Scotts Miracle-Gro Case Solution
Name: Elcra Brown Subject: Supply Chain Management (Intro) Paper Subject: Scotts Miracle-Gro Date: July 23, 2013
Scotts Miracle-Gro is the largest company in the North American lawn and garden industry. It is also the world’s leading supplier and marketers of consumer products for do it yourself lawn and garden care, including products for professional horticulture. This paper is mainly centered on two decisions which include either to make and or buy. In other words whether Scotts Miracle-Gro should keep manufacturing in Temecula located in California, outsource production to a contract company in China or to build a company in China and relocate production there. The paper will be divided into three parts in which all the disadvantages and advantages of each scenario will be briefly discussed. At the end of the paper there will be two tables attached to support my decision of keeping the plant in Temecula, California.
After careful consideration and a much closer look and analysis of the three possible decisions, it is my recommendation that Scotts Miracle-Gro keep production at Temecula California. However, it is imperative that Scotts Miracle-Gro reduce production costs by reducing mainly energy costs and labor costs in order to remain competitive while in the United States and avoid outsourcing to China. However, before we divulge in how we would go about reducing these costs, let’s take a closer look on the other two options and the risks and benefits associated with them.
Outsourcing to China
It is of no surprise that outsourcing to China would have a major impact on labor, production and electricity costs. Given the knowledge, of China being a developing country, with a very cheap labor force and energy source at their disposal, gaining access to such resources could definitely impact costs a lot and could spell profits. Another, advantage of outsourcing to China involves no duties and taxes on importing agricultural
Scotts Miracle-Gro is the largest company in the North American lawn and garden industry. It is also the world’s leading supplier and marketers of consumer products for do it yourself lawn and garden care, including products for professional horticulture. This paper is mainly centered on two decisions which include either to make and or buy. In other words whether Scotts Miracle-Gro should keep manufacturing in Temecula located in California, outsource production to a contract company in China or to build a company in China and relocate production there. The paper will be divided into three parts in which all the disadvantages and advantages of each scenario will be briefly discussed. At the end of the paper there will be two tables attached to support my decision of keeping the plant in Temecula, California.
After careful consideration and a much closer look and analysis of the three possible decisions, it is my recommendation that Scotts Miracle-Gro keep production at Temecula California. However, it is imperative that Scotts Miracle-Gro reduce production costs by reducing mainly energy costs and labor costs in order to remain competitive while in the United States and avoid outsourcing to China. However, before we divulge in how we would go about reducing these costs, let’s take a closer look on the other two options and the risks and benefits associated with them.
Outsourcing to China
It is of no surprise that outsourcing to China would have a major impact on labor, production and electricity costs. Given the knowledge, of China being a developing country, with a very cheap labor force and energy source at their disposal, gaining access to such resources could definitely impact costs a lot and could spell profits. Another, advantage of outsourcing to China involves no duties and taxes on importing agricultural
Citations: “Scotts Miracle-Gro: The Spreader Sourcing Decision,” Harvard Business Review, Case Study. “Climate in Temecula, California,” http://www.bestplaces.net/climate/city/ca/temecula. “Sunshine State,” http://en.wikipedia.org/wiki/Sunshine_State.