The time for automation is yesterday

In every generation there’s always a list of experiences that start with, “I remember when.” My parents remember riding around in cars that didn’t have seat belts. I remember phones with rotary dials, and going to schools that didn’t have a computer. My kids won’t know a day in their life without a smart phone. What’s next?

Growing up surrounded by a wholesale tree seedling production, I remember when my grandfather would dig and pull the entire seedling crop by shovel, and hand grade the seedlings one by one, over a table. By the time I was 5, I would be taking rides down his 40-foot, electric motor-driven seedling grading belt. That’s where automation in our family business began.

Presently, there are a mountain of challenges the nursery industry is facing in terms of financial recovery, market share and labor. Now, more than ever, a grower has to adapt to stay financially viable in the current and future market. The time to invest in your company is now, and automation, even in the smallest form, is beneficial. 

At JLPN, we took a hard look at our overall system, of which we always felt was fairly efficient but could still use some updating. We had multiple, adjustable-speed grading belts, and we harvested the seedlings with a mechanical digger. We were making our own potting soil with the use of a 6-yard cement mixer, conveyor belts and a custom propagation flat filler. We were using multiple trailers to cart the propagation flats out to the greenhouses, where we front-loaded the greenhouses by hand. 

The reality was, our system worked when we were producing a much smaller crop, but now at our current production levels 15 years later, that same system was burying us financially. The only feasible way that we could see growing our production was to add more crew for more hours. But the reality was, labor was getting scarcer by the year, and the cost of doing business was going up.

During the financially thinnest years of the recession, we had kept afloat by adding small pieces of equipment to the production that had to have immediate return to justify spending the hard-earned dollars. We implemented a mechanical fertilizer spreader in the field that made it a one-day job for one man versus a two-day job for five men. We purchased a boom sprayer for the field, which made it a one-man instead of a two-man job. Our nursery trailers we cut down and narrowed to fit inside the greenhouse doors, allowing us to drive into the greenhouse to off-load. There were small mechanizations being implemented to save money, but we knew that there was so much more efficiency to be had.

I’ve always asked my staff, “What do we spend the most dollars on?” Reply: “Harvest, grading the field-grown seedlings, soil mixing and flat filling for container production, hand-planting seeds, sticking rooted cuttings, transporting product from point A to point B, and back to point A. Last but not least, table-grading in the greenhouses...” Yes, table-grading container seedlings, that antique process my grandfather used in the 60s and 70s.
 

Make the move

Fast forward to this year. Production numbers are easing toward pre-recession levels, but percentage-wise, the increased price of materials and labor has out-paced the profit margins of our products. We are all making less money than we were 15 years ago. The only way to increase margin at this point is adapting our system to do more work in less time, with fewer personnel, through the use of automation. Right now, overhead costs are as low as they are ever going to be, availability of labor is decreasing, and margins will continue to decrease if we don’t combat this equation with better automation. Now is the time to invest in your company.

This year, with the help of our efficiency expert Joe Kuppilas in truly gut-wrenching reality, we realized what little distance we had come and how far we could go to mechanize our production. We purchased a custom-built flat filler that was larger, faster and more efficient than our previous flat filler. It cost $12,000 in comparison to our old one at $5,000. We quickly realized that it required half of the personnel to operate, and the speed of production was double. It was clear that we paid for the machine in one season. Next year and every year following, we will add that $12,000 in savings to our margin, all the while keeping us viable and profitable.

In addition to the flat filler, we are adding the complete mosaic of equipment to our container seedling production. Our soil will automatically mix our custom soil blend recipes and drop it into the flat filler. And when the flat comes off the belt, we will have a fully planted, top-dressed and watered flat of seedlings ready to be put in the greenhouse that will not be touched until grading season. This one process will reduce our labor on planting up to 50 percent.

When crunching numbers this past summer, we roughly figured JLPN spends $60,000 a year on the antique, hand-grading process that we have done for 15 years. Cue the feelings of financial nausea. This next season, the process will be automated by electric motor-driven belts, similar to our bare root seedling grading done in the winter. The speed of the belt, not the speed of a person, will dictate the pace of production.

When looking back on all of the years we could have been saving those dollars, the capital output to implement this process in conjunction with the dollars it will instantly save, will be truly nauseating. JLPN will continue to implement labor- and time-saving equipment because it pays off.  

When estimating the future savings, we plan on paying for all equipment, including the building where it is housed, within two growing seasons. That’s a 50 percent savings in overall production cost, while also requiring up to 50 percent fewer personnel on certain processes in an ever-changing, shrinking and under-staffed market.
 

Justifying the cost

Not all nurseries are the same in size, volume, growing format and product, so how do you justify the cost? You justify the cost to the scale of your operation. If it’s saving you time, it’s saving you money. Maybe you don’t need a large soil mixing system because it would take 15 years to pay off. Any process done by a machine or through efficient movements throughout the nursery is going to save money. Mechanizing your nursery process at any level is going to pay off.

Some of the best ideas we have had came from other companies’ automation in a completely different setting. Other growers, farmers and facilities might have equipment that they use currently or have outgrown, but it might work famously in your nursery to save you time. Those are positive changes in your system.

Not all tweaks, fixes or processes are going to be winners. Many times we had bright ideas and mechanical bandages that saved a little time here and there. Now, most of those ideas are dusty decorative-relics around the nursery waiting for the scrap yard. To believe that we are efficiency experts would be like trying to have my CPA grow my trees. There’s a reason I pay a professional for their services — they are pros at what they do. Finding the right person to look at your process can be highly valuable in the short and long term.
 

What’s up next

The next few years are going to be some of the best potential years to make money in the nursery industry. Cost of labor and goods will continue to go up and margins will continue to shrink as price will more than likely never keep up with the pace of inflation. Excess capital for re-investment and profit margins have been scarce for several years, making it hard to let go of those hard-earned dollars. However, in many cases, the next three years are going to have more labor available industry-wide than the following three years. This translates into now is a company’s best opportunity to create a large crop that will create the dollars to pay for cost saving equipment, which ultimately will keep your company profitable.

The time for automation in even the smallest forms was yesterday. Unfortunately, during the recession, most of us were fixated on trying to financially stay afloat, and creativity and mechanization were as effective as making a call from a rotary-dialed phone in the back seat with no seat belt. In my opinion, companies who are not able to mechanize in time to increase or maintain profitability could be on the slow path to becoming financially unviable. Now is a great time to talk to people in and around your business to discover new systems and equipment to save time and labor.

John Lewis is owner of JLPN Inc., who grows a full line of container seedlings and rooted cuttings in Salem, Ore. For more information, visit www.jlpnliners.com.