Feature Story
Industrywide project aims to cut costs by standardizing the
global supply chain.
by Cynthia L. McGowan
An unprecedented coalition of organizations from all segments of
the flower business, from growers to importers to wholesalers to
mass marketers, has come together to bring 21st-century
technology to the global floral supply chain. Organizers say the
project, when fully implemented, will save money and labor and,
ultimately, could result in fresher flowers, spurring consumers
to make more purchases.
Automating manual processes, such as processing purchase orders
and invoices, “will bring a significant amount of dollars to
everyone in the supply chain,” says Gary Fleming, vice president
of industry technology and standards for the Produce Marketing
Association (PMA), one of the members of the Floral Logistics
Coalition, which is spearheading and financing the project. “I’m
talking not only cost savings but also cost improvements. There
is a plethora of
both to be had with the incorporation of these standards and
technologies.”
The key to the project is standard product identification
numbers that all players in the supply chain would use to order,
track, identify and invoice floral products. Industry trade
organizations formed the Floral Logistics Coalition to study
adoption of the standards, which have been in use for many
products sold in supermarkets for decades. In a news release
from the coalition, Ron McCormick, vice president, produce and
floral, for Wal-Mart Stores, Inc., says, “We strongly endorse
the direction of this initiative to bring the floral industry
into a more efficient world so it can utilize data standards and
technologies. We have seen the benefits of using these standards
and technologies in other areas of our stores and are eager to
do so with floral.”
And Mr. Fleming points out, “The road has been taken by other
sectors that we can learn from, and therefore, we should be able
to implement things a lot faster.”
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supply chain technology
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An initiative by the Floral Logistics Coalition aims to improve
the supply-chain process by using standard product
identification numbers. Here are key
points:
PILOT STUDY Twenty-eight companies, representing all
facets of the industry, are testing guidelines for implementing
Global Trade Item Numbers (GTIN) and
Universal Product Codes (UPC) for all floral products.
BACKERS The Floral Logistics Coalition, composed of the
Produce Marketing Association (PMA), Association of Floral
Importers of Florida (AFIF), Wholesale
Florist & Florist Supplier Association (WF&FSA), California Cut
Flower Commission (CCFC), California Association of Flower
Growers and Shippers (CAFG&S),
Society of American Florists (SAF) and 12 other companies, is
sponsoring the study.
BENEFITS The sponsors say the standards would cut costs
by automating labor-intensive manual processes; increase
visibility in the supply chain; and, in the
long run, sell more flowers.
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cooperative effort
The Floral Logistics Coalition, also composed of the Association
of Floral Importers of Florida (AFIF), Wholesale Florist &
Florist Supplier Association (WF&FSA), California Cut Flower
Commission (CCFC), California Association of Flower Growers and
Shippers (CAFG&S), Society of American Florists (SAF) and 12
other industry companies, took the first big step in the project
with an industrywide meeting in Miami, Fla., in June. About 150
people representing more than 80 companies from all channels
involved in floral distribution were at the meeting, which
organizers say is a testament to the importance of the project.
Says Christine Boldt, executive vice president for AFIF, “This
is one of the first times ever that domestic growers, offshore
growers, importers, wholesalers, mass markets,
supermarkets—everyone in the entire industry—is coming together
to make decisions for the entire industry. It’s never happened
before, and I’ve been exposed to the industry for 35 years.”
pilot program
The participants at the Miami meeting laid the foundation for a
pilot program testing the assignment of Global Trade Item
Numbers (GTIN) to boxes of flowers and Universal Product Codes (UPC)
to floral bunches and bouquets. In the four-month pilot, which
is expected to wrap up in November, 28 companies are testing
those assignment guidelines for bouquets, basic flowers,
tropicals, specialties and novelties. “These folks are now in
the trenches making GTIN work,” says Clay Sieck, president of
both The Sieck Wholesale Company and the Floral Logistics
Coalition.
Stan Pohmer, CEO of Pohmer Consulting Group and executive
director of the Flower Promotion Organization (FPO), is
facilitating the pilot study. Participants share feedback with
Mr. Pohmer, offering what works and what doesn’t. “So far, so
good,” Mr. Pohmer shares. At press time, the pilot companies
“were in the process of assigning GTIN numbers and UPC numbers,
and the rest of it becomes the implementation part of it,” he
says. When the pilot study concludes, the Floral Logistics
Coalition will issue a report recommending how to adopt the use
of GTINs and UPCs on an industrywide basis.
