Measuring the cost of production for individual plant products has long
been the red-headed stepchild of nursery business management.
Many reasons exist for this management oversight. A partial list of reasons
given include;
•
There are too many different plant products to measure production
inputs, the data entry task is horrendous.
•
Cost doesn’t matter because we have to offer a full and varied
selection to our customers. They need to be able to get a full load
from us in order to make shipping manageable.
•
Cost doesn’t relate to sale price because plant price is set by the
changing popularity of each plant variety.
The above list of reasons not to know individual plant production costs may no longer hold water.
The current state of the economy may indicate that we need to know individual plant product costs and
profitability in order to discover creative ways to adapt to prevailing market conditions.
At ACS, we have developed many different production analysis systems over the years for specialized
areas of ag. Only recently have we come up with a way to get an accurate read on the profitability of
individual plant products for the nursery industry.
That system is now an integral part of our Nursery Sales & Inventory Management software. In a
nutshell, it works like this…
1.
You refer to your material purchase records or to a nursery supply catalog and list what
production materials cost. We call this a bill of materials.
2.
We use this list of materials to create a production plan for each plant species. This is time
consuming, but it is a one time setup that can be refined at any time.
3.
We list or import expense totals from our accounting software.
That’s it for the user input. It’s a once-per-year review of previously entered data or revise during the
year when time allows.
The computer then uses this information to provide the following screen display.
For each Plant Name / Size & Grade
Qty Total Avg Production G/L Overhead Mortality Final Total Net
Sold Sales Price Cost Ea Adjust Adjust Adjust Cost Ea Net Plant
We are especially proud of the data entry short cuts that we have provided to speed up the work in
developing the needed plant production schedules. We think you’ll agree that the management
information gained is well worth the effort..
