Industry experts said on the third (and last) day of the MJBizConNEXT Direct virtual meeting of the Marijuana Business Daily on Wednesday that cannabis companies that depend on international supply chains need to remain vigilant to avoid too fragmented business.
The cannabis industry has been disrupted by the coronavirus pandemic, disrupting the global supply chain, but some companies that rely on overseas products perform better than others.
“People in the cannabis industry run their supply chain too lean,” said Beau Whitney, chief economist and director of Oregon-based Whitney Economics.
Those comments came during a panel discussion titled, “Critical Planning: Building the Resilience of Your Supply Chain.”
“If you’re expediting everything, you’re expediting nothing,” Whitney said.
These comments made during a panel discussion on the topic “Critical Planning: Building the Resilience of Your Supply Chain.”
Arnaud Dumas de Rauly, co-founder and CEO of The Blinc Group, a New York-based vape manufacturer, agreed that scrambling “is the worst case.”
He explained that maritime costs account for 5% of product costs, while air freight costs account for 10-11% of product costs. This is “a huge difference and will have a huge financial impact.”
De Rauly said that cannabis companies need to use data to identify and resolve delays throughout the supply chain.
“Even data as basic as time of departure and time of arrival” – if you have that for six months – can help a business evaluate its product timetables.
Whitney recommends that cannabis companies have at least one month’s buffer time for certain products and agree that it is essential to know the lead time of shipment.
“Understanding your suppliers and the risks associated with them is really critical,” Whitney added.
He said that if you can save costs and simplify supply from billing materials, it will be the difference between success and failure.
This article is issued by Mjbizdaily.