This website uses cookies to ensure you have the best experience. Learn more

Scotts Miracle Essay

1886 words - 8 pages

Gro | |

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. ...view middle of the document...

Cost Analysis
An analysis of the costs between manufacturing in Temecula, CA and in China show that Scotts Miracle-Gro can save between $4.6 million and $4.8 million per year by using a contract manufacturer. See Exhibit 1 Cost Analysis. However, the Temecula plant is currently innovating more efficient strategies for obtaining energy and increasing manufacturing productivity. These ongoing improvements will reduce labor and overhead costs per unit while maintaining control of quality and processes in Temecula.
As of 2007, a goal was set in place to automate the Temecula, CA plant as much as possible. This kind of plant improvement would increase production and quality control far above that of a contract manufacturer who has little incentive to invest in such technologies. Increased quality control and productivity leads to lower costs and tighter cash flows.
Maintaining manufacturing in-house also retains the relationship that Scotts Miracle-Gro has between its manufacturing and R&D departments. This relationship allows the company to have collaboration between the two areas of expertise which leads to more cost effective methods of designing products for manufacture.
The savings on Chinese labor and electricity are great, but the additional $8 million in transportation costs and $460,000 in required yearly safety stock inventory carrying costs quickly diminish the benefits. The left over savings do not offset the risks or sacrifices mentioned above. Therefore, Scotts Miracle-Gro should stay in the United States at the Temecula plant and should strive to cut costs to stay competitive, below is a list of ways this can be achieved.
Reducing Production Costs
Energy Costs
Through research, it has been determined that the location of the Temecula plant in California would be an ideal location for solar panels technology for the following reasons:
* Temecula gets on average only 6 inches of rain per year (versus the US average of 37 inches per year),
* Temecula gets an average of 0 inches of snow per year (versus the US average of 25 inches per year), and
* On average, Temecula gets over 276sunny days per year.
(http://first-time-home-buyer-s.com/temecula-home-loans.htm)
This technology has the potential to offset from 100% to 1% of the annual electricity usage. A cost analysis has been performed for Scotts Miracle-Gro using the location of Temecula, CA and the estimated usage of 8,000,000 kWh’s of electricity per year.
It has been determined that by implementing solar energy panels to offset 50% of the plants annual electricity usage, this will provide the company with the following incentives (please refer to Exhibit 2 for the full cost analysis):
* An average monthly savings of $559,600,
* An average 25 year savings of $279,660,603.33,
* A ROI of 215.82%,
* Only a 14.58 breakeven point,
* 30% Annual Federal Tax Credit, and
* The peace of mind knowing that the company is helping...

Other Essays Like Scotts Miracle

Comparing The Moral Virtues Of Antony And Julian The Apostate

1103 words - 5 pages Roman emperor Julian the Apostate and Christian leader Antony both exhibited many qualities of character during their existence. Both of them led very distinctive lives although shared several ethical values. Book 25 of “The Later Roman Empire” and the book “Early Christian Lives” show concrete evidence of this. In the following essay, I will argue how both leaders’ lives were devoted to their religious beliefs and their mutual cardinal virtues

Living In A Cashless Society Essay

1637 words - 7 pages Money in a traditional sense no longer exists. Money is becoming much of a concept than a physical material, and most ordinary bitter have not see the reality of the switch. People today are using credit and debit cards on a regular basis and in everyday situations such as meal purchased at fast food, highway tolls, clothing, groceries, gas stations, etc. all of these means of systems could be regarded as a cashless society or world. The question

The French And Indian War: The "Real" First World War

1955 words - 8 pages The Seven Years War, or more commonly referred to as “The French and Indian War”, has been called the true First World War. In this book The French and Indian War: Deciding the Fate of North America, the author and historian Walter R. Borneman paints a detailed and elaborate picture that justifies the claim of it being the first true war of global proportions. If ever there truly was a climax to the never ending feud of the European powers

Is The Use Of Animals In Medical Research A Necessary Measure?

