Miracle Gro The Spreader Sourcing Decision 1.What are the strategic risks and benefits of outsourcing production of the Temecula plant to a contract manufacturer(s) in China? RISKS • Perceived decrease in quality from abandoning in-mold labeling • Additional costs and problems in implementing in-mold labeling in China • Up-front investment in specialized equipment and training for the partner • Inflexibility of sourcing suppliers would result • Labor and electricity costs guaranteed to increase at uncertain rates • Undervalued Yuan; drastic shift in exchange rates would reduce outsourcing cost advantages • Net increase in transportation costs of $7 M per year • Finished goods pipeline time would force increase of safety stock by $460K BENEFITS Immediate savings in • Labor Costs • Electricity costs • Plant and Property costs 2.Financially compare two of the options (stay in Temecula, outsource to China). Include all possible relevant financial measures and explicitly state important factors not included in the financial analysis. Provide a brief assessment of the offshoring option. Temecula Costs Lease Electricity Annual Usage Hourly raye rate+surcharge Electricity Costs Labor Costs Hourly Wage Hours Days Hourly Labor Salaried Workers Average Salary Salary Expense Total Current Labor Direct Manufacturing Costs Overhead Direct Investment Discount Total Cost 2008 $3,000,000 2009 $3,000,000 2010 $3,000,000 2011 $3,000,000 2012 $3,000,000 2013 $3,000,000 2014 $3,000...
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...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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...1800 Flowers.com http://www.bloomberg.com/research/stocks/people/person.asp?personId=234954&ticker=FLWS Mr. James F. McCann, also known as Jim, founded 1-800-Flowers.com Inc., in 1976 and has been its Chairman and Chief Executive Officer since 1987. Mr. McCann focuses on customer relationships. He serves as an Advisor at Metamorphic Ventures. He has been the Chairman of Willis Group Holdings Public Limited Company since July 8, 2013 and its Director since April 21, 2004. He has been a Director of Willis Group Limited since April 21, 2004. He serves as a Director of Boyds Collection Ltd. since May 2001. He has been an Independent Director of The Scotts Miracle-Gro Company since January 2014. He serves as a Director of PETCO Animal Supplies, Inc. and Children's Progress, Inc. Mr. McCann serves as a Director of National Retail Federation, GTECH Corporation, Boyd's Bears, Very Special Arts, Gateway 2000, Hoftstra University, and Winthrop-University Hospital, Inc. He served as a Presiding Independent Director of Willis Group Holdings Public Limited Company from November 1, 2012 to July 8, 2013. He served as a Director of Gateway Inc., since 1996; OfficeMax,Inc., and GTECH S.p.A. He served as a Director of GTECH Holdings Corporation. He served as an Independent Director of Lottomatica Group S.p.A. He supports programs for the developmentally disabled. He was involved in social services at St. John's Home for Boys. He is a published author and award winning public speaker as well...
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...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...
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...A Strategic Analysis TABLE OF CONTENTS INTRODUCTION 1 WORLD MARKET 1 CORPORATE HISTORY 1 GROWTH STRATEGY 2 SPECTRUM AND UNITED INDUSTRIES 2 GROWTH STRATEGY 2 SPECTRUM BRANDS 3 MANAGEMENT 3 STRATEGY 3 RELATED DIVERSIFICATION 3 UNRELATED DIVERSIFICATION 4 MARKETING 5 MANUFACTURING, RAW MATERIALS, DISTRIBUTION, AND SUPPLIERS 10 CONSOLIDATION EFFORTS 10 RAW MATERIALS 11 DISTRIBUTION AND SUPPLIERS 12 SPECTRUM BRANDS FINANCES 12 SALES 12 INCOME 13 PROFITABILITY RATIOS 13 LIQUIDITY RATIOS 14 LEVERAGE RATIOS 15 ACTIVITY RATIO 16 SHARE PRICE 17 RECOMMENDATIONS 18 REFERENCES 19 INTRODUCTION Spectrum Brands (SPC) is a global branded consumer products company with seven major product lines including Rayovac consumer batteries, Tetra pet supplies, Remington electric shaving, grooming and personal care products, VARTA portable lighting, Vigoro lawn care, Sta-Green lawn and garden, Repel, Hot Shot, and Spectracide household insect control. After acquiring United Industries from Thomas H. Lee (THL) the Boston based private equity firm in 2005, Rayovac (ROV) changed its name to Spectrum Brands and started trading on the New York Stock Exchange (NYSE) as “SPC”. World Market The worldwide market sector in which Spectrum competes is estimated to be US$300 billion1. The worldwide market for batteries alone is estimated at US$50 Billion2. Worldwide dog and cat food sales stood at...
