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The Scotts Company: Transforming The European Supply Chain Essay

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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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Every European office has own accounting practice, which leads to incomparability of data. Furthermore, IT systems are not integrated in any way. There is no united system of forecasting and measurement, which leads to errors, excessive inventories or inventory shortages. Bad IT management is also the reason for not reliable order fillings.
4. Each European office has very strong domestic culture and infrastructure, and most employees and local management resist any changes toward an integrated Scotts Europe.
5. As disclosed, 5.7% of 16,000 customer base account for 80% of sales. Considering the fact, that one of these customers was threatening to leave, it would leave a significant impact on Scotts’ performance.
6. Two Growing media plants in France and Netherlands were burdened with much higher structural costs due to their distance from the peat bogs. Also other fertilizer plants should be reorganized because of excess capacity.
7. Scotts Europe outsourced chemical supplier despite the fact
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