How to make the supply chain more profitable

A disconnected supply chain could lead to losses in time, efficiency and revenue. How can we make it more profitable for everyone involved?
January 07, 2019
Written by Cassandra Smallman
Have you ever sold more than you could supply? For most industries, overselling would result in unhappy customers and a lot of damage control. Fortunately, for those in the business of selling plants, that may just require a call to another grower to help fulfill those orders.

Collaboration is a great business practice, but the time and effort spent communicating and coordinating with other growers, distributors, and retailers can eat into everyone’s bottom line. In part 3 of our series, let’s put the pieces together as we look at how the supply chain works and how it can be improved on so that everyone benefits.

A disconnected 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 efficiency. 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 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 on a business to turn 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 each 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. But 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 like this would cripple them from the competitive nature of their respective industries. Perhaps because of this competition, both industries have evolved to master the art of inventory control, and as a result, availability is never in question. Growing plants is clearly 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 there a concern all of a sudden? 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 daffodils in-bloom for her wedding in January, the supply chain needs to deliver. She expects great quality products, delivered quickly and at competitive prices. She doesn’t care how it’s done. Keeping up with a customer’s demands can be a tall order. That’s why the industry needs to refine and reduce supply-chain redundancies.

Finding a common solution
Start by communicating with your business partners and coordinating how transactions are done. There are a variety of options available to facilitate a more transparent and automated way to manage wholesale ordering. For example, a sizeable floral distributor implemented an online ordering solution in their operational strategy, allowing them to see what their growers had on hand. This transparency enabled the floral distributor to order from their growers through the same wholesale online ordering service  without having to make calls or send emails. This technology also lets growers coordinate with each other to fulfill an order. That entire process was transformed from a time-consuming, paper-based activity into a simple online task that could be done at 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 overinflated 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 can further benefit all the members within it.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.


Cassandra Smallman is a marketing specialist for LinkGreen, an online ordering and supply chain technology solution in the lawn and garden industry. For information on LinkGreen, visit www.linkgreen.ca

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