4 Keys to Profitable Inventory Management for Cannabis Growers and Processors

Profitable operations for cannabis growers and processors start with gaining real-time visibility into production and inventory.

Sara Silver

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    The keys to profitable operations for cannabis growers and producers start with gaining real-time visibility into production and inventory. This helps managers make decisions on how to streamline the end-to-end process of fulfilling customer orders. It’s just as critical to document product testing and the monitoring of waste to comply with state regulations.

    If you track data in these areas accurately, you will know how much product you must sell. And the information you collect allows you to evaluate all your processes—from cultivation to testing, production and fulfillment. When you have access to real-time data—you not only know what’s happening right now but also what to expect next week and next month.

    In this blog, we examine four keys to profitable cannabis operations. We also present how SilverLeaf Cannabis ERP—powered by Microsoft Dynamics 365 Business Central—provides a user-friendly solution that’s built to tackle the unique challenges growers and processors face.

    Key #1 – Streamline Quality Testing

    Working with controlled substances and producing consumable items requires accurate record-keeping of material and product testing. While testing slows down production, it’s required by state regulations; the key is to streamline testing and record-keeping to minimize delays as much as possible.

    SilverLeaf helps you solve this challenge by allowing you to assign testing to the different steps in your production process and capture information, such as the temperature of raw materials, the calibration of machines, and the potency of final products. You can also track state-mandated data for certificates of analysis such as the presence of pesticides, heavy metals, and solvents.

    Key #2 – Monitor Waste Destruction

    When producing edible products, not everything from the liquid vat makes it into the food molds. You’re left with unusable material. However, it’s a controlled substance that may contain THC or other cannabinoids that you need to track by qualifying and quantifying the destruction. That makes destruction documentation critical for cannabis cultivators.

    SilverLeaf takes on this challenge and enables you to meet compliance requirements by allowing you to track the source of cannabis material up to the destruction point. The system also eliminates manual data tracking by automatically producing documentation that references the origin of where destroyed material came from.

    For raw materials, you can measure the percentage you destroy to determine which vendor’s materials perform best. Another key feature is the ability to identify production machines that don’t work efficiently. For example, you might load 50 pounds of material into a vat and discover it yields 40 pounds of crude distillate due to material sticking to the cylinders—you end up throwing away 20% of the material. The more material you don’t have to destroy helps you increase the production of your manufacturing processes.

    Key #3 – Increase Production

    Managing cannabis production goes beyond determining how many of each type of plant to grow. You also need to determine where to grow plants and where to maintain them once they flower.

    SilverLeaf lets you record and analyze plant production orders and see your cultivation capacity as well as the products you produce by strain, location, and time of year. This gives you a true production plan you can act upon to determine your labor needs and to see the quantity and the week you will receive each plant strain.

    Comparing this information to the sales forecast tells you what you need to buy or grow. You then know what you need to produce, and you can see what’s scheduled to be produced and the resources you need (machines and people) to convert the material into finished products—so you can set the production schedule.

    Key #4 – Optimize Inventory

    Cannabis growers and producers need perpetual, real-time visibility into exactly where inventory is and when inventory is supposed to arrive at specific locations. They also need the ability to drill down into inventory to see availability by various attributes.

    With the SilverLeaf inventory availability matrix, you can see what’s available by specific attributes—product line, strain, time of year, and day of the week. You can also drill into quantities that are available for specific customer groups or locations, which sales orders that availability is allocated to, and if any production orders will increase the availability.

    Both your sales and production teams can see what’s available now and, in the future, based on your planned production orders minus your sales orders. You might discover, for instance, that the quantity of one product is about to decrease by 250 based on open sales orders, but production also plans to deliver 600. Your net gain will be 350.

    Access to Data Enables Fast Decision-Making

    All four of these keys to profitable operations rely heavily on access to accurate data. That’s what enables your team to make fast decisions, reduce costs due to errors, and optimize processes to scale your business. SilverLeaf answers the call by streamlining operations with real-time reporting that increases the accuracy of available inventory, production, testing and waste to enable cannabis growers and processors to protect their bottom line.

    To learn more, check out part two of our four-part webinar series, Mastering Cannabis Operations: Personnel, Planning and Production. You will hear industry and technology experts discuss how leading cannabis producers are becoming more profitable and productive through technology that helps manage personnel, planning, and production.

    If you’d like to chat with someone about how your cannabis business can benefit from SilverLeaf, contact us today.


    Sara Silver

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