- The data you already have can help you earn more by:
- making the most profitable products
- increasing production yields
- incentivizing your salespeople
- improving your team’s efficiency
- Start by picking one area of opportunity to improve
- Create a simple metric or report that is directly actionable
Use your manufacturing data to make more and earn more
Manufacturing cannabis products, from edibles to concentrates to topicals, is a complicated and nuanced business. The slightest variation in machine settings or operator protocols can have drastic impacts on product yield, consistency, and quality. The good news is that you’re already collecting some, or all, of the data that you need to improve your products and your business! All you need is a master key to unlock your data and put it to work for you.
Most marijuana-infused product creators want to make the most amount of product with the least amount of raw materials, without sacrificing on consistency and quality. Manufacturers that have been creating products for some time often do well with their past experience and intuition, but with the market becoming increasingly saturated with up and coming products, there is a constant indeed to innovate and improve.
Seeing your manufacturing data in an intuitive and efficient format can be a powerful tool to protect product safety and quality while improving production yields and reducing operating costs. Here are just a few questions that your data can help you answer so you can increase your profits by making more of the right products.
1. What are the best categories & products for me to make?
Your “best products” can vary depending on what you’re trying to accomplish. Some products may have a relatively quick & easy creation process, which means you can make a lot in a short period of time with a relatively low overhead cost. These “easy” products are great for marketing and sales efforts to get in the door with more retailers. Other products may have a lot of demand but may be difficult or time-consuming to manufacture, which suggests a focus on improving production efficiency or being thoughtful about pricing strategy. Other products still may be very new or innovative, which suggests they are good for differentiating your brand but may require some consumer education. All of these considerations ultimately inform your profitability for each product SKU that you create.
The first step to take is to have a clear understanding of your overall, regional, and store-level demand and pricing for each of your product SKUs. Then it’s important to overlay your supply chain so you known the time, materials, and cost associated with creating each of your products. These two elements alone can provide potent insight around how to improve what products you’re making or how you sell them. You may even find that you should stop making some products altogether and focus your efforts where you have the greatest profitability.
Although it can be important to have a good product assortment, you can stand to lose a lot of money and time by focusing on the wrong products or making too many kinds of products. Matching your production and sales needs with your data can help focus your team and improve yields and profitability.
2. What are my yields for each product by machine, operator, or facility?
One basic understanding is that greater manufacturing yield means more product and more profit. This can be a function of your “utilization”, or how much time your machines or people are making product. If your workspace is set up so machines or people are spending a lot of time idle, that can negatively impact your production yields. Your yield can also be a function of your “efficiency”, or how quickly your machines or teams can create your products. Even if everything is working 24 hours per day, 7 days a week, if the process is poorly organized, slow, or otherwise inefficient then that will also negatively impact your output. This could be because of bottlenecks in your standard operating procedures (SOPs), how the workspace is laid out, or how your team is implementing the tasks at hand. So as you’re planning your current and future production cycles, it can be very important to tease out exactly what’s limiting or constraining your current operations to systematically remove roadblocks and improve your yields.
This becomes especially meaningful if you have multiple facilities making the same products. If there are any big gaps in production yield, that means you can make more and earn more by implementing best practices from your more successful locations or processes.
3. Who are my best salespeople and what are they doing right?
No matter how profitable, potent, or delicious your products, you always need talented salespeople to get your product into dispensaries and retail stores and, ultimately, into the hands of your consumers. Salespeople or distributors are often organized around regions and answer for geographical areas or sections of your product catalog. Most importantly, your sales teams are usually responsible for sales quotas to make sure they are selling profitable and sustainable quantities of products.
How do you set your sales quotas, and how does each of your sales representatives compare to their expectations? Who are your top 3 salespeople, and what products or types of retailers do they focus on? How can you extend those best practices to the rest of your sales team to sell the most product that you can create?
Using your data to set realistic goals and then hold your sales team accountable can drastically improve efficiency and profitability. If you can celebrate successes and improve your overall sales by learning from your best representatives, then you’re well on your path to mastering your business and your bottom line.
The answers for each of these three questions can be found in your spreadsheets, seed-to-sale, and accounting software where you’re already collecting a lot of valuable data. What other types of data are you already collecting?
What type of data is in my manufacturing facility?
Although each state in the US, and every country outside the US, has different regulations, nearly every manufacturer is collecting the following types of data:
- Cannabis input materials
- Yield & processing
- Laboratory testing
More sophisticated organizations are also tracking:
- Competitor’s products & pricing
- Supply & demand
- Spot pricing
- HR / Payroll
How do I get started unlocking my manufacturing data?
You have the products, the processes, and the people to grow your business – but where and how do you get started using your data?
The first, most important step is to clearly state what you’re trying to achieve in plain English. For example, “Our company wants to improve our manufacturing yield on product X” or “Our senior management wants to increase the number of products we sell in each store.”
Once you’ve nailed down the core questions, hone in on data that you’re already collecting in your seed-to-sale, accounting, and other systems. Identify what specific information (reports, metrics, etc.) would help inform your decisions.
Then, pick your top priority to identify where you’d like to start. This is very important! The most successful businesses, teams, and data projects start off with a laser focus to start seeing quick returns. As your team gets more comfortable interpreting and using your data, you can move on to the next goal on your list to address.
Finally, get started using your data to improve your business! Make sure that your reports or metrics are simple and intuitive so that they decrease complexity and improve your clarity. The most important thing about data is what you can do with the information you receive. If the data you’re looking at doesn’t make sense, it’s not your fault! If your reporting isn’t actionable, it’s either the wrong data or it’s being presented in the wrong way.
If you’re still stuck, we offer a free data consultation to get you started on the right path. If you’re interested in the examples above, we have dedicated modules to help you work through each consideration. And you can always send us a note to chat about what’s on your mind.
Overall, data can be an incredible toolkit and ally in your quest to make the best cannabis concentrates, edibles, tinctures, topicals and other products.
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