Optimizing Inventory Management & Supply Chain Best Practices
Effective inventory management and a streamlined supply chain are crucial for the success of any cannabis business. By implementing best practices in these areas, companies can ensure product availability, maintain quality, and enhance overall operational efficiency. Here’s a comprehensive guide to inventory management and supply chain best practices that can help elevate your business performance.
General Cannabis Retail Best Practices
Stock Level Guidelines
Maintaining optimal stock levels is vital for avoiding both overstock and stockouts. Here’s a quick reference:
Good Stock Level: 30 - 59 days left of stock
Back Stock Level: 39 - 18 days left of stock
Critical Stock Level: 17 days left of stock
Inventory Management Tools
Utilize a suite of tools to manage and streamline operations effectively:
Customer Relationship Management: Salesforce
Central Messaging System: Slack
HR Management Software: Gusto
State-Administered Cannabis Tracking System: Metrc & BioTrack
Best Practices For: Cannabis Retail Inventory Management
Uniform Intake Process
Establish a consistent intake process across all product categories to ensure efficiency and accuracy. Implement methodologies like FIFO (First-In, First-Out) to manage product shelf-life and avoid expiration issues.
Controlled Inventory Access
Limit inventory access to essential personnel to maintain control and security. This helps in preventing unauthorized handling and potential losses.
Best Practices For: Measuring Brand Performance
Key Metrics to Track:
Revenue: Monitor the financial performance of your products.
GMV (Gross Merchandise Value) & Spread: Evaluate monthly performance
Inventory Availability: Ensure products are in stock and ready for sale.
Quality: Assess product quality and customer satisfaction.
Customer & Stock Returns: Track returns to gauge product performance.
Brand Engagement: Measure vendor support, budtender education, and marketing efforts.
Best Practices For: Sourcing Cannabis Products
Sourcing Criteria
When sourcing products, consider:
Basic Information: Brand/Farm Name, product description, strain classes, and performance.
Visual & Olfactory Attributes: Appearance, smell, and color.
Product Qualities: Freshness, uniqueness, production yield, and pricing.
Grow Styles: Indoor vs. outdoor, soil vs. hydro, etc.
Brand Reputation: Feedback from buyers and budtenders, reorder consistency, and growth
Best Practices For: Product Intake at Cannabis Dispensaries
Criteria for Accepting Flower
Ensure the flower meets specific criteria including grow style, THC potency, appearance, and absence of abnormalities.
Receiving Inventory
Upon product arrival:
Confirm products match compliance manifests and verify labeling.
Check quantity and packaging for damage.
Record essential information into your POS or ERP system in real-time.
Quality Control
Implement a Quality Control SOP tailored to your business to ensure products meet standards before entering inventory.
Weighing & Measuring
For flower deliveries, weigh products on a state-certified scale and record weights in your ERP or POS. Ensure proper tagging with Metrc or other compliance systems.
Storage
Label containers properly and store inventory in suitable conditions to maintain product quality.
Best Practice for: Cannabis Inventory Audits at Dispensaries
Audit Objectives
Ensure compliance with regulations.
Verify inventory record accuracy.
Prevent damage and shrinkage.
Ensure proper labeling and packaging.
Planning and Conduction Audits
Define the audit scope and assign responsibilities.
Perform physical counts while inventory is frozen.
Reconcile counts with records and report findings.
End of Month Inventory Counts
Conduct counts on the last business day of each month.
Ensure no intake or fulfillment occurs during counts.
Verify inventory against your ERP or POS and compliance systems like Metrc.
Best Practices For: Addressing Aging Inventory
30 Days
Bundle products to optimize stock levels.
Prioritize high-demand items and address slow-moving products.
60 Days
Review sales data with vendors and consider marketing efforts to boost sales.
90 Days
Implement sales on near-expiration products.
Dispose of expired products in compliance with regulations.
Elevate Your Cannabis Operations with FlyWheel
By adhering to these inventory management and supply chain best practices, your cannabis business can achieve greater efficiency, accuracy, and product quality. Implementing uniform intake processes, utilizing advanced tools, and conducting thorough audits are essential steps towards optimizing your operations.
For an in-depth look at more best practices, tools, and processes to elevate your inventory management and supply chain operations, download our comprehensive Cannabis Inventory management Guide. Unlock the strategies that will drive your business success and ensure you stay ahead in this dynamic industry. Download the Cannabis Inventory Management Guide here.
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