Five ways an ERP system can improve internal efficiencies

 1.       Inventory management and pricing

An ERP system will suggest purchasing activities and try to keep your inventory at a minimum. “Otherwise, you’re going to have pots that are out there and all they’re doing is tying up cash. And those pots, over time, are going to crack and go bad,” Greg Lafferty, Practical Software Solutions’ senior account manager, says.

An ERP system can also help determine product pricing. The software factors in labor costs, material costs and overhead burdens to help growers achieve more accurate margins.

2.       Production requirements

• An ERP system can help you determine how much you should produce and when you should produce it.
• Growers should only purchase enough to cover potential product failure. If you’re buying a seed and it has a 90 percent germination rate, then you only want to cover the 10 percent failure rate, Lafferty says.
• An ERP system can help determine the exact amount of product you need to purchase, as underestimating your need can lead to disappointed customers and loss of business.
• An ERP system can also help growers develop a production schedule for years into the future. That vision can prevent under-producing or overproducing product.
• The goal is to sell and ship in a timely manner. An ERP system is going to utilize a forecast based off projected dates, inventory management information and material readiness.

3.       Labor efficiency

Setting labor standards is an important function. If a grower determines that an operation should be churning out 100 products an hour, an ERP system will track that goal and the actual production. If the actual production is 90 products per hour, that’s probably within an acceptable margin. If the actual production is 50 products per hour, something is wrong and the grower can identify the holdup.

4.       Regulatory Compliance

Preparing for audits will make them less grueling. Growers have to be aware of regulations from the EPA in areas such as chemical use, regulations from the Federal government over the Affordable Care Act, and Department of Transportation regulations for shipping plants. A good ERP system should track all the data you’ll need to pass the audits. For example, employee payroll status (tracking full-time employees versus part-time employees) will be monitored. When the government then asks for employee status, what they do, where they spend their time in your facility, the ERP system can provide much of that information.

5.       Space management

Growers can only grow what they can put on the floor, what they have space to grow. Horticulture product isn’t transient, it needs to sit and grow over a predetermined period of time. Products can also change size, causing the space requirements to change. An ERP system can help manage changing space requirements while maintaining the flow of production.

For more information about software solutions for your growing operation, visit www.growervertical.com.