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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.”
 
 
supply chain technology
 
 
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.

 

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.

 
pilot participants
 
 
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.

 

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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