Human capital and workflow design decisions play leading roles in throughput optimization for cannabis industry clientele
If understaffed is underserved, and overstaffed is a financial liability, how can the right balance be achieved to mitigate the loss of underproduction and opportunity cost of misallocated capital?
Human Resources Bottleneck
HR/OD and Supply Chain Consultant, Ryan Guzall, asserts that, "just-in-time methodology applied to services supply chains provides one answer." Generally relegated to solid line manufacturing common to automotive and CPG industries, Lean Kaizen principles adopted to the human resources function permits roles for which a full-time employee may not be required to be filled by "the right person, in the right place, at the right time, with the right set of skills," he states.
"Just-in-time methodology applied to services supply chains provides...the right person, in the right place, at the right time, with the right set of skills[.]" - Ryan Guzall
This model modifies the "contract-to-hire," or "temp-to-hire" process, allowing for substantially more scheduling flexibility for businesses in need of ad hoc talent. "The challenge is pairing supply with demand, exactly, as an unemployed staff member, or understaffed client can damage brand equity and goodwill for multiple parties," Guzall establishes. However, the value on-demand talent can bring to an organization seeking to accomplish task-level functions becomes significant as industry-wide cost-based competition increases. "In 2018 Canada, there was a glut of demand, but low total regulated supply. Today, you see the opposite; the Canadian market is trending toward consolidation as a result of an overabundance of production capacity, and owners are seeking ways to improve their bottom lines to remain competitive, or become more attractive acquisition targets." This external trend is one to watch as the regulatory atmosphere in the United States continues to shift toward federal deregulation.
Workflow Design improves Internal Value Chain
Production processes are subject to factory physics - resource allocation, work in process, arrival times, batch v. continual processes decisions, and inherent variability all impact ability to predictably produce. However, if the unit-level objective is simplified to batch processing as much material as is possible in the shortest time, controlling for the skill required to produce, preprocessing and environmental factors create most business process friction.
Process loss is the constraint holding your production team back from achieving its goals.
Measurable Results impact Bottom Line
The Orion Abbey Consulting Network staff has worked with small to full-scale grows, on massive outdoor farms of 15,000+ plants to those indoor, in aseptic conditions. However, a key constant is true for all: controlling process loss means controlling cost.
So, how much can a minor improvements make?
At a new grow in Michigan, staff consultants spent one on site, analyzing workflows for a mid-sized client, and one additional processing data, and presenting a recommendation for improvement. The implemented change cut process loss during final manicure by more than 40%, increasing throughput by similar figure. Minor adjustments resulted in faster production of salable product, and when wholesale market prices hovered at $3,000 per pound, it meant an improvement of $270,000 in top-line revenue potential for a client producing just 360 lbs. per year during expansion.