The Industry Shift to Just-in-Time Ordering
According to experts, one of the keys to reducing anxiety is learning to live in the moment. To decrease stress, they say, try focusing on the present without being distracted by the future. This is great advice, unless you work in the green industry. By this time of the season, most of us have one foot in 2024 while the other is firmly planted in 2025. Every day we split our attention between finishing the current year out strong and planning for how to make the next one better. Much of this comes down to finding ways we can cut costs and reduce shrink. The pandemic caused disruptions in the supply chain that forced us to order weeks, months, and, in some cases, years ahead of what were then considered normal timeframes. But, even though the pandemic officially ended over a year ago, ordering processes still haven’t returned to pre-Covid timelines in some instances. (We’re placing liner orders with some of our vendors two years in advance, and I don’t see this changing anytime soon.)
At the nursery, a fundamental part of our future planning process is also fine-tuning our production plan. Simply put, our goal is to grow what our customers want. Ideally, we would never run out of our top-selling plants while limiting the overproduction of others. But, like most things in life, this falls under the category: “Easier Said Than Done”. Of course, there are metrics we can use to help determine which varieties are trending and which are on their way down. We can run sales numbers and look at three-year averages. We can poll our customers and analyze survey results. We can attend industry events and follow trends on social media. But there is also a degree of production planning that comes down to anticipating future demand for new items and following a gut feeling. Not to mention the challenges associated with propagating and sourcing liners and bringing the desired number of finished plants to market.
In the recent past, we relied on yet another indicator of demand to help plan our future production - customer prebooks. But, recently, more and more of our customers are leaning away from placing prebooks in favor of just-in-time ordering. In many ways, this makes everyone’s lives easier. Our customers can order what they want, when they need it, without being held to prebook numbers or remembering what’s left on their order. Our sales team spends less time managing open orders and more time promoting inventory that looks good right now. And our inventory team is more focused on shipping out budded and blooming plants than on running open order reports for time-sensitive plant material.
But this trend poses challenges for our production team, especially when it comes to providing last-minute plant material for large landscape projects. Every nursery wants to say “yes” to that big job with thousands of grasses going next month. But it’s difficult to plan for those types of projects without advance notice. This is especially true in our current economic climate. With the rising costs of labor and other inputs over the past few years, many growers have been hyper-focused on keeping the reins tight when it comes to production. Every plant we don’t sell negatively impacts our margins.
But we also understand the challenges our customers are facing. This shift in purchasing habits is driven, in part, by labor shortages and delays that create uncertainty and make the timing of jobs a moving target. As buyers struggle to adapt to constant changes, it’s clear why just-in-time purchasing is more practical in many cases than booking an order months in advance.
So, what is the solution? I don’t think there’s an easy answer at the moment, but I do believe that flexibility is key going forward, both on the side of the growers and of the landscape contractors. Those of us in production will need to have more realistic expectations when it comes to this new normal of buying practices, and landscape designers will need to be more open to subs. As always, communication is essential between us and our customers. Only when we fully understand the challenges the other faces can we work together to find a strategy that works for all of us.
