What do Growers need for effective Inventory Management?

Recent research by Plantform shows that inventory management is still a major challenge among growers. As a software specialist active in the sector for many years, I still have the same conversations with growers about this topic as I did 15 years ago. So what makes this so difficult? In this blog, I explain what the real challenge is and how it can be solved.

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Why in the first place?

Inventory management is not a goal in itself. You do it to streamline your organization. In practice, it often comes down to the following:

• Being predictable and reliable for your customers
• Providing predictable and reliable information to your employees
• Selling what you have and not selling what you do not have

There are also financial reasons to have your inventory well organized:

• Valuation of inventory and work in progress
• Cost price calculation based on actual costs, including energy
• Margin calculation per order based on the delivered production batches

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What Is Needed for Proper Inventory Management?

Inventory management is quite a broad concept and involves many aspects. Even before the plants are in the greenhouse, you plan inventory based on demand. That is where inventory planning begins. Then, of course, things do not go as planned. You may produce more or less, use a replacement variety, be a week later, experience plant loss, have differences in growth time, and so on.

To gain reliable insight, you need to plan with expected deviations and record what actually happens. This translates into both availability and financial value. These are some of the variables you need to control in both planning and reality:

• Germination
• Loss
• Growth time
• Seasonal influences
• Uneven growth
• Product characteristics

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The Real Problem

With a good software package, planning inventory and availability is well arranged. From the production plan, insight into planned availability follows automatically, including all variables.

The difficulty begins in execution. Ideally, you should record all deviations from the plan in order to create an adjusted plan. But then I hear, “We are not administrators.” And that is exactly the problem. To get better insights, you not only need a good system, but you also need to collect more data about the actual situation in the greenhouse. But that is easier said than done. We want less work, not more. So the question is, how can you collect the most reliable information possible with the least amount of effort—for your controller and your sales team?

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5 Ways to register reality

1. Connect your planning to greenhouse automation systems

Do you use a sowing machine, potting line, or automatic container system? Connect these systems to your planning. Based on actual quantities, the planning can automatically be recalculated for the remaining crop cycle.

2. Count with an app

If machine integration is not possible, you can provide the operator with a simple app to enter the number of sown, potted, or transplanted plants. This is a straightforward task, especially if the app is in the operator’s native language. Plant movements can also be registered this way: scan the batch, scan the new location, done.

3. Manual registration during greenhouse walks

A greenhouse walk is often done to assess batches and the planned delivery week. A simple app can help here too. Think of adjusting the delivery week, marking a batch (or part of it) as ready, or registering losses. By entering this directly into the system, the sales team has immediate insight into the latest figures.

4. Automatic registration during greenhouse walks

Automation can also play a role here. Companies like Track32 and Corvus are increasingly able to count inventory and assess maturity. Let a drone fly regularly or mount a camera on the boom to automatically process the current status in your planning.

5. Delivery registration

So far, we have talked about inventory, but at some point, it needs to be delivered. A recurring pain point is tracking how much of which batch has been delivered and for which sales order.

If the inventory has already been registered during cultivation, the system knows where the plants are. Based on the picking order, the system can determine which plants need to be picked, according to the order lines and customer requirements. Once the picking is confirmed, the inventory is automatically deducted from the assigned batch.

This way, you have insight into current inventory and can calculate margins per order, since the cost price of the delivered plants is known.

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Mprise Agriware provides Microsoft-based business software for the horticultural industry, helping growers manage and connect all key business processes, including finance, sales, production, inventory, shipping, and more. Agriware is built for companies active in propagation, breeding, cultivation, and finishing, and has successfully completed over 250 Microsoft software implementations in the sector. Contact us for a demo.

Data source: Plantform research on inventory management among leading commercial growers focused on leveraging digitalization and artificial intelligence to keep the industry innovative and strong.