Six Sigma: Catalyst for Cannabusiness Operational Superstardom

Welcome back to another episode of Can Strategy elevating your cannabis business venture. Today, we're talking about something that might not be on your radar as a cannabis business owner or operator, but it should be. Today we're diving deep into the world of Six Sigma, and when it's needed in cannabis businesses, let's jump right in. Six Sigma is a powerful data-driven methodology for eliminating defects, waste or any obstacle that might prevent you from delivering quality products or services. If you're like most business owners, you're always looking for ways to streamline your operations, cut costs and boost efficiency. That's where Six Sigma comes in. It's a method for improving business processes and it's a total game changer. It takes a structured, scientific approach to problem solving. This means relying on hard data, statistical analysis and careful project management to bring about change. The project management is conducted by Six Sigma practitioners certified to execute this Six Sigma process.

In Six Sigma, there's a hierarchy akin to the belt colors and martial arts. They indicate a person's level of certification and, by extension, their experience and knowledge. Starting off, you have the yellow belts. These are folks who are aware of Six Sigma and may participate in projects, but their primary job function is outside of Six Sigma. Next we have green belts. These are the folks who work on small-scale projects within their functional areas. They're part-time Six Sigma practitioners, but they're pretty knowledgeable about the methodology and are capable of leading a project. Then there are the black belts, who are full-time project leaders. They've got a deep understanding of Six Sigma principles, techniques, tools and they lead major projects. At the top of the pyramid we have the master black belts. These folks are the champions of Six Sigma in an organization. They train and mentor black and green belts and they often oversee multiple projects at once.

If Six Sigma is so advanced that it has ranked levels of certification, what exactly is this Six Sigma process? Dm-8 is an acronym for the five distinct phases that make up the Six Sigma process Define, measure, analyze, improve and control. D is for define. This phase is all about identifying the problem you want to solve. It's critical to establish a clear goal and define the scope of your project. That includes defining who your customers are, their critical issues and your project objectives. A common tool used in this phase is a project charter, which helps to outline your project's purpose, scope and participants. M is for measure. Once you've defined the problem, it's time to collect data. The measure phase involves establishing critical measurements, developing a data collection plan and then collecting data to determine the baseline performance. This phase ensures you have quantifiable evidence that a problem exists. Tools commonly used here include data collection plans, statistical analysis software and process mapping.

A is for analyze. The analyze phase is about identifying the root cause of the problem. You'll use the data you've collected to find trends, patterns or anomalies. It's here you'll be looking for the reason the problem exists in the first place. Tools used in this phase include Pareto charts, scatter plots and root cause analysis. I is for improve. This is where the real problem solving occurs. In the improve phase, you'll use your analysis to design, test and implement a solution that addresses the root cause of your problem. You might use a variety of brainstorming techniques, simulation software or pilot runs to test your solutions and ensure they are viable.

C is for control. The final phase of DMAIC. Control is about maintaining the solution. You've solved the problem Great. Now you need to make sure it stays solved. You'll develop a control plan, monitor the process and make any necessary adjustments to maintain the improved performance. Control charts and other statistical process control tools are commonly used in this phase. The DMAIC process is iterative. Once you've reached the control phase. It's time to start back at the defined phase and find the next problem to solve.

The aim of Six Sigma is continuous improvement, always striving for near perfection. Six Sigma process can be utilized throughout the cannabis supply chain. A cultivator might notice that the yield per plant varies significantly and sets a goal to reduce this variability to ensure a more predictable and reliable harvest. The target could be to decrease the standard deviation of yield per plant by 20%, and Six Sigma could be used to meet that target. In a processing facility, 6th Sigma can help reduce waste and improve the efficiency of the extraction process. For example, a company might use DMAIC to decrease the amount of cannabis material needed to produce a certain amount of oil or to improve the consistency of its edible products. In a lab setting, 6th Sigma can help reduce errors and ensure greater accuracy in results. For instance, a lab could use DMAIC to improve the reliability of its cannabinoid testing, aiming to reduce the variability in test results for the same sample. A distribution company might use 6th Sigma to improve delivery times or reduce product damage during transport. The DMAIC process could help identify the root causes of delays or damage and implement solutions. At the retail level, dispensaries might use 6th Sigma to improve customer service. For example, a dispensary could use DMAIC to reduce wait times, aiming to increase customer satisfaction and loyalty.

