As the largest supplier of lawncare products on Earth, Scott’s Miracle-Gro knows something about covering a lot of ground, and the company’s supply chain operations are no exception. As Senior Vice President of Supply Chain Dave Swihart explains, the company’s reach covers North America and western Europe, with more than 40 manufacturing facilities and 18 distribution centers moving more than 11,000 orders a week, adding up to nearly 10 billion pounds of product per year.
Not only does Scott’s Miracle-Gro move a tremendous amount of product to customers around the world, but it does so with a product that is highly seasonal. The company’s core products include lawn fertilizer, growing media, plant food and liquid controls, all produced under some of the most recognizable brand names in the industry, such as Scotts, Ortho, Miracle-Gro and Round-Up. Swihart says the company does the majority of its business within a 10- to 14-week window, making what Scott’s Miracle-Gro accomplishes even more impressive.
“It’s our ability to deliver a large volume of lawn and garden consumer package goods in a highly volatile season in a way that no other lawn and garden vendor can deliver,” Swihart says. With the continuous improvements the company is making in its supply chain operations, there’s every reason to believe that Scott’s Miracle-Gro will continue to stand head and shoulders above the rest of the pack, he adds.
Far and Wide
Perhaps the strongest advantage Scott’s Miracle-Gro has from a supply chain perspective is the sheer scope of its operations. The company not only has a network of distribution centers and manufacturing facilities that evenly cover its territories, enabling same day truckload delivery direct to store or to customers’ distribution centers.
“It’s really our manufacturing and distribution footprint that really differentiates us from anyone. This footprint enables Scotts Miracle-Gro to supply and distribute at a velocity that no one else can,” Swihart says.
Of course, it requires a lot of brainpower to keep track of everything moving in and out of the company’s facilities, and Scott’s Miracle-Gro has a state-of-the-art enterprise resource planning system in place to monitor it all. Swihart says Scott’s Miracle-Gro utilizes electronic data interchange and supply chain management software with all of its accounts, which the company leverages into efficient and on-time delivery. In general, Swihart says the company delivers on time in full about 96 percent – considering the explosive seasonality of the lawn and garden business and the volume delivered by Scotts Miracle-Gro, this performance is truly remarkable.
Swihart says Scott’s Miracle-Gro knows times are tough right now, and retail customers are always looking for ways to keep their heads above water and better serve their own customers. That’s why continuous improvement is a major focus for the company, and it is making some significant steps forward that should help it strengthen its position. “We continually challenge ourselves to crush costs and improve our margin rates, so we’re continually looking at and evaluating the supply chain,” Swihart says.
For example, because many of the company’s products are sensitive to commodity prices, Scott’s Miracle-Gro is developing commodity management tools to manage and reduce risk. Swihart says the company also is looking to develop inroads into emerging markets such as China and Mexico. Lawncare products are not yet a large market in those countries, but an emerging middle class has opened up opportunities for Scott’s Miracle-Gro. Swihart says the barriers to entry are primarily cultural, and the company has the supply chain resources in place to make a big impact right away. The company also is developing direct-to-consumer channels in several European markets.
Among the improvements Scott’s Miracle-Gro already has made to benefit its customers is its focus on optimized inventory, whether customers operate on a distribution center model or a direct-to-store model. Because many retailers are concentrating on margins, Scott’s Miracle-Gro is helping them through collaborative planning and forecasting that makes it easier for retailers to predict how much inventory they need to carry and when the season will end.
Improvements such as these are going to be increasingly important for Scott’s Miracle-Gro in the years to come, because Swihart says the company prides itself on giving customers the most competitive advantages it can. Even though the company already has built a world-class operation system that spans more than 40 production facilities with standardized metrics and performance expectations, Swihart says there always will be room for improvement, and Scott’s Miracle-Gro wants to be on the forefront of those improvements.
“I think we’re going to innovate across the supply chain to allow us to continue to squeeze operating costs out of our products and out of our distribution network,” Swihart says. “It’s the quality of our people that enables the supply to perform at optimal levels on a sustainable basis. Our people and our brands are our most valuable assets, and these great assets provide Scott’s Miracle-Gro with a winning formulation.”