The cannabis supply chain has always been fickle, with inherent challenges and intricacies unique to an evolving market. Complexities include the transportation of goods across state lines, alignment between state and federal legalization, and details surrounding taxation, testing and quality control.
Like all industries over the past year, the cannabis industry was not immune to the effects of the COVID-19 pandemic. A drop in global productivity created worldwide delays in production and shipping, which, in turn, affected pricing and availability. Combined, these challenges led to a general sense of unpredictability in the cannabis supply chain and likely created uncertainty in your organization.
While some factors – such as the global pandemic – may be out of your control, there are steps your cannabis company can take now to strengthen its resolve moving forward. Below, we highlight the ways your business can shore up your supply chain to ensure stability moving forward.
How to Shore Up Your Supply Chain
Building predictability into your supply chain is a pillar of business continuity. Successful cannabis companies do these three things to optimize their supply chain:
1. Have Alternate Suppliers
The supply chain has been evolving into more of a web-like format, where goods are sourced from multiple partners and suppliers. When the pandemic hit, businesses that had insight and visibility into their supply chains were able to uncover exactly which suppliers, sites and products were at risk of disruption and act accordingly. Cannabis companies who had alternate suppliers in place were able to put themselves first in line to secure constrained inventory. Alternate suppliers allow you to expand your route-to-market options in the event other suppliers are unable to deliver.
2. Diversify Supply Base
Supply chain disruption due to the pandemic has created shortages in essential supplies for cannabis cultivation and processing, including cultivation tools, ingredients for edible manufacturing and packaging materials. Cannabis companies that depended on packaging supplies like jars from China, for example, were forced to turn away new business at the start of the pandemic when factories in the country were closed to combat virus spread. Alternatively, those businesses with suppliers in various geographical locations have fared better than those dedicated to a specific territory.
3. Create Operational Flexibility
The past year has illustrated the value of operational agility. Businesses that were able to quickly adapt to changes in supply and consumer demand were better able to ride out the pandemic storm.
According to track-and-trace technology provider Metrc, cannabis licensees across the country were operating at rates never seen before as of May 2020. To adjust quickly and safely to booming consumer demand and newer, safer operational requirements, cannabis businesses need control and visibility to operate under increasingly difficult economic conditions. Being able to adapt to changing market conditions, especially with little notice, can help businesses make key decisions in critical moments that allow them to keep moving forward.
How ERP Software Can Help Reinforce Your Supply Chain
Enterprise Resource Planning (ERP) software built for the cannabis industry provides end-to-end visibility into the supply chain, giving users the ability to shift operations based on demand, supply and other market conditions. An ERP solution enables collaboration across the supply chain (from growers to vendors to suppliers and beyond) so that operations and communication are streamlined and efficient.
An ERP system like CannaBusiness ERP can:
- Reduce document handling errors and manual tasks
- Support GMP standards, reporting requirements and recall management
- Improve inventory management and better forecast demand
- Maintain supplier information to help organize approved alternatives
- Manage multi-site global operations
To learn how CannaBusiness ERP can help your business shore up its supply chain, reach out to us or check out our product tour.