Recent research by Plantform has highlighted that inventory management remains a significant challenge for growers. Despite advancements in technology and software solutions, the conversations around this issue remain strikingly similar to those held 15 years ago. In this article, William van Loenen explores the root causes of these challenges and proposes practical solutions to improve inventory management in the horticulture sector.
Why Inventory Management Matters
Inventory management is not an end in itself, but rather a tool to streamline operations and enhance organizational efficiency. Effective inventory management ensures predictability and reliability for customers, providing consistent information to employees and aligning sales with actual stock levels. This helps avoid overselling or underselling products.
Beyond operational benefits, proper inventory management is crucial for financial accuracy. It enables accurate valuation of inventory and work in progress, reflecting true asset values in financial statements. It also supports precise cost price calculations, accounting for fluctuating expenses such as energy costs. Furthermore, it facilitates per-order margin calculations by considering the costs associated with specific production batches, ultimately contributing to better financial decision-making and profitability.
Key Components of Inventory Management
Inventory management is a broad concept that involves multiple aspects. It begins with planning inventory based on demand, even before plants are planted in the greenhouse. However, deviations from the plan are common due to various factors such as production variations, replacement varieties, delays, plant loss, and differences in growth time.
To gain reliable insights into inventory management, it is essential to plan for expected deviations and accurately record actual outcomes. This ensures clarity in both availability and financial value. Key variables that need to be controlled include germination rates, plant loss, growth time, seasonal influences, uneven growth, and product characteristics. Effective management of these factors helps align planning with reality, enhancing operational efficiency and financial accuracy.
The Real Problem: Execution
While good software packages can effectively plan inventory and availability, the real challenge lies in execution. Ideally, deviations from the plan should be recorded to create an adjusted plan. However, growers often resist additional administrative tasks, stating, “We are not administrators.” This highlights the core issue: to improve insights, growers need both a good system and accurate data collection from the greenhouse. The question is how to collect reliable information with minimal effort.
Five Practical Solutions for Effective Inventory Management
Connect Planning to Greenhouse Automation
If you use a sowing machine, potting line, or automatic container system, connect these to your planning software. Based on actual quantities, the planning can automatically recalculate for the remaining crop cycle.
Register Quantities with an App
If machine integration is not possible, provide operators with a simple app to enter the number of sown, potted, or transplanted plants. This is especially effective if the app is available in the operator’s native language. Plant movements can also be registered this way by scanning batches and new locations.
Manual Registration During Greenhouse Walks
Greenhouse walks are often conducted to assess batches and planned delivery weeks. A simple app can assist by allowing adjustments to delivery weeks, marking batches as ready, or registering losses. Directly entering this information into the system provides the sales team with immediate updates.
Automatic Registration During Greenhouse Walks
Automation can play a significant role here. Companies like Track32 and Corvus are increasingly able to count inventory and assess maturity. Using drones or cameras mounted on booms can automatically update the current status in your planning.
Delivery Registration
Tracking the delivery of specific batches and quantities is a common pain point. If inventory has been registered during cultivation, the system can determine which plants need to be picked based on the order lines and customer requirements. Once picking is confirmed, the inventory is automatically deducted from the assigned batch. This provides real-time insights into current inventory and enables per-order margin calculations.
Effective inventory management is crucial for operational efficiency and financial accuracy in the horticulture sector. While planning can be streamlined with good software, the real challenge lies in execution and data collection. By leveraging automation, simple apps, and practical solutions, growers can improve their insights with minimal additional effort.
