Monday, July 6, 2009

JIT: But in time for the growers?

Wrapping up this spring, you can see the post-spring weather report and the results of the Industry Pulse survey at Today's Garden Center magazine. Sounds like it was a wet spring for the northeast, but really great in other regions of the country. Our survey showed that foot traffic was up, but the average ticket was down this year.

The most interesting thing to come out of this spring has to be the retailers' growing reliance on a just-in-time live goods policy. Retailers went back to growers to replenish supply during the spring, making fewer inventory purchases before the season started. What will this mean for next year?

It sounds like a good idea, but what if we do find a way to get young people into the garden center, and the shelves are bare? A ridiculous oversupply is no good, but running out of product isn't good either. Is the JIT balance easier to manage than I'm thinking, or are we up for several years of tinkering with this system to make it work?

And how with this affect the grower side? Will growers keep growing enough on spec to keep up with these last-minute orders? I guess they'll have to if they want to sell all they can through the independents and not miss any opportunities.


Andy said...

The choices are not JIT or running out of inventory. It's a basic premise of Lean- only producing what the customer wants, at the rate the customer wants it. Carrying safety inventory in the form of spec or spoilage at the retailer is a convenience cost for the grower that the customer is not willing to tolerate.

Sid Raisch said...

Agree that JIT in the garden center should not be the goal. Replenishment cycle is what you're really after. The idea is to have the amount of product on hand required to offer a customer-attracting selection. Having more than necessary on hand drives up costs to carry the inventory, costs to maintain it, and increases shrink.

How much is needed can somewhat be predicted. The trouble is that in many instances traffic dies below the level needed to carry an item. So what do you do then? - carry it anyway and lose money, or discontinue the item either seasonally or permanently? You can't have everything in stock all the time and expect that to work.

One of the competitive advantages of replenishment is that you can have fresher product and more frequent delivery from the grower allows you to bring in seasonally new and exciting items. This is good for the grower who will do it, the retailer who does it, and consumer who buys fresher and more exciting product. - win-win-win.

Dr.Cathy said...

We are growers and don't grow anything on spec. Our spring orders have to be in by August 31. If a customer has an order on the books we work with them thru October 31 to finialze it. Then we are done with the planning part of our business and focused on the execution of the spring plan. We love the words "Sorry, sold out" during the selling season. Our message to the Garden Centers, Retail chains, and landscapers is PLAN AHEAD, ORDER 9-12 months out, have a season selling plan. Keep in mind our buffer is just 10% of our committed orders. Good Luck. We are looking forward to spring 2010 and beyond!