Procurement is a strategic function.
What are your thoughts on procurement’s role in the marijuana and industrial hemp industries?
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In an interview the other day I had the question: “what do you think are the greatest challenges related to effectively running a large scale grow?” I believe after having the appropriate infrastructure to allow long term success (irrigation and HVAC that are properly sized, workflow patterns and procedures minimize waste, etc), having appropriate systems in place to manage labor and resources is extremely important.
Effective procurement systems and teams are vital to a smoothly running cultivation operation. Having to delay a harvest because there isn’t enough Scissor Fix, or being unable to trellis a room due to a lack of stock is unacceptable.
Having a team, person, or system in place to keep an operation running smoothly as it grows is essential. Great question!
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Thanks @devjyarn.
Do you guys have your own in house personnel to do this or do you outsource the procurement function? If in house, what type of continuing education are these purchasing, buying or contract experts doing to stay abrupt how to apply the acquisition lifecycle to industry processes?
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Great question, Sandra. At this point I am looking for the right role for myself within the industry, so my answers are all speculative.
It would really depend on the size of operation. A craft style facility with 2000ft² of boutique flower has very different needs from one with acres of greenhouses aimed at extraction.
On the small scale, part of an employee’s weekly duties could be to update inventory records so the person responsible for procurement has the most up to date information.
With acres of canopy and hundreds of employees, procurement would need to be managed by a dedicated team, and ideally a scale-appropriate inventory management system.
The acquisition lifecycle depends on the size and efficiency of the operation. Maintaining effective communication at scale keeps procurement running smoothly.
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Procurement is one of the Key components of any SCM program. The CGB is especially dependent on Procurement as COGS are being driven ever downward.
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I’ll be the first to admit I’ll have to Google those acronyms to really understand your points, but I admire the level of level of competency and professionalism you’re brining to cannabis. Being able to connect business professionals, ag specialist and legacy growers is positive for everyone, and will move the industry forward very quickly.
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Thank you. In order to grow and move this industry forward, we have to apply the best practices from other industries that are proven to position and set your company up for success. I just want to teach everyone the importance of procurement, contracting and vendor management, it directly correlates with your bottom line and is currently a huge pain point in the industry. Once there is understanding, everything falls into place. Its too easy!!!
Sandra
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SCM = SUPPLY CHAIN MANAGEMENT
CGB = CANNABIS GROW BUSINESS
COGS = COST OF GOODS SOLD
Take a look at my website for some ideas and solutions
Doug
Greenmark Consulting
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