Supply chain logistics Q&A

Added April 26, 2022
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The global supply crunch remains one of the top challenges horticultural businesses like yours face today. Before the pandemic economy created gridlocked ports, empty shelves, and a lack of equipment and provisions, supply chain management was rarely a top-of-mind concern.

However, as we move into a third year of painful delays and even some business closures, supply logistics within the industry are taking the spotlight. Your business’s survival could depend on how well you navigate the supply chain crisis.

At the December 2021 GROW Executive Summit, Craig Reynolds, senior director of operations at Hoffman Nursery, Inc., presented “Managing Your Supply Chain for Change”. He outlined tactics for navigating today’s logistics and supply chain issues and stressed that while you can’t eliminate uncertainty, you can prepare for it.

A Q&A with Craig Reynolds

We tapped into Reynolds’ expertise and asked him a few pertinent questions about the current status of the supply chain and how the horticultural industry can adapt.

In three words, what’s your take on the current supply chain challenge?

Be well-prepared.

How much longer will supply chain issues directly affect horticultural businesses?

It’s uncertain at this time, as all markets are still seeing the effects of the past year. Raw materials shortages and labor issues have increased cost and lengthened lead time for most items.

Should growers already be ordering supplies for 2023? If so, which products are the most crucial to plan for that far ahead?

Yes. Plastic, soil, safety supplies, and items you can’t do without should already be ordered.

Think through every input—what would shut down my production? Storage needs are increasing to add space for a larger buffer of materials kept on hand. We tended to run leaner in the past and didn’t have the surplus of materials on hand that we’re starting to keep now.

What are some popular products stuck in the supply chain? Is there a high-demand item no one is getting?

Forklifts and trikes for material handling and plant moving. I heard recently manufacturers have already sold their capacity for 2023 and are looking into 2024. Automation also has longer lead times. Most big-ticket items have longer lead times, especially if they’re coming from overseas.

Are there benefits to the Just in Time or Just in Case approaches?

Yes. These can be effective if the lead times are realistic. The challenge has been that the product timelines aren’t realistic so we’re purchasing earlier than we need to, to help offset the risk of not having it. 

At Hoffman Nursery, our plastic supplier had trouble with their production because of increased demand, then had a fire on one of their production lines. The original dates were changed by six weeks. During this time, we ran out of pots and had to work with another nursery that had extra pots they could ship us so we could continue production.

Does business size have any effect on managing supply chain challenges?

The smaller companies can be more agile and flexible with adapting to some of these shortfalls, whereas it can be more difficult for larger companies to do this.

Do you see any new trends in how horticultural businesses manage their supply shortages? For example, are shops growing their own inventory, relying on local sources, or adapting new technologies?

Automation continues to increase at many nurseries. Some businesses are becoming more vertically integrated to help them have control over their supply chains. There’s been a big push for businesses to sell online, which has required more live availability and tighter controls.

Is automation realistic for most growers or garden centers?

Yes, certainly for growers. This would include material handling, greenhouse, or controlled environment systems. They’re even making weed-killing robots for big ag! One of the bigger issues is standardizing product lines—not necessarily types of plants, but sizes or tray counts. The more sizes, the more complex and expensive it is to automate.

I think the garden centers have to look at what they can automate. Like growers, labor will remain a limiting factor and their ability to pay more will certainly help attract good candidates. Systems that might help garden centers are those that help them get data about their customers to turn over more inventory and be more profitable. This is similar to grocery stores and other loyalty programs that help better target each customer.

Are there emerging suppliers businesses can rely on?

For us, at Hoffman Nursery, there’s been more diversification of suppliers rather than having all our eggs in one basket. My recommendation is to outlay what your top 10 commodities are and review your sourcing. Reach out and evaluate other suppliers for product quality, delivery, and cost.

What’s your advice to help mitigate supply chain risks?

Develop great partnerships with your suppliers to help give you a heads up about issues and to communicate about other opportunities or options if something isn’t working.

The right insurance coverage can help you through challenges

While several of the adaptations above can help your horticultural business reduce the potential impacts of supply chain risks, disruptions are sometimes outside your control. If your business faces an unexpected challenge during a supply chain disruption, it’s important to ensure you’ve secured enough business interruption coverage, also referred to as business income coverage, to help you keep your business going. 

We get it, insurance can be complex and occasionally confusing. That’s why there’s value in working with an insurance agent who understands your horticultural business and your industry. Our representatives can help you identify the coverages that make sense for your business. If you have questions or would like to review your current policy, contact us today or request a quick quote.

Related links:

No matter what you grow, your crop could be put in jeopardy if a climate control system fails. We offer coverage for plants grown in climate-controlled structures.

Learn about three critical types of business insurance coverage that can also play major roles in helping protect your horticultural company.

Your business insurance policy should evolve as your operations and risks change. Use our insurance renewal checklist to analyze where your business has changed.

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