June 2007 Big Grower

Managing Your Inventory By Rick and Dave Brown

We would like to share the recent success Riverview Flower Farm, Riverview, Fla., has had using Web-based software to manage pay by scan inventory at the garden center. This software manages availability input from our tablet PC and wireless notebooks. It receives inputs, in the form of inventories, delivered quantities and return quantities, over the Web from our merchandisers and drivers using Treo 650s. The merchandisers and drivers need no paper or phone calls to follow their routes and confirm locations and progress. They also take time-stamped pictures of store table sets as they finish each store.

Developing The System

About 10 years ago, Inntec, a company that develops products, systems and software to integrate telecommunications and data communications, helped Riverview Flower Farm move our order and invoicing from a spreadsheet software system to a database system. Over the years, we continued to add tables and reports to improve efficiency and learn from our history.

Around the time when the first Web-phone PDAs were coming to the market, Riverview asked Inntec to integrate its availability and order-placing capability into a system that could be accessed remotely. As this system was implemented in 2002, we realized we needed to keep constant focus on what was going on internally on our farms and remotely at our customers' retail locations. Oracle had introduced the "Dashboard" concept and was offering it to large businesses for CEOs and managers to keep tabs on sales, costs and accounting with live data links. I requested a Dashboard system to track sales, inventory in the stores and on the farm, and rates of sale and match it to the delivery schedules. This evolved over time to become Grower Live, a database front-end application for pay by scan selling and distribution.

Using Grower Live

This system allows us to process and track the 500 orders we deliver to 120 retail garden centers in Florida each week. The shipping manager inputs or confirms availability for each week and processes picking, packing and loading orders he receives from the two order entry managers. These managers work with the Dashboard front end of the database. They compare and analyze the actual daily sales imported to the Dashboard from the retail customers' electronic data interchange (EDI) sales reports, the inventory in the store entered from the merchandiser at the store (cycle counts), pictures taken by this same person, the weather forecast and the current calculated rates of sale.

Orders are placed with knowledge of what must be sold and how to distribute the product effectively. The orders flow to picking tickets, packing schedules, packing lists, truck assignments and routes that can be manipulated when needed with drag-and-drop ease. The assignments are automatically uploaded to drivers' and merchandisers' PDAs so they know what they are scheduled for on the next day.

A fourth manager is the driver/merchandiser manager who coordinates and trains the field people who make the deliveries and report to the system through camera-equipped PDAs. This manager has access from any Web-connected computer to live reports showing times, locations and activities of all field personnel. He can track and report current locations, times to and from these locations, how many miles per hour the driver travels and plants stocked per hour for each location. The manager can also review the work product by pictures sent at stocking completion.

The PDA saves input time and repetition, allowing accuracy with fewer personnel. There is no paper in the field, and counts come into the Dashboard as they are taken and time stamped. Unsold plants that are picked up for return to the farm are entered into the PDA as credits on another screen and reported to the Dashboard to be calculated out of the rates of sale.

Understanding The System

Grower Live is a complete sales and management tool that plugs growers into their sales locations. Whether growers use traditional sales methods or new pay by scan (consignment) and vendor managed inventory (VMI) methods, Grower Live allows the grower to manage inventory remotely at any customer location with EDI capability — this includes big box retailers. Retailers that do not supply EDI transmissions can still be served by the data inventoried by a merchandiser at the store and transmitted through a PDA interface to the Dashboard.

The system completely integrates with third-party merchandisers using any wireless PDA device, allowing growers to interface with any EDI-capable customers for up-to-the-minute sales data. When fully implemented, Grower Livecan reduce shrink or markdowns, saving its users and retailers money. Grower Live provides all the tools for the VMI system envisioned by retailers and requires fewer people to input and monitor processes, making it cost effective.

Grower Live is a subscription service that is a 100-percent Web-based ASP.net application. There is nothing to install or maintain; all you need is an Internet browser and connection. Subscriber data is stored on a secure server and backed up. Because Grower Live is a subscription service with no time commitment required, there are no front-end fees and subscribers can discontinue at any time.

SIDEBAR

Summarizing The Grower Live System

• It is designed to let growers gain control of sales efforts.
• It can be interfaced with other systems.
• The software is free; charges are based on usage.
• Growers can save in shrink and markdowns.
• The system uses a Web-based ASP.net platform from Microsoft.
• Complete support and training are available.
• It interfaces with most big box retailers.
• Works with different sales models (standard sales, pay by scan, consignment).
• Reports are generated as needed.
• Grower Live is built to link to QuickBooks and can be customized to import from production software and export to accounting software.

Experience Grower Live At Short Course

Riverview Flower Farm will demonstrate Grower Live at the OFA Short Course in Columbus, Ohio, July 15-17, in Booth 2728. Also, plan to attend a talk on how to make pay by scan work on Monday, July 16, at Short Course. Rick Brown and Gary Mangum of Bell Nurseries, Burtonsville, Md., will discuss how they plan, deliver and market to make profit in the pay by scan environment.

Making Pay By Scan Work Profitably

February 2005 was the start of the pay by scan era for Riverview. We viewed it as an opportunity to bring new and existing items to market without having individual store buyers pass judgment and determine if and at what level to stock items. With the risk now shifted to growers, we grow more best sellers, more items we can hold on the farm or can be slowed in production, and more items with longer shelf life, but there are times when it just does not work out. The risks are great, and the rewards can be substantial. Costs are going up and prices have followed, but recently with the drought and sagging economy, it has been less profitable.

We watched two primary bedding plant suppliers have the wheels fall off under pay by scan. What they did wrong, from my perspective, was inefficient supply and undersupply at production and store level. They lacked an effective system for tracking rate of sale so they just undersupplied. They cut production at the farm and undersupplied the stores in an effort to reduce shrink. Without a system, their employees floundered and lost direction and incentive. Can growers, especially big corporate growers, survive pay by scan without supplying to the rate of sale?

Once we knew we would be allowed to supply to the rate of sale, we immediately increased production and acquired more facilities. Without the process of soliciting 500 orders a week and having to wait to get 500 deliveries checked and received and without having to battle for dedicated space, we seized the opportunity to grow and stock items that would maximize their sales and profitability and ours. We redoubled our efforts on software management tools and developed Grower Live. Our customer was now sending us daily reports of what was selling at each store, and we calculated the rate of sale of items to determine stocking levels and efficiency in supplying each store.

To be profitable at pay by scan, we have to know what to sell, what level to stock at and what will hold space until it sells when traffic is low. We monitor sales and compare history and supply to projected sales levels of inventory using all the information we know and keep at our fingertips on the Dashboard of our Grower Live software.

We don't just put in what we have and hope it sells like it did in the past. We monitor daily sales and stock to the rate of sale. From this tracking, we learn the current rate of sale of traditional items that may be in decline and the current rate of sale of new items so we know how much of these items to produce in the future. Grower Live helps us make adjustments every day rather than waiting until the end of a season for analysis.