Spreader Sourcing Decision

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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. Alternative Solutions Moving the manufacturing process to China would be costly to the company because either new molds must be purchased or the existing molds must be transported to the new manufacturing facility. Moving the manufacturing facility will save money on rent, salary, and utilities. Selected Solution to the Problem Moving manufacturing to China would be a way…...

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