Leveraging ERP Technology for a Sustainable Cannabis Supply Chain
Being known as a sustainable cannabusiness can be a difference maker in this competitive industry. However, operators must realize sustainability is not just a buzz-word, but a business model that applies to the entire supply chain.
While many cannabis operators focus on facility design, packaging, and equipment, all of which are extremely important, they often overlook the low-hanging-fruit of operational efficiencies that come with leveraging dedicated software solutions.
Some of the largest gaps in sustainability are also the easiest to correct…if you know where to look. In most cases, inefficiencies within the supply chain go unnoticed due to a lack of visibility. Leveraging tools like enterprise resource planning (ERP) systems allow cannabusinesses to operate more sustainably, efficiently, and profitably.
While track and trace software is required for compliance and basic traceability, cannabis-specific ERP software consolidates all operational activity into a single solution. Because ERP systems deliver a complete, overarching view of company operations, it can reveal the opportunities for change that will have the strongest impact.
For cannabis cultivators, processors, and distributors, ERP enables operators to achieve substantial changes, finding areas to reduce waste, improve inventory management, and supply chain optimization.
Waste Reduction
Often compliance requirements can inhibit sustainability efforts. But, when cannabis operators have better technology in place for predicting usage and tracking supply chain activities, they can reduce the amount unnecessary of waste produced. With better visibility, operators can easily determine what areas need improvement by auditing the supply chain process from start to finish.
It’s likely that issues will show up in areas of over-production or the over-purchasing of materials, which can often be attributed to errors around forecasting. Luckily, ERP software eliminates the need to make business-critical decisions around “gut feelings”.
ERP systems allow operators to easily track materials on hand, demand forecast, practice lean manufacturing. Leveraging the data in the system, operators can strive to eliminate:
Overproduction of products that aren’t ready to sell
Delays that result in bottlenecks or additional waste
Unutilized materials and products that are sitting in the warehouse
Insufficient workplace layouts that causes too much time moving around
Defects resulting from poor quality control
ERP enables cannabis operators to prioritize lean manufacturing -streamlining quality, maximizing efficiencies, and reducing costs to significantly minimize waste for a more sustainable operation.
Agile Inventory Management
The goal of maximizing sustainability really comes down to being truly agile. Implementing business management technologies that can support a responsive supply chain is critical to reducing your carbon footprint.
Cross Organization Visibility
A well-integrated ERP system provides insight from the finance department to the warehouse, the cultivation rooms to the dispensary floor. Regardless of your operation type, having a single source of truth across the entire organization exposes any gaps in the supply chain.Flexible Production Scheduling
The signature of an agile operator is the ability to switch gears quickly, shortening or lengthening the run or even changing products, as necessary. An ERP application makes it easier for organizations to adopt this type of flexibility by providing scheduling strategies to handle unexpected orders or order changes through features such as capacity planning, work order management, and materials requirements planning.
Automation Capabilities
The ability to automate processes is invaluable to sustainability. Manual processes introduce errors and duplications that interfere with the agility of operation. Automating order replenishments or work orders based on demand forecasting ensures a truly lean, sustainable process.
An ERP solution improves the accuracy of demand forecasting and ensures that the cost of inventory is minimized throughout the entirety of the supply chain. A lean inventory is essential to address just-in-time production method to reduce the cost of production and keep the supply chain flexible.
Supply Chain Optimization
The impact of ERP on supply chain management can be significant when attempting to manage a more sustainable operation. Leveraging technology that has been around for decades, but tailored to the nuances of the cannabis industry is driving better business practices and ultimately resulting in a more efficient and sustainable supply chain.
Demand and Planning
An ERP system can automatically create demand when orders are received. ERP streamlines supply chain management by creating effective job scheduling. As a result, there is full visibility in real time of what resources are being consumed and which resources are used. ERP ensures that production policies are consistent with demand, replenishment is done at the right time, and inventory is lean.
Procurement
An ERP offers more effective ways to manage the procurement and supply of goods, services, and other resources across the chain. From handling manufacturing and warehouse resources to managing transportation and execution processes, ERP takes care of all elements within the supply chain. Manual, time consuming, and error prone tasks can easily be automated.
Production
ERP systems enable the creation of bill of material (BOM) for each item. After production starts, all records for machine and labor resources are created and updated in real time. All activity is recorded through the ERP system for proper supply chain management, eliminating errors, increasing efficiencies, and reducing your carbon footprint.
Moving beyond manual spreadsheets and outdated legacy systems will empower cannabusinesses with make actionable change in the time of digital transformation. With the right technology, cannabis companies can reduce inefficiencies and achieve sustainability goals with little to no additional effort.
An environmentally conscious company is dedicated to streamlining operations for efficiency and driving the push for improved processes in the supply chain. Leveraging the latest in ERP technology allows business leaders to be a force of change in the industry. By leveraging ERP technology, companies can quickly and easily begin adopting sustainable manufacturing practices and participate as a true ally to the environment.
