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OM in the News: Valentine’s Day and the Rose Supply Chain

February 15, 2015

rosesValentine’s Day is the one day when a red rose is worth 2-3 times more than any other time of the year. The process of getting the roses to market is fraught with risk, middlemen, crazy expense and bad weather. Americans will buy 200,000,000 this Valentine’s Day. It’s a logistical challenge getting these millions of roses to bloom and arrive at the same time.

NPR (Feb. 13, 2015) interviewed Jan Ooms, the owner of Roses and Blooms, a flower shop in Manhattan. NPR: “How much is a dozen roses on February 14?” Ooms: “$80.” NPR: “How much is it on February 15?” Ooms: “$48.” NPR: “That’s almost double.” Ooms: “Yes. If we make a big mistake with Valentine’s Day, it would us cost so much that we would not be able to make it back the rest of the year.

Planning started in November. Ooms figured he could sell 25,000 roses. He called his Ecuador farm supplier every week because the problem with roses is things can go bad very quickly. NPR traveled to Ecuador to continue the interview. Farm owner Juan Torrey was worried: “I’m not sure that the roses will bloom in time. It depends a lot on the weather. It’s a matter of timing. You want to harvest a rose when the bud is perfect. But you also have to harvest before February 6 to get the rose shipped off for Valentine’s Day. There’s not much wiggle room.”  In 2010, there was a warm winter and the roses opened a week early. Torrey sold what he could at less than half price and threw the rest away. This year, Torrey has the opposite problem. The weather is chilly, and the buds aren’t open enough. Workers run along the sides of the greenhouse, rolling down plastic walls to keep the flowers warmer.

Fast forward to Valentine’s day. It’s 6:30 A.M. and Ooms is at his shop to meet his roses. They arrived at JFK at 2 A.M. NPR: “Do you get nervous before you open up the boxes?” Although Ooms has solved all the logistical hurdles, he still doesn’t know what the flowers look like. Did they wilt? Did they freeze? Were they ripped apart by customs agents looking for drugs? Ooms: “They look good. They look really, really good. So I’m a happy guy.”

Classroom discussion questions:
1. How is the flower supply chain different from typical manufacturing supply chains?

2. Describe the rose supply chain.

 

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