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pilot participants
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Companies that are taking part in the Floral Logistics
Coali-tion’s pilot project to test Global Trade Item Number (GTIN)
guidelines are:
Domestic growers
Brand Flowers Inc.; Carpinteria, Calif.
Ocean View Flowers; Lompoc, Calif.
The Sun Valley Floral Group, Arcata, Calif.
Offshore growers
Agricola Papagayo; Bogotá, Colombia
Aphrodite Roses; Madrid, Colombia
Plantas y Flores Ornamentales (P&F); San Jose, Costa Rica
Uniflor; Rio Negro, Colombia
Importers
Bouquet Collection; Miami, Fla.
Continental Flowers; Miami, Fla.
Dole Fresh Flowers; Miami, Fla.
Falcon Farms; Miami, Fla.
Liberty Blooms; Miami, Fla.
Solé Farms; Miami, Fla.
The USA Bouquet Company; Miami, Fla.
Vistaflor International; Miami, Fla.
Wholesalers
Delaware Valley Wholesale Florist; Sewell, N.J.
Greenleaf Wholesale Florist, Inc.; Brighton, Colo.
Hardin’s Wholesale Florist Supply; Liberty, N.C.
Pennock Company Wholesale Florists; Philadelphia, Pa.
Pikes Peak of Texas, Inc.; Houston, Texas
Seagroatt Wholesale Florist; Cromwell, Conn.
The Sieck Wholesale Company; Baltimore, Md.
Vans; Alsip, Ill.
Mass-market retailers
Safeway Inc.; Pleasanton, Calif.
Wal-Mart Stores, Inc.; Bentonville, Ark.
Wegmans Food Markets; Rochester, N.Y.
Trucking companies
Armellini Industries Inc.; Palm City, Fla.
Prime Floral, LLC; Springfield, Mo.
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what it means
The assignment guidelines are important because the project’s
goal is to use the GTIN and UPC numbers when referencing floral
boxes and items, respectively.
These numbers will be the standard numbers used in the various
supply chain technologies that will bring the savings to the
floral industry through bar coding, electronic commerce, data
synchronization and radio-frequency identification (RFID).
STANDARD BAR CODES By using the GTIN standards, Mr.
Fleming says, “everyone in the supply chain can understand that
the number encoded inside the bar code as the GTIN is based on
an industry standard protocol, not a proprietary number.” That
means that at each step, from grower or importer to
transportation company to wholesaler to retailer, the bar code
information will tell receivers exactly what is in the boxes.
UPC TRACKING This is expected to benefit both retailers
and wholesalers. By attaching UPCs at the original source to
items for sale, such as bouquets or bunches, retailers and
wholesalers can better track where their best-selling products
and poor performers come from. “The UPC numbers identifying the
items will link directly to the GTIN number identifying the box
containing those items, which will be specific for the farms or
importers,” Ms. Boldt says, making tracking easy.
ELECTRONIC COMMERCE This allows trading partners to send
purchase orders, invoices and up to 32 other business
transactions electronically so they automatically will be fed
into computer systems instead of having to be entered manually.
Mr. Fleming says studies have shown electronic commerce offers
significant return on investment: The cost to manually process a
purchase order or invoice is estimated at $18, compared with
less than $9 for one processed electronically.
RFID RFID tags store GTINs and other information in tags
that don’t have to be seen to be scanned. This “no-touch”
receiving would significantly reduce product unloading time, Mr.
Fleming shares. RFID also allows for real-time inventory counts.
In addition, “you can use RFID for temperature monitoring so you
know exactly how much shelf life is left on products,” Mr.
Fleming says.
ultimate goal
Greater visibility in the supply chain is one of the long-term
benefits that project organizers point to. “Kinks in the system
will be exposed and worked on,” Mr. Sieck says. In the current
system, he reminds, little information is available about
product “between the time it’s cut and the time it’s received by
mass merchants or large retailers or wholesalers.”
Hans Brand, who serves on the executive committee for CCFC and
the steering committee for the Floral Logistics Coalition’s
pilot program, agrees that better visibility is good for the
floral industry. Mr. Brand, owner of B&H Flowers Inc., in
Carpinteria, Calif., says such transparency will encourage
suppliers to offer fresher flowers. In turn, “they’ll make
happier customers, and happier customers come back and buy again
and maybe expand the flower market. That’s
where I see a big benefit. But that’s very much down the road.”
You may reach Cynthia L. McGowan by e-mail at
cmcgowan@superfloralretailing.com
or by phone at (800) 355-8086.
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