by DENNIS CRUM
EACH year, growers devote more time and focus toward planning the next spring’s production. Businesses are under pressure to reduce shrink, increase sales and margins and satisfy market demands more than ever before.
Because production planning is so critical to an operation’s profitability, growers should consider these factors for success.
Detailed records of the amount started versus the sold history for each line item should be kept and analyzed. Sales history by container size and type is helpful, but detailed records for each individual item is best. These records will better show the under- and over-performing items.
2. Timing Of Sales
Tracking the sales of specific items is important, but it is equally important is to analyze the timing of these sales. Knowing which items sold out very quickly in relationship to their scheduled finish date is very helpful information. This data should be compared to other items that sold through well, over an extended period of time. Growers can use this information to plan for additional production of the one crop and possibly reduced levels of the other. Sell-through is crucial, but crop turns are critical.
3. Good Crop Notes
Be sure to walk the crops at various stages of the growing schedule and shipping. Take good notes on what looked good, what didn’t and what adjustments were made and planned for the future. There can easily be a short list of items recommended for dropping from the program due to poor performance. At certain times, there may also be crops that grow and finish very nicely, but just don’t sell through at retail. Remember, looking solely at sell-through numbers and not at the crops doesn’t paint the complete picture. It only shows a portion of the situation.
4. Customer Feedback
Discuss the crops produced with your sales staff, merchandisers, retailers and consumers, if possible. Sales numbers do show what they liked and were willing to purchase. However, we should also be asking what they liked about the crops, why they purchased, and why they didn’t purchase other items. It’s much easier to sell the consumer what they are looking for than to continually try to anticipate or create new demands.
5. New Varieties
It’s important to gather and evaluate information on new varieties each year. There are too many new plants introduced each year to simply grow a few of each. Attend trade shows, read catalogs, talk to salesman, visit trial gardens and grow some trials of your own. Based on observations and discussions with your staff and customers, select varieties that not only fit into your greenhouse production plan but also serve the needs of your customers.
After reviewing the factors already discussed, growers must also address the profitability of all crops grown. Again, if good sales records and accounting practices are followed, growers should have information available to measure the profitability of each crop, determine a pricing strategy, and decide whether or not the crop should be grown. Remember, input costs are only one factor when determining profitability. Growers should not blindly allow input costs to influence crop selection or planning.
Other Key Considerations For Successful Planning
• Select container size and type. Based on sales records, profitability and customer feedback, offer a selection of container sizes that meet the demands and perceived value of your customer. As with plant varieties, there are countless container types and styles in each size available. Select the container style and color best suited to meet the need of the customer. When selecting containers, their cost and effect on profitability must also be considered.
• Combination planning. The production of combination containers has become a huge portion of growers’ production planning and requires great care and attention to detail. Good growing notes from the previous season, sell-through information, customer feedback, new varieties and trialing of new combinations all need to be considered. Plan a good mix of combinations to satisfy customers’ needs. These combinations should also be selected to grow well together and perform well for the consumer.
• Plan the growing environment. While developing a production plan, it is very helpful to plan the space required for each crop. This thoughtful foresight often provides the best growing environment for each crop.
• Plan production numbers to best use the plants ordered. When planning production numbers, most growers account for the amount of space available and for the number of containers wanted. These numbers are often in multiples of 10, 25, 50 or 100. If not already doing so, try planning production numbers to use full liner trays. It’s amazing how many partial trays can be avoided if this idea is used.
On many grower visits, I have seen a 10 to 15 percent overage of seedlings or rooted cuttings. Another option would be to calculate in advance any amount of expected overage and have a plan in place for their use. This could involve planting additional containers (of the same or different size), additional combinations or save to use towards the next week’s plantings. How the additional plants are to be used is important to both profitability and labor efficiency.
Failing To Plan Is Planning To Fail
Consider using these factors as a guideline when preparing for upcoming production planning. Hopefully, growers can create a production plan that meets customer needs, and does so with increased profits and with less guesswork and stress.GG