Thursday, September 6, 2012

Challenges Faced by Seed Manufacturers

In the normal flow, seed manufacturers package and sell tens, perhaps even hundreds of millions of seeds during each season. These packages, in varying quantities, are sold to nurseries, gardening stores, landscapers, gardeners,perhaps even packaged for sale to home owners.

Amazingly enough, the seed industry largely remains one that conducts transactions by relying on estimated weights rather than exact numbers. Still, many seed purchases are made based on the number of seeds, rather than weight. The result of this inconsistency in measurable scales, typically results in a loss factor for the seed manufacturer. To offset the possibility of not supplying at least the numerical amount ordered, some seed manufacturers add an additional percentage for no additional charge.

• For large orders, the additional “give-away” amount can represent a loss factor of 2-3%, which translates to hundreds of thousands of dollars of inventory simply given away to customers because seed manufacturers lack the technology to accurately count their own stock.

• For smaller orders, where the quantities of seeds are smaller, the same overage may even account for a tolerance factor of up to 30%. In either case, for small orders or large ones, this is not a small loss factor.

Finally, because seed manufacturers provide extra seeds without charging because they are not counting the seeds, but rather approximating the count based on weight and then adding in a buffer to ensure the minimum order, the damage done to their profit margin is two-fold.
• First, they are giving away a product with value against no income.
• Second, if customers are reselling or planting the seeds based on an actual number that they can reliably verify, they can take full advantage of the seed manufacturer’s overage and purchase less seeds in future orders.

Thus the seed manufacturer is giving away free seeds in the first purchase and selling less seeds in the second and future purchases. Up until now, this has been a known factor resulting from a lack of technology that could successfully perform an accurate counting of vast quantities of seeds.

Seed Processing Industry Requirements

Seed manufacturers are tasked with processing hundreds of millions of seeds each season. Any solution that would involve verifying the exact number of seeds received from seed manufacturers would need to be:
  • Extremely accurate
  • Cost-effective
  • Fast and easy-to-integrate
  • Scalable to accurately count large and small quantities of seeds and be adaptable to small, medium, and large manufacturers
Easily integrated into current packaging infrastructure to maximize return on investment (ROI) and minimize integration cost or delays.

Until recently, a technology that could deliver these requirements was unavailable for the seed industry.

DATA Technologies has taken their existing technology and adapted it for the seed industry.
Unable to accurately count large quantities of seeds, current manufacturing principles include packing extra quantities of seeds per package to ensure that the buyer receives, at minimum, the proper amounts. Employing DATA’s counting solutions, seed manufacturers can accurately package the correct numbers, offering enormous cost-savings. DATA solutions quickly achieve payback within a period of several months up to two years (depending on the type of seeds and quantities processed).
Using the DATA counting solutions, there is immediate savings because companies can actually sell according to number and not weight and therefore can match their sales order with their packaging. Customers are still content to receive the number of seeds they purchased, while manufacturers are able to benefit from actually selling a much higher percentage of their seed stock. The DATA counting solutions are significantly more accurate, with no loss in speed. It can pack thousands of seeds per minute with an accuracy of 99.5-99.9%.

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