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“Failing to plan is planning to fail” is a well-known saying we all can relate to.
In any business, planning is one of the ingredients for running a successful operation.
Planning is Essential
Planning is even more important in the growing industry due to the large number of items that can be grown, the complexity of the supply chain, and the seasonality of the product.
A grower is continually trying to balance four opposing forces:
- Suppliers
- Customers
- Internal Resources (materials, space, labor, capital etc.)
- Mother Nature
A grower must have the sequence of the arrival of needed raw materials timed to coincide with the availability of their resources at the right time to plant so that when it is time to be sold the plant is ready to be sold AND when the market is ready for it. And with that intricate orchestration, a grower constantly wonders what effect good or bad the weather will have.
Despite the lack of direct control of these opposing forces, a grower can increase the chances of success with consistent, iterative planning and review as part of their overall management strategy. Planning data, tools, and processes should be part of a grower system for managing.
Planning Answers Questions
Grower planning involves answering key questions like:
“What items can I sell next year, what will my customers be buying?”
“What items am I going to grow this year?”
“What items should I not grow?”
“When do I need to plant each crop?”
“What raw materials do I need to order?”
“When do the raw materials need to arrive so I can plant on time?”
“How much will this production plan cost?”
“Will I have enough space to grow?”
“What changes in my labor profile will be needed?”
“When will each crop be ready to sell?”
“Will I make a profit on this year?”
The ability to answer these questions with any accuracy either requires a prodigious memory or some data tools to assist the process. The best growers understand that effective planning is the combination of experienced employees with comprehensive data.
A good plan is both a road map for future activities as well as a memory of what was planned and done when a system is used to record actual versus plan.
Planning Requires Data, Lots of Data
For an annual/perennial grower that sells a couple of hundred SKUs, the data required to represent yearly plan and execution can be large and difficult to manage. A plan and its constituent records could be thousands of records representing finished good item details, raw material information, planning records, raw material ordering records, receipts, and actual production execution records. And that is just the production side of the business. When you add the fulfillment side there are also the quotes, sales orders, invoices, credit memos, pick or pull slips, labor plans, bills of lading, back orders, and the like.
Nursery and tree growers have similar needs but the added pressure of planning for digging and how much of a given size crop to reserve for bumping to the larger size for next year. That is additional data that needs to be created, tracked, managed, and then used for better decisions and plans.
As you can see everything you need to track quickly becomes large quantities of data.
Running a growing business carries a huge data problem with it.
Orchestrating the Plan
A plan not followed is not effective.
Effective orchestrating of all these areas requires diligence, multiple skills, good employees, a good knowledge base of information, and effective communication channels with customers and suppliers.
It also requires some software tools to codify and manipulate the information making up the plan and to iterate through the plan changes and visualize them easily.
Some small growers manage with paper and pencil. Some use the venerable Microsoft Excel as a tool to interact with the data. Many growers still have very manual processes for planning and forecasting.
There are some software programs and web applications that help a grower plan as well. For example, GrowPoint has a powerful production scheduling and tracking engine.
Handling Changes
In our industry, plans can change quickly due to a variety of factors. Plants die, bugs infest, suppliers are late, customers cancel. There are hundreds more reasons plans change. The grower’s job is to take all this in stride and still have products available to sell when it’s time.
When you couple that with the changing demand trends from the consumer side, I believe we are entering a time where “doing what we have always done” as a planning strategy that could lead a grower toward business difficulty.
However, in combination with other basic management practices, diligence in planning and review can improve outcomes and enable more proactive solutions when the inevitable exceptions and demand changes occur.
Learn More
Contact us to set up a no obligation call with our knowledgeable and experienced staff to find out how GrowPoint can help improve your operation and learn more about our GrowPoint Production Planning and Tracking Consulting solutions.
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