The cannabis industry may still be the “wild wild west,” but the market is maturing, and industry best practices are beginning to emerge.
With growing competition and heavy regulations, cannabis cultivators, manufacturers, distributors, and retailers have been forced to evolve or perish. Most have faced or are aware of the challenges and trade-offs that affect their increasingly complex and competitive supply chains.
The easiest and most valuable way a cannabis business can increase profitability is with an optimized supply chain. The supply chain should stay lean, manage costs, and, most critically, respond instantaneously to fluctuations in demand.
While there is no single playbook to ensure success in the rapidly expanding and ever-changing industry of cannabis, here are five ways to optimize your cannabis supply chain.
5 Tips to Improve Your Cannabis Supply Chain
Understanding how your business operates is the only way to critically evaluate your processes. The best way to audit your supply chain is to have established process maps in the first place.
If a new employee walked into the office today and they had to do a task with no formal instruction, just documentation, could they complete it?
Keeping your own updated documentation that includes your companies’ best practices and operating procedures ensures that information is not forgotten. Additionally, information is accessible to all employees.
Even more, process maps allow you to analyze efficiencies and make necessary changes as your business expands.
Focus on Strengths
Many cannabis businesses spread themselves thin by trying to do too many things. Or, they take on business-critical compliance and financial activities on their own.
Most often, outsourcing business-critical tasks to specialized third-party providers produces a better value in the long term.
If you have a team of master cultivators with extensive strain knowledge, why devalue that asset by stretching their bandwidth into balancing books or loading distribution trucks?
Focusing on your organization and team member’s core competencies will help you grow your business.
Build a Responsive Supply Chain
Utilize source data from your inventory management system, POS, as well as industry information to identify trends and demand changes to enable your supply chain to respond rather than react.
This is critical to increase sales, reposition inventory, maximize customer/vendor satisfaction. Historical data and emerging trends will greatly help forecasting/planning to build a responsive supply chain.
Regularly Audit Your Business
It is business-critical to establish regular reviews to ensure efficiency and alleviate risk.
You should constantly be reviewing procedures and policies to ensure compliance, efficiency, and currency.
This will help avoid process bottlenecks or bloats and help streamline operations while mitigating the risk of theft, fraud, and non-compliance.
Upgrade to a Cannabis ERP
The idea of upgrading to an ERP spook some cannabis businesses. Nonetheless, the overwhelming benefits to profits and efficiencies offset the possible disruption and costs.
A true cannabis-specific ERP houses all your core business operations in a single solution. This allows your business to extensively reduce or eliminate manual processes, increase efficiencies, focus on growth, and ultimately optimize your supply chain.
The cannabis supply chain has become an increasingly complex ecosystem of people, processes, and technologies. Luckily, ERP software has been designed to fit the unique needs of the industry to bring everything together in a single, centralized system.