Every year, the horticulture and landscaping industries are faced with an all too familiar issue, finding labor. Reduced supply and increased demand...
Making the Greenhouse Supply Chain More Profitable for Everyone
Have you ever sold more than you could supply? In this final article of our series, we will put the pieces together as we look at how the supply chain works and how it can be improved upon so that everyone benefits.
Have you ever sold more than you could supply? For most industries, overselling would result in a lot of unhappy customers and a lot of damage control. Fortunately, for those in the business of selling plants, that may just result in a call to another grower to help you fulfill those orders. Collaboration is a great business practice but the time and effort spent on communicating and coordinating with other growers, distributors, and retailers can eat into everyone's bottom line. In this final article of our series, we will put the pieces together as we look at how the supply chain works and how it can be improved upon so that everyone benefits.
A Disconnected Supply Chain
The current state of the industry’s supply chain is disconnected, resulting in restricted growth opportunities and the impediment of operational efficiencies. Every informational barrier is a roadblock in overall efficiencies. That means every phone call or email requesting access to inventory levels and pricing is costing all parties time and money. No matter what supply chain model you are in, there are multiple ways with which each business communicates information, ranging from EDI to fax.This results in a lot of back and forth and a lot of manual administration. Sales reps and customers are often left in the dark on inventory and pricing information, leaving room for errors that can result in a lot of additional costs. With the ever-present pressure for a business to turn a profit on the products they carry, these inefficiencies are costly and make it increasingly difficult to stay profitable.
Cutting Costs Through Collaboration
With thousands of components required for even a single product, how do companies like General Motors or Apple manage their supply chain? How do they coordinate with all the factories and sales offices they rely on? Running out of parts would drive production to a halt and could cost millions in losses. To avoid such an expensive mistake, they don’t pick up the phone and ask if there are 2,000 steering wheels or 25,000 self-tapping hex screws available. Operating their business like this would surely cripple them under the competitive nature of their respective industries. Perhaps because of this competition, both of these industries have evolved to master the art of inventory control and as a result, availability is never in question. Obviously, growing plants is very different from manufacturing automotive or computer parts, but inventory management doesn’t have to be.
So if horticulture and floriculture differ from these competitive markets, why is this suddenly a concern for these industries? What has changed? The simple answer is consumer expectations. In our first article in October, we discussed how the consumer drives the value of a product, but they also drive the demand in the supply chain. If a bride wants forty in-bloom Daffodil flowers for her wedding in January, the supply chain needs to deliver. She expects great quality products with fast delivery and competitive prices, and she doesn’t care how it’s done. Keeping up with a customer’s demands can be a tall order, and that's why the industry needs to refine and reduce supply chain redundancies.
Finding a Solution that Benefits Everyone
Finding a solution starts with communicating with your business partners and coordinating how you transact with each other. There are a variety of options available to facilitate a more transparent and even automated way to manage wholesale ordering. For example, a sizeable floral distributor implemented the OrderEase online ordering solution in their operational strategy, allowing complete distributor visibility into what inventory their growers had on hand. This transparency enabled the floral distributor to order from their growers through OrderEase’s wholesale online ordering service without having to make a call or send an email. This technology also allows growers to coordinate with each other to fulfill a customer order when a grower has oversold a plant. That entire process was transformed from a time-consuming, paper-based activity into a simple online task that could be done in a fraction of the time. Both the distributor and the suppliers they ordered from immediately realized time savings and greater order accuracy.
No industry can afford an over inflated supply chain in today's highly competitive economic landscape. For the past decade, supply chains have been shrinking to reduce costs and to better serve the consumer. Technology has been an integral part of the shift toward a more efficient supply chain and now collaboration through technology offers all members of a supply chain the benefit of new efficiencies. Working towards a more integrated and collaborative supply chain throughout the industry will bring everyone closer to the common goal of higher margins and fewer logistical headaches.