Moving towards tailored logistics [part 1]
November 13, 2024
The world is changing at a rapid pace and the floriculture sector therefore too. Royal FloraHolland is adapting to these changes. With the challenges we face today, we understand better than anyone that logistics must be flexible, efficient and reliable. We aim to facilitate the trade of floriculture products for our growers and buyers in the best possible way. In doing so, we contribute to Royal FloraHolland's overarching goal: achieving optimal pricing at the lowest possible cost. In this two-part series, René Krukkert, Manager of Logistics Strategy & Business Development, shares insights into what Royal FloraHolland is working on to achieve tailored logistics. In other words, how our logistics platform is evolving to meet the needs of growers and buyers.
Royal FloraHolland has a prominent position within the floriculture sector. René Krukkert: “As a key player, we see an opportunity to organise the floriculture chain – connecting logistics partners, growers and buyers – in a smarter and more customer-oriented way.”
Consolidation, shifting production, the growth of smaller and more precise orders, and higher production costs are just a few examples of the changes buyers and growers are dealing with today. “That’s why it is important for Royal FloraHolland to consider how we can make the floriculture chain more efficient and achieve greater economies of scale. This has been our focus in recent years and remains the priority for my team and I every day. Our goal is to organise logistics so that our members and suppliers can sell their products as effectively as possible.”
Achieving economies of scale and efficiency in the chain together
Collaboration is in the very nature of the cooperative. This collaboration can significantly help our logistics achieve economies of scale. René: “As a cooperative, we are an extension of the growers. They prefer to focus on their products and core activities. By offering logistics on a larger scale, we create mutual benefits with the growers. They don’t need to invest in additional cold stores or finely-meshed logistics – we handle that for them.”
These economies of scale arise from the smarter use of space, resources and people, as well as from fostering the growth of the logistics platform. “We are not just a typical distribution centre. Our operations are uniquely designed for flowers and plants, where product quality and delivery speed are of the utmost importance.”
This includes opportunities for mechanisation and greater use of data: “There is still a lot of manual work in our processes at present. With the rapid increase in labour costs, the shortage in the labour market, advances in technology and the expansion of our activities to more hours of the day, the use of data and mechanisation is becoming increasingly compelling. We are exploring which parts of our processes can take the first steps in this direction.”
“In addition, sustainability is a major driver for us,” René says. “For instance, we’re already taking steps to make logistic supplies more sustainable. These include developing reusable and 100% recyclable solutions.” But designing processes more efficiently should also contribute to greater sustainability, René adds: “Using trucks, cold stores and resources wisely has a significant impact on our carbon footprint. Of course, we continue to expand our sustainability ambitions and are always exploring new opportunities.”
The power of the big picture
“Royal FloraHolland's logistics platform should continue to empower growers and buyers in their entrepreneurship, no matter how they choose to trade with each other.” René: “That is why we are both innovating and improving our processes, for example, by using smart algorithms. At the same time, while implementing new processes, we’re also developing new propositions. This includes delivering to buyers in specific time slots and supporting growers with finely-meshed logistics for both auction and direct trade. We are many things simultaneously and that is a deliberate choice. If we were to first renew all our processes and only then begin developing new services, we’d miss important opportunities. We also choose to test the added value of new services or process adjustments directly with growers and buyers. This ensures that the services we add to our menu genuinely benefit both buyers and growers.”
René highlights that Royal FloraHolland is building its logistics ‘while keeping the shop open’. “Even during these developments, we process enormous volumes of flowers and plants from growers every day, both via the auction clock and through direct channels. And we ensure reliable delivery to buyers, in time slots. This remains a top priority, now and in our future logistics ambitions.”
In part two of this series, René will discuss what we expect to develop for growers and buyers on the logistics platform in the coming years, the role Floriday will play, and how Royal FloraHolland's logistics process is becoming increasingly data-driven.
Royal FloraHolland has a prominent position within the floriculture sector. René Krukkert: “As a key player, we see an opportunity to organise the floriculture chain – connecting logistics partners, growers and buyers – in a smarter and more customer-oriented way.”
Consolidation, shifting production, the growth of smaller and more precise orders, and higher production costs are just a few examples of the changes buyers and growers are dealing with today. “That’s why it is important for Royal FloraHolland to consider how we can make the floriculture chain more efficient and achieve greater economies of scale. This has been our focus in recent years and remains the priority for my team and I every day. Our goal is to organise logistics so that our members and suppliers can sell their products as effectively as possible.”
Achieving economies of scale and efficiency in the chain together
Collaboration is in the very nature of the cooperative. This collaboration can significantly help our logistics achieve economies of scale. René: “As a cooperative, we are an extension of the growers. They prefer to focus on their products and core activities. By offering logistics on a larger scale, we create mutual benefits with the growers. They don’t need to invest in additional cold stores or finely-meshed logistics – we handle that for them.”
These economies of scale arise from the smarter use of space, resources and people, as well as from fostering the growth of the logistics platform. “We are not just a typical distribution centre. Our operations are uniquely designed for flowers and plants, where product quality and delivery speed are of the utmost importance.”
This includes opportunities for mechanisation and greater use of data: “There is still a lot of manual work in our processes at present. With the rapid increase in labour costs, the shortage in the labour market, advances in technology and the expansion of our activities to more hours of the day, the use of data and mechanisation is becoming increasingly compelling. We are exploring which parts of our processes can take the first steps in this direction.”
“In addition, sustainability is a major driver for us,” René says. “For instance, we’re already taking steps to make logistic supplies more sustainable. These include developing reusable and 100% recyclable solutions.” But designing processes more efficiently should also contribute to greater sustainability, René adds: “Using trucks, cold stores and resources wisely has a significant impact on our carbon footprint. Of course, we continue to expand our sustainability ambitions and are always exploring new opportunities.”
The power of the big picture
“Royal FloraHolland's logistics platform should continue to empower growers and buyers in their entrepreneurship, no matter how they choose to trade with each other.” René: “That is why we are both innovating and improving our processes, for example, by using smart algorithms. At the same time, while implementing new processes, we’re also developing new propositions. This includes delivering to buyers in specific time slots and supporting growers with finely-meshed logistics for both auction and direct trade. We are many things simultaneously and that is a deliberate choice. If we were to first renew all our processes and only then begin developing new services, we’d miss important opportunities. We also choose to test the added value of new services or process adjustments directly with growers and buyers. This ensures that the services we add to our menu genuinely benefit both buyers and growers.”
René highlights that Royal FloraHolland is building its logistics ‘while keeping the shop open’. “Even during these developments, we process enormous volumes of flowers and plants from growers every day, both via the auction clock and through direct channels. And we ensure reliable delivery to buyers, in time slots. This remains a top priority, now and in our future logistics ambitions.”
In part two of this series, René will discuss what we expect to develop for growers and buyers on the logistics platform in the coming years, the role Floriday will play, and how Royal FloraHolland's logistics process is becoming increasingly data-driven.
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