The Scotts Company: Transforming the European Supply Chain Essays

904 Words Oct 15th, 2008 4 Pages
Company background

The Scotts Company started selling hardware and seeds in Marysville, Ohio in 1868. It specializes in seeds, fertilizers, peat, potting soils and other organic materials. By 1995, Scotts was the world’s #1 marketer of lawn and garden products. European operations were launched in 1993, with HQ in Lyon, France, and additional five European businesses acquired in UK, France, Germany, Austria and Benelux. Symptoms and problems

The main symptom and concern is that Scotts’ European sales had increased as expected, but margins had dropped, as well as synergies between the acquired companies were not working as expected. In addition, one of Scotts Europe’s largest customers was threatening to leave due to unacceptable
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Unified production lines will decrease production time, production costs and will require unified packaging materials. Only labeling should be made according to specific requirements of each customer/ country.
2. Remove supply chain management spread by zones and create European supply chain for each product line.
3. Significantly decrease number of suppliers and packaging suppliers. Signing exclusive contracts with a few suppliers will provide significant discounts and enable careful planning of costs. If done carefully, cost savings may range from 5 – 10% from total supply chain costs of EUR 380 mio, that is EUR 19 - 38 mio in savings.
4. Implement new IT solution applicable for multi-national companies, for example, SAP. This will unify forecasting and measurement systems in all of European branches, will significantly decrease number of errors, will enable EDI function with customers and suppliers. Moreover, it will integrate all accounting systems, enabling better control over daily operations (order processing, inventory analysis) and performance reviews. Estimated savings considering expensive IT costs (around EUR 2 mio), could range from EUR 2 – 5 mio per year.
5. Assign special key account managers for large customers. Introduce discounting policy and customer loyalty programs.
6. UK’s plant #1 is facing significant losses, due to high fixed and overhead costs. As future prospects are in red, the plant should be

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