Unit 7 MT460 Case Study 26 Latisia fairley

Unit 7 MT460 Case Study 26 Latisia fairley - Unit 7 Case...

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Unit 7 Case Study 26 MT460 Management and Policies Latisia Fairley October 11, 2011 Case Introduction This is a in-depth case analysis of the Scott’s Miracle-Gro Company (Scotts) alternative decisions regarding what to do with the Scotts’ plant based in Temecula, California. The Scotts Company was founded by Orlando McLean Scott in 1868, and was located in Marysville; Ohio. Scotts started its spreaders in 1930. In 1995 Scott Miracle-Gro was formed after the merger of consumer lawn and garden care products (Gray &Leiblein). Unlike Scotts’, Miracle-Gro has no internal production; all production was outsourced. In 1992, after Scotts acquired Republic Tools & Manufacturing Company, a three building spreader manufacturing plant in Carlsbad, California was provided by the McRoskey family. In 2001, to cut the cost of maintaining three independent buildings, Scotts’ senior management decided that a move to the current facilities in Temecula would be most efficient. Since 2001, Scotts’ manufacturing facilities (which focus on spreader production) have been located in a 412,000 square foot facility in Temecula, California. Under the direction of Bob Bawcombe, plant director of operations, the Temecula plant(which employs 190 workers and 16 salaried employees) has achieved productivity improvements(averaging 6% per year) and also made important innovations, including a new hand spreader assembly line. Moreover, the Temecula plant pioneered the use of ‘in-mold labeling’ for injection molding on its spreader product. At the same time Bawcombe, director of operations , realized how critical domestic production at Temecula was to process innovation and product quality, management at headquarters were questioning the festivity of outsourcing or offshoring production to China. Statement of Problem At first glance, closing down the Temecula plant and outsourcing or offshoring Scotts’ spreader production seems to present opportunities for significant cost savings. However, it may be that shutting down the Temecula plant’s apparent negative benefits of high shipping costs and other cost disadvantages associated with outsourcing or offshoring may out way the possible advantages of moving to a low-cost production in China. Here in lies the dilemma for this case analysis; where to locate Scotts’ manufacturing operations for its fertilizer spreaders in order to best serve Scotts’ interests and the interests of its key stakeholders.
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This note was uploaded on 01/05/2012 for the course BU 144 taught by Professor Cruger during the Spring '11 term at Kaplan University.

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Unit 7 MT460 Case Study 26 Latisia fairley - Unit 7 Case...

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