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...You Call That Innovation? Companies Love to Say They Innovate, but the Term Has Begun to Lose Meaning Email Print 64 Comments Facebook Twitter LinkedIn * smaller * Larger By LESLIE KWOH Updated May 23, 2012 2:42 p.m. ET Got innovation? Just about every company says it does. Companies throw the term "innovation" around but that doesn't mean they are actually changing anything monumental. Leslie Kwoh reports on digits. Businesses throw around the term to show they're on the cutting edge of everything from technology and medicine to snacks and cosmetics. Companies are touting chief innovation officers, innovation teams, innovation strategies and even innovation days. But that doesn't mean the companies are actually doing any innovating. Instead they are using the word to convey monumental change when the progress they're describing is quite ordinary. Enlarge Image Like the once ubiquitous buzzwords "synergy" and "optimization," innovation is in danger of becoming a cliché—if it isn't one already. "Most companies say they're innovative in the hope they can somehow con investors into thinking there is growth when there isn't," says Clayton Christensen, a professor at Harvard Business School and the author of the 1997 book, "The Innovator's Dilemma." Read More * B-Schools Join Rush to Capitalize on 'Innovation' * The Buzzwords We Can't Help Using * Now Enrolling: Innovation 101 A search of annual and quarterly...
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...Health and wellness in the workplace Octavio Ponce COMM/112 September 18, 2012 Karen Hamilton Health and wellness in the workplace Health and wellness programs in the workplace can greatly benefit the company and their employee’s at personal and business levels. It is no surprise that a manufacturing company cannot run an efficient business without their employees being present at the job site. However, with health cost steadily keeps rising and costing the company lots of money, they cannot afford to lose employees for health reasons. Today, employers are suffering more than ever of losing money, not just because of the economy but also of their employees. Employees are being absent from work due to their poor health and lifestyles. Employers are implementing wellness programs to help employees get familiar with other options in changing their lifestyle. The question the employers should be asking is; are we doing enough to ensure the health of their workforce? The majority would simply say; they don’t know. Today, more employers are implementing wellness programs to assist their employees, who aim to better the current health status of the employee and also reducing costs to the company. Encouraging employees is a top priority to start a wellness program on the right track, it is not easy to change employee lifestyle like increasing physical activity, eating habits, reducing stress, and ceasing tobacco use (Lastowka, 2011). The link between the health of the employee...
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...58mill EBITDA Multiple =3.73x (close to 3.5x) The reason why I do not feel is justified is based off of the projections, the implied enterprise value is $1.563mill. So the revised calculation would be: ($1.563mill - $172mill)/$200.58mill =6.93x The company has the ability to generate more returns on the investment than the current EBITDA multiple indicates. EBITDA Multiple for some of the industry competitors are calculated as follows based on given data: Comparable Firms (End of 2011, Millions Except Share Price) Shares Share Price Outstanding American Greetings Blyth Central Garden & Pet Consolidated Graphics CSS Industries Deluxe Fossil Lancaster Colony McCormick & Company McGraw-Hill Meredith RR Donnelley & Sons Scholastic Scotts Miracle-Gro Tupperware Brands 12.51 56.80 8.16 48.28 19.92 22.76 79.36 69.34 50.42 44.97 32.65 14.43 29.97 46.69 55.97 38.32 8.22 48.04 10.24 9.73 50.93 61.79 27.26 133.05 278.00 44.79...
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...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 employees and their rights at home. It should not matter if you work for a certain company, employees have rights. If an organization keeps over stepping their employee’s right they eventually going to run into lawsuit which will cost the organization money and people will not want to work at that company. Controversial position Argument A “private business, large or small...
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