5 Ways Greenhouse Growers Can Cut Costs with an ERP System
March 14, 2025 Every business leader wants to cut costs without compromising quality. The go-to fix is often do things faster, but speed alone won’t cut it. There’s more to the story.
Speed means getting tasks done with less wasted time, effort, or resources — optimizing processes for efficiency. Smarts mean making sharp decisions, picking the right strategies, and hitting the mark — focusing on effectiveness. Speed without smarts can lead to sloppy mistakes and wasted effort. Smarts without speed can mean delays and missed chances. Put them together, though, and you’ve got a winning formula:
Faster (Efficiency) + Smarter (Effectiveness) = Maximum Productivity = Minimal costs
For your greenhouse, cutting costs comes down to doing the right things quickly. That’s where modern-day ERP (Enterprise Resource Planning) steps in. It connects finance, sales, planning, operations, and other key processes. Here’s how ERP can help in five big areas of your business.
Cut Costs? Start With Better Decision Making
Working smarter starts with better insights and decision-making. Data-driven decision-making is a buzzword for a reason — it works. It’s simple: with better, more accurate information available earlier, you naturally make better choices. The question of where to cut costs first also gets answered with precise insights. An ERP system hands you real-time, accurate data to spot where costs are bleeding and how to stop it. That’s why investing in ERP is a smart move if you want to reduce costs.
Key insights you need for robust decision making:
- Pinpoint product costs down to every component, with clear margins
- Track sales performance live — by region, product group, or past periods — to find underperformers
- Compare production lead times, scrap, labor, and quality to optimize recipes and cut waste
- Monitor crop performance and efficiency in real time to eliminate guesswork
- See your full financial picture — WIP, inventory value, receivables, payables, fixed assets — to target savings.
Inventory: What’s the Right Level?
As a grower, you manage a lot of inventory: living materials and inputs for production and assembly. Keeping inventory at the right level is the most cost-effective approach, but what is the right level? To answer that, you need accurate insights into projected demand, supply, and current inventory. For plant materials, it’s critical to account for expected waste, precise growth times, and holding periods to determine when plants are ready to sell. An ERP system provides all these insights, enabling you to make faster, better decisions.
Ways to improve inventory management:
- Equip your sales team with real-time availability data to close deals fast and avoid overpromising.
- Plan production with precision, using hard data to minimize waste and scrap.
- Adjust schedules on the fly to match demand forecasts and avoid overproduction.
- Update inventory levels instantly at every step for early risk detection.
- Automate reordering to keep stock lean — no shortages.
Labor: Lower Costs, Work Smarter
Labor is scarce today, and it’s one of your biggest costs. To get more cost-effective, labor deserves full attention. Traditionally, we push people to work harder — measuring performance employee by employee, often at the expense of quality. But with an ERP system, you can work way more intelligently, doing more with less effort and cutting costs in the process.
Some examples of doing things smarter and faster:
- Use advanced resource planning to balance workloads and maximize your crew’s output.
- Track team performance to fine-tune planning with precise labor benchmarks.
- Integrate your planning with greenhouse automation to easily execute your planning with less people.
- Capture quality of work next to performance and make this visible, to reduce hidden costs due to quality issues.
- Automate with today’s AI capabilities repetitive tasks like sales or finance data entry and reporting to free up your people
Space Utilization: Squeeze Costs Out of Every Inch
No grower operates without space utilization planning. Making optimal use of space is key to cost-effective operations. Every section must eighter be completely filled (optimal use) or be completely empty (energy savings). A green ERP system helps you plan space utilization as part of your production plan. Graphical tools like floorplans and Gantt charts visualize allocated and free space over time. The most advanced systems even handle smart or bulk allocation and restrictions based on climate or crop needs.
Some examples of doing things smarter and faster:
- View the space impact of a production plan at a glance and test scenarios to optimize utilization.
- Register actual inventory with easy-to-use apps for real-time insight into greenhouse stock by location.
- Capture actual space consumption to allocate indirect costs like heating, rent, and overhead.
Supply Chain and Distribution: Cut Overhead, Move Faster
Paperwork and inefficiencies inflate supply chain costs. Digital or not — emails, texts — it’s still very unstructured and inefficient. There’s room to improve. Seamless digital integration with your ERP and supply chain can cut human handling costs. Plus, optimizing loads and shipments reduces transportation expenses.
Some examples of doing things smarter and faster:
- Receive all sales orders digitally via EDI or e-commerce to cut handling costs.
- Use modern tech (like AI copilots) to convert email orders into system-ready sales orders instantly.
- Auto-accept sales orders based on accurate available-to-promise data.
- Reduce transportation costs with smarter route planning and load optimization.
- Create optimal internal pick routes to work more efficiently.
The Bottom line: Cut Costs with Total Connectivity
Modern AI-ready ERP systems, with Copilots (digital assistants), simplify workflows, automate routine tasks, and guide workers with AI-tutorials, and helps workers get things done — without relying so much on skilled labor.
Beyond labor, the benefits stack up: smarter decision-making, leaner inventory, optimized space, and a tighter supply chain, all driving down costs.
This isn’t about working harder — it’s about leveraging the right technology to eliminate waste, save time, and boost your margins. The first step to take today is checking if your system can connect all information, because that’s where real cost-cutting begins. Without this total connectivity, you’re stuck managing silos and bleeding money from gaps a unified system would close.
Editor’s note: This article was originally published on GreenhouseGrower.com, our sister brand.