The U.S. floriculture industry is becoming increasingly consolidated and globalized. Although total floriculture production increased from $3.83 billion (B) to $4.37 B in the United States between 2009 and 2015 (USDA, 2010, 2016), the number of producers in the top 15 states decreased from 6457 to 5913 during the same period. The top 10 global producers of ornamental plant cuttings produced more than 4 billion cuttings in 2014, and many operations were located in Africa and Latin America to exploit low labor costs for export to Europe and North America (Drotleff, 2014).
The production process in propagation greenhouses in Europe and North America includes inspecting and organizing unrooted cuttings (typically received from offshore locations that have lower labor costs for harvesting cuttings), filling trays with substrate, inserting cuttings into the substrate (“transplanting”), moving assembled trays with cuttings to the propagation area, growing the roots and shoots of cuttings, and shipping rooted cuttings to customers (Fig. 1). These large, multitiered companies require highly efficient processes, trained staff, and lean manufacturing processes to consistently produce high-quality plant products and remain competitive in an increasingly global market. Lean manufacturing is an approach that focuses on cost reduction by eliminating non–value-added activities (Abdulmalek and Rajgopal, 2006), which is relevant to the factory-like production of transplants in large-scale, specialized greenhouse facilities. Although there is limited labor-related information available for the greenhouse industry, ≈25.4% of all tasks in these large greenhouse operations have been estimated to be performed with some kind of mechanization or automation (Posadas, 2012).
With increasing competition in the greenhouse production of floriculture crops, it is becoming important for growers to increase production efficiency and minimize waste of resources including labor, production space, and materials (Fisher et al., 2016). As a result, benchmarking within and across greenhouse firms is a valuable tool to evaluate efficiency. Business benchmarking establishes specific measures for a business to compare performance with other similar businesses in the industry (Uva and Richards, 2002). Comparison of a business to industry benchmark performance can assist in evaluating company strengths and weaknesses to capitalize on its competitive advantages (Hall and Hodges, 2010).
The objectives of this project were to benchmark labor productivity of transplanting cuttings at young plant greenhouse operations and to identify key factors that differentiated between labor efficiency at surveyed firms. A survey was conducted with 14 young plant greenhouse operations, and data were collected on production cost in the peak season (the week when the most cuttings were transplanted) during 2016. The survey population was a subsample of the ≈109 producers of annual bedding and garden plants with more than $100,000 in sales in the 15 major floriculture-producing states in the United States (USDA, 2016).
Abdulmalek, F. & Rajgopal, J. 2006 Analyzing the benefits of lean manufacturing and value stream mapping via simulation: A process sector case study Intl. J. Prod. Econ. 107 223 236
Bartel, A. 1989 Formal employee training programs and their impact on labor productivity: Evidence from a human resource survey. National Bureau of Economic Research (Cambridge, MA) Working Paper No. 3026
Drotleff, L. 2014 Top cuttings producers reveal offshore production is expanding. Greenhouse Grower. 8 Mar. 2018. <http://www.greenhousegrower.com/management/top-cuttings-producers-reveal-offshore-production-is-expanding/>
Drotleff, L. 2016 The top young plant growers, and four critical challenges facing them. Greenhouse Grower. 8 Mar. 2018. <http://www.greenhousegrower.com/management/the-top-young-plant-growers-and-four-critical-challenges-facing-them/>
Drotleff, L. 2017a 2017 greenhouse grower top 100 growers: The complete list, and more. Greenhouse Grower. 8 Mar. 2018. <http://www.greenhousegrower.com/management/2017-greenhouse-grower-top-100-growers-the-complete-list-and-more/>
Drotleff, L. 2017b The Top 100 growers are investing in more technology to offset labor shortages. Greenhouse Grower. 8 Mar. 2018. <http://www.greenhousegrower.com/management/the-top-100-growers-are-investing-in-more-technology-to-offset-labor-shortages/>
Economic Policy Institute 2016 State of working America data library, wages by education. Washington, D.C. 25 June 2018. <https://www.epi.org/data/#cpsorg>
Gendreau, K. 2015 Assessing a location’s workforce. Global Consulting Group, Cushman & Wakefield. 8 Mar. 2018. <http://www.areadevelopment.com/labor-costs/workforce-q1-2015/assessing-a-locations-labor-market-suitability-300836.shtml>
Posadas, B. 2012 Economic impacts of mechanization or automation on horticulture production firms sales, employment, and workers’ earnings, safety, and retention HortTechnology 22 388 401
U.S. Department of Agriculture (USDA) 2010 Floriculture crops 2009 summary. National Agricultural Statistics Services Report, Washington, D.C
U.S. Department of Agriculture 2016 Floriculture crops 2015 summary. National Agricultural Statistics Services Report, Washington, D.C
U.S. Department of Labor (USDOL) 2016a 2016 adverse effect wage rates. Employment and Training Administration, Washington, D.C
U.S. Department of Labor 2016b Employment of farmworkers and laborers, crop, nursery, and greenhouse by state for 2016. Occupational Employment Statistics, Washington, D.C
U.S. Department of Labor 2016c Unemployment rates for metropolitan areas for 2016, not seasonally adjusted. Local Area Unemployment Statistics. Washington, D.C
Uva, W. & Richards, S. 2002 New York greenhouse business summary and financial analysis. Cornell University, Ithaca, NY
Yarasi, P. 2011 Productivity improvement of a manual assembly line. Texas A&M Univ., Texas, Master’s Thesis