1513 words - 7 pages Throughout history, animals have been used in experiments to test product safety and obtain medical knowledge that benefits both humans and animals alike. Every year there are numerous medical breakthroughs, such as medications and surgical instruments, which are tested on animals to insure their safety before they are deemed acceptable for human use. Even though the results of the experiments saved millions of human lives, they are also

Education And The Evolving Job Market

2363 words - 10 pages The lives of students today are changing. They are preparing for lives and jobs that have never before existed. If teachers hope to have a significant and worthwhile impact on these quickly changing lives, they must change the way they think, prepare, and instruct our future generations. Children cannot afford to have teachers who remain stagnant in their methods and ideals. Students crave instructors that are willing to allow them to tap

Young And Relentless

1737 words - 7 pages There are numerous influences that can be responsible of teenager’s behaviors and attitude as they develop. One factor that is important to these behaviors is parental figures being over involved or uninvolved in their children’s lives. Many of these effects include illegal substance abuse, rising sexual activity, underage alcohol consumption, and tobacco use. Studies show parental participation plays a key role in the characteristics developed

The Natural Law Theory

1231 words - 5 pages Obeying by the natural law theory is the only true and moral way to live life; especially a life lived in God’s image. God’s presence is a guiding factor to obtaining a moral and virtuous life, which can only be obtained by following the natural law theory. God created a set of laws as a supreme guide for humans to live life, like any law these laws were created to ensure wellbeing for everyone. The laws he created are the civil law, the natural

Resolved: Presidential Signing Statements Threaten To Undermine The Rule Of Law And The Separation Of Powers

1811 words - 8 pages The subject of signing statements has created much debate among the houses of Congress, government officials, and the public alike. These signing statements fall under the categories of constitutional and legislative history signing statements. Constitutional signing statements are those in which the president deems certain provisions of the legislation as unconstitutional, therefore they should not be enforced (Bradley & Posner, 2006

Oppressive Systems Of Government In Egypt And Animal Farm

1529 words - 7 pages As in Egypt, Orwell demonstrates through his allegorical novel “Animal Farm” that leaders are able to establish and maintain power over a people, and in turn create an oppressive and corrupt government system. Orwell shows the significant difference in the education and levels of knowledge in the animals, and how the government takes advantage of this difference. The split between the levels of intelligence is portrayed in the first chapter when

The Pathway To Psychosis

1415 words - 6 pages “How all occasions do inform against me” is a line from act IIII, scene IIII of William Shakespeare’s Hamlet. This line, spoken by Hamlet, expresses his emotional state as he is currently overwhelmed by the death of his father, the king of Denmark, and the situation surrounding it. After Hamlet learns of his father’s death he finds out that his mother has married Claudius, Hamlet’s uncle. On top of all of that, Hamlet soon after

Rated “M” For “More Censorship Not Needed”

1241 words - 5 pages Since the moment video games became a commercial success there have been people who have pushed for unfair amounts of censorship to be placed upon the content of the games and its availability to children. These groups push for increased regulations on content but there is already an appointed group to handle this issue, the ESRB. Even though there has been an increase in mature content in the video game industry, increased censorship is not

Related Papers

Scotts Miracle Gro The Spreader Sourcing Decision

4029 words - 17 pages 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

7 Case 26, Scotts Miracle Gro: The Spreader Sourcing Decision

1242 words - 5 pages RUNNING HEAD: Case 7 Case 26, Scotts Miracle-Gro: The Spreader Sourcing Decision Unit 7 Scotts Miracle-Gro Case Study Analysis Kaplan University School of Business and Management MT460 Management Policy and Strategy Author: Professor: Date: Introduction The Scotts Miracle-Gro Company based in Marysville, Ohio began in 1868 as the Scotts Company until 1995 when a merger between The Scotts Company, known for

The Separation Of Capital Ownership And Control

1577 words - 7 pages The argument of whether the separation of capital ownership and control is an efficient form of organization has constantly been a controversial issue. The criticism whether the controllers’ act is in the best interest of the owners’ wills never end as long as hired managers operate management. As the number of public companies has been increasing over the course of this century, meanwhile the American style of contact based corporation has

The Versatility And Flexibility Of Oled's

1014 words - 5 pages In April 1, 2002, organic light emitting diodes gain rise in the scientific community with their published, more practical form at Ames Laboratory. “Scientists at the U.S. Department of Energy's Ames Laboratory, in collaboration with scientists at the University of Michigan, Ann Arbor, have developed and demonstrated a novel, fluorescence-based chemical sensor that is more compact, versatile and less expensive than existing technology of its