Adopting Modern Greenhouse Technology Can Take Pressure Off Your Team
April 15, 2023 As the greenhouse grower market continues to expand rapidly, there’s also pressure from the supply chain. This includes rising costs as well as the uncertain availability of planting pots, soil, fertilizer, pesticides, and other bill-of-material components that are needed to produce finished products.
Given these trends, now more than ever, growers have to become more efficient in their operations. The best way to achieve this is to adopt modern technologies like an advanced ERP platform that runs in the cloud.
Manual processes supported by spreadsheets and entry-level accounting systems can work to a certain extent. But as the business volume grows and as customer demands change, using these tools makes it difficult to scale operations. Management quickly realizes the constraints of legacy applications as they struggle to set up efficient processes.
To solve these challenges, greenhouse growers are feeling pressure to adopt new technologies. At the same time, they may feel resistance to change — the staff wants to keep doing things the way they always have. But sticking with legacy applications can have a detrimental effect on the long-term health of the business, whereas a modern ERP platform can play a pivotal role in driving business success.
In this article, I examine how an ERP platform streamlines vital business processes for greenhouse growers. I also present how an efficiently running business makes it easier to handle transitions as employees leave the company or change roles, or when ownership is handed down to younger generations.
Manual Processes and Spreadsheets Create a Lot of Extra Work
Consider the manual work your internal teams go through if you rely on spreadsheets for cost accounting, inventory management, and production planning. For example, your purchasing department negotiates lower prices with a pot manufacturer. Before they can create a purchase order, they need to know how many plants the business plans to produce and the sizes of those plants.
Purchasing checks with the production manager, who looks at the spreadsheets in the greenhouse. But then purchasing needs to ask the sales manager what’s in the sales forecast — yet another spreadsheet. Purchasing also must consider the other consumables that go along with the pots, such as soil. That means tracking down the spreadsheet that shows the bill of materials for each type of plant.
However, there’s still more work to do. Purchasing also needs to determine what’s already on hand for pots, soil, and the other bill-of-materials components — and whether any of that has already been allocated for other plants. That’s another call to the production manager to chase down the component demand report.
Then there’s what’s going on inside the purchasing department to think about. Maybe someone else on the team has already placed an order for pots. As patience begins to run out, it’s time to find one more spreadsheet on the open purchase orders and see when they are due. Quite the runaround for the purchasing team.
Automating Processes and Providing Real-Time Data Access
By turning to a modern ERP platform designed specifically for the horticultural industry, growers can solve the challenge of spreadsheets while gaining access to real-time information and automating key processes:
- Cost Accounting — Know what each plant truly costs from seed to sale. This includes the soil, fertilizer, labor, pots, potting machines, water, pesticides, and shipping.
- Inventory Management — Compare the sales forecast to inventory availability so you know what you can sell and what you need to grow or order.
- Production Planning — Determine the required capacity (greenhouse space, staffing, transplanters, sticking machines) to transform plants and inventory components into finished products.
Looking at one example of how a modern ERP platform can help, a centralized system provides access across the business to show the sales demand forecast, which can be exploded into the required bill-of-materials components. The system then automatically generates a report or dashboard so managers can look at the on-hand availability and open purchase orders pertaining to those components. The purchasing team knows exactly what they need to buy and how soon the items need to arrive.
This capability is particularly helpful for larger growers who have multiple greenhouse sites with territory sales teams. They can roll the activity of the sales teams and the greenhouse into one report to make sure all needs are met, and to look for opportunities where one territory might have surplus inventory to transfer to another territory.
Appealing to the Younger Generation
With a modern ERP platform, you can nix the guessing game by accurately reporting on costs, inventory, and production so it’s easier to make profitable business decisions. The return on investment of streamlining your planning processes comes from being able to scale the volume of business you handle while also allowing you to operate profitably.
Even more importantly, the ERP platform brings all of your processes and the knowledge of your internal team into one central database — where information and the status of inventory, production, procurement, and sales can all be readily shared.
This “single version of the truth” created by your modern ERP platform also eases the burden when employees leave or switch responsibilities. Key information and how processes run no longer live inside someone’s head, and you don’t have to worry about someone “winning the lottery.” Anyone new to the business or taking on a new role can easily jump right in, see how things run, and access the information they need to do their jobs.
You’re also in much better shape should you decide to sell the business, or if you retire and turn it over to a family member or friend. The younger generations are accustomed to working with modern technologies on their smart devices that automatically push real-time data and streamline workflows.
They don’t want to join businesses that rely on older, manual processes and paper reports. They want a modern ERP platform that gives them all the information they need about how to run the operation effectively so they can hit the ground running.
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