Channel-independent logistics; what does our logistics of tomorrow mean for you?

With channel-independent logistics, we are keeping pace with the daily challenges faced by growers and buyers. They want to serve their customers faster and more efficiently, in a customised way. It does not matter whether a flower or plant is sold directly, through Auction Presales or at auction. Logistics Development Specialist Michiel Holtman explains what ‘the logistics of tomorrow' means for the sector.

Keeping pace with the sector
Michiel joined Royal FloraHolland nine years ago. It was a new world for him, in which he could add value with his knowledge of and experience in logistics processes. Michiel: “I quickly learned that the floriculture sector is quite unruly. So, it is important that our logistics platform keeps pace with the market and the new logistics and digital opportunities available. I also wondered whether what we have always done in the chain was still logical and tenable."

Finding the answer together
"The answer after many conversations with growers and buyers was: ‘no’. For a very long time, we based our logistics on the rhythm of the auction, but there are more sales methods that we (can) connect to with our logistics services to ensure simplicity and efficiency in the chain. Working together with growers and buyers, this is how the idea of channel-independent logistics was born: putting unsold supply of flowers or plants in stock with us, close to the buyer."

Customised Logistics
Michiel explains: "The grower reasons based on their harvest, and divides their supply over different sales channels. Some of the flowers or plants, for example, are referred to in direct agreements or recorded in forward contracts. After that, the commercial game begins: what do I sell in day trade directly through my webshop, how much through Auction Presales or at auction?"

"In that game, we all have to deal with increasing costs, the need to work more sustainably, the growth of large-scale retail, as well as e-commerce and the shift of production to companies outside Europe. This also requires looking differently throughout the entire chain at logistics issues and at the future-proofness of the logistics services at our hubs."

Time for innovation
"We have replaced outdated technology," Michiel says. "Our logistics systems and processes were not ready for the future. They were linked to sales at auction and varied per hub. That limited us in adapting flexibly to the changing demand for logistics services. That had to change.
With the transition from distribution to order picking, for example, buyers are now being given increasing influence over the delivery time of purchases with Select Delivery. They can also receive flowers or plants purchased at auction, through Auction Presales or direct sales combined on one trolley. Logistics that keeps pace with you offers benefits to everyone.”

One sustainable, logistic flow
“We are working on a harvest-oriented process for growers, where they can enter their supply in Floriday inputs. Growers can transport both sold and unsold stock to us daily. For both auction and direct agreements, we enable a single logistics flow to our hubs as well as in delivery to the buyer, which offers opportunities for cost control, working more sustainably and leads to other benefits at the nursery, in transport and in terms of delivery to the buyer.”
"Full trolleys with combined supply for auction and direct sales (sold or unsold) are sent to us by the grower. Our logistics staff then split the trolleys after purchase per buyer and deliver in time slots. Growers may decide through which sales channels they want to trade their product right up until the last moment."

"As a grower, you retain commercial control, while we take the logistics process off your hands. With all the innovations on our logistics platform, we are able to deliver in volumes from small to large faster and faster after purchase – and that is what our growers' customers demand," according to Michiel.

Flexibility enthuses
"With channel-independent logistics, we offer customised service to growers, who are also able, in turn, to offer their customers a more customised service. Those customers may demand, for example, increasingly finely-meshed delivery; order sizes are smaller and smaller nowadays. We are bringing more flexibility to growers' and buyers' business processes with the new services."
Michiel is therefore hearing lots of positive feedback: "Growers' collective Zentoo has been involved in the new logistics system from the beginning because of the pilot and is enthusiastic about the developments. My phone has not stopped ringing with enquiries from other growers, even though it is still in development," Michiel states proudly.

Logistics strategy, work in progress
Logistics Strategy Manager & Business Development René Krukkert is also enthusiastic: "With channel-independent logistics, we are taking a major step with our logistics platform and as a logistics service provider. We are growing and changing as a chain company because the day-to-day practices of the sector are changing."

"With logistics services related to auctioning and direct day trade, we want to help the sector to move forward. We are doing so partly thanks to a state-of-the-art logistics IT system suitable for multiple sales channels that works with smart algorithms. Our ambition as an international, leading floriculture platform, and the wishes of buyers and growers, come together in our new overarching logistics strategy. It is work in progress, and in many regards we are renovating while the shop is still open, but more about that soon."