CBD sales are on the rise, which has attracted the attention of the manufacturing industry. Ninety-one percent of manufacturers want to get into legal cannabis products, and the sector is expected to develop at a rate of 21% per year until 2028.
Increased competition in the market is raising the bar on industry norms for current CBD manufacturers. As legal cannabis sales revenue continues to grow, a new study sponsored by Aptean has shown that 48 percent want to boost automation across their organization in the next three years to address significant obstacles, improve customer happiness, and win market share.
What’s Stopping CBD Manufacturing from Expanding?
While consumer demand for Cannabis products has grown dramatically in the last 12 to 18 months, not every producer has indeed been able to take full advantage of this opportunity.
Two-thirds of manufacturing businesses have indeed been postponed or canceled customer’s orders due to not being able to fulfill rising demand, according to our new whitepaper, How Will Cannabis and Cannabidiol Manufacturers Drive Sector in 2022.
Three significant operational challenges have contributed to CBD manufacturers’ inability to meet escalating client expectations:
1. Instability In The Supply Chain.
Although the scenario is gradually improving, 89 percent of Cannabis producers are still facing longer than typical lead times.
This is good news because marijuana plants are sensitive, and any delay or interruption in the distribution chain can harm the quality and usability of raw components. Over the next 12 months, 67 percent of CBD manufacturers seek to improve overall supply chain visibility to speed up lead time recovery and avoid recurring issues.
2. Inventory Control Issues
Material instability has also caused problems in other industries, with four out of ten cannabis producers struggling to match their production schedules to component supply. While market dynamics have exacerbated the problem, the leading cause of stock management challenges is a lack of data integration, not the supply chain.
While old systems struggle to come to terms with the body of data and operational expectations on them as sales of medical cannabis products rise, 85 percent of CBD production companies agree their data is presently insufficiently scattered or siloed to make informed judgments.
This is reflected in manufacturers’ technology priorities: 86 percent are replacing unassimilable legacy technologies or strategies within the upcoming 12 months, while 78 percent are investing in procedure manufacturing ERP software or other similar solutions to help them better manage inventory levels.
Read more: Developing Your CBD Brand In The Proper Way
3. Skilled Worker Shortage.
Production is having trouble recruiting the next generation of workers needed to establish an innovative manufacturing facility, and Cannabis manufacturers have identified skill gaps as their top concern for 2022.
Cannabis manufacturing companies, on the other hand, feel that technology may help fill the gap between present and future skill sets, resulting in a more productive, valued workforce.
Sixty-six percent of the CBD companies we polled indicated they’d like to replace some job responsibilities with robots to reduce dangerous or monotonous work. In comparison, 100 percent of cannabis companies said investing in a digitized employee experience will help them retain employees.
How Can Cannabis Producers Use Technology to Address Key Industry Issues?
As we’ve already mentioned, CBD manufacturers are quickly learning that technology is critical to managing significant business hurdles, and market leaders are already investing in a unified approach for driving change and expansion. Eighty-eight percent of CBD producers believe technology will help them enhance their operating efficiency, and 81 percent want to use it to manage their profit margins better.
According to our data, 97 percent of cannabis producers already have a digital transformation strategy, representing the vital growth stage that many Cannabidiol companies have reached.
Most firms who replied to our survey were in the company for 6-20 years and generated $100-500 million in yearly revenue, indicating that scale-ups, not start-ups, are leading the medical cannabis manufacturing sector.
Many of these Cannabis manufacturing companies have gotten to the point where their legacy processes and systems can no longer handle the speed, complexity, and correctness of their current production needs. As a result, digitalization has become critical for gaining market share while preserving product quality and meeting customer expectations.
Future industry leaders will be distinguished by how they manage technology investment, with those who choose a comprehensive solution like processes manufacturing ERP software likely to reap the most benefits.
Investing in seed-to-sale technology for cannabis manufacturing can help them handle various problems by using real-time data insights to drive consistent actions. CBD producers will also be able to free up more resources for processes, research, and innovation by putting in place a digital infrastructure to facilitate more efficient performance.