Picture this your cannabis business is doing okay. You're keeping the lights on, you're meeting your goals, but there's a lingering feeling that things could be better, that there's untapped potential within your operation that you're not reaching. That's when 6th Sigma comes into play. It's like holding up a mirror to your business processes and practices, identifying areas of improvement that might not be obvious at first glance. It's about striving for excellence, not just making do. Or maybe you're in a slightly different boat. Maybe you've just acquired a new cannabis business and you're trying to figure out how to integrate it with your existing operations. It can be a bit like trying to solve a puzzle without knowing what the final picture is supposed to look like. That's another scenario where 6th Sigma shines. By hiring a 6th Sigma certified consultant, they can help you navigate the merging process, increase operational efficiency and ensure your newly expanded venture runs like a well-oiled machine.

And then there are those of you who are doing great. Your cannabis business is thriving, but there's a drive in you to keep pushing to be the absolute best. Maybe nothing's going wrong per se, but you're committed to continuous improvement. You're not content to rest on your laurels. For you go-getters out there, 6th Sigma can be a powerful tool in your pursuit of excellence. It gives you a competitive edge, helping your business stand out in the crowded cannabis landscape.

By this point, you may be wondering how a 6th Sigma project works. Your organization may indeed be fortunate to have 6th Sigma certified staff on board. However, to paint a picture that's universally applicable, one that resonates with both companies that do and do not have internal 6th Sigma certified employees, let's step through a hypothetical situation involving a 6th Sigma consultant brought on to streamline a dispensary operation. It all starts with research and analysis. A 6th Sigma certified consultant is brought in for a business assessment. They observe your operations, from customer check-in to check-out, looking for any redundancies or inefficiencies. For example, if your cashier has to click on four different screens to complete a single transaction, a 6th Sigma consultant might say, hey, we could do this more efficiently. After observing and analyzing, the consultant takes all that qualitative information, turns it into data points and puts it into a report.

This isn't just any report. It's like a roadmap to greater profitability and efficiency. It pinpoints areas of your operations that could be improved. The consultant might suggest cutting down that four-screen transaction process to just one, two clicks, or they might challenge you to rethink why you need multiple screens in the first place. It's about streamlining processes, making them quicker and more efficient. With this report in hand, you've got a clear picture of how your business is functioning and a clear path to making it function even better. It's like having a pair of x-ray glasses that lets you see the inner workings of your business. Once you have that information in hand, you could choose to have the consultant guide your team through the implementation process or, alternatively, you could present the report to your team and collectively strategize the best way to put those findings into action. That, in essence, is the power of 6th Sigma. It's not merely a process. It's a catalyst for change, a key to refining your cannabis business into a model of efficiency.

Like many business optimization concepts, this all sounds great, but does it actually work? Let's dive into some hard numbers to back it up. Here are a few compelling statistics about the effectiveness of 6th Sigma practices. Firstly, general Electric, one of the pioneers in implementing Six Sigma, reported savings of over $2 billion during the first five years of its Six Sigma initiative. Now, that's an impressive number. Another stat comes from the Six Sigma Academy, which estimates that black belt projects, typically the ones addressing significant operational issues, can save companies on average around $230,000 per project. If you consider the number of such projects a company can undertake, the savings ad up quickly. A report from the Journal of Management estimates that companies that have implemented Six Sigma correctly have achieved a return on investment of over 200% during the first year of application alone. A study by AT Kearney found that companies which have effectively applied Six Sigma practices witnessed an average increase of 20% in customer satisfaction and a 12% reduction in operational costs. These figures underscore the tangible benefits of implementing Six Sigma improved efficiency, lower costs, better customer satisfaction it's all there.

However, remember, the success of Six Sigma largely depends on a company's commitment to the process and the resources it dedicates to training and project implementation. For cannabis enterprises seeking to attain peak operational efficiency and gain an advantage in this progressively competitive industry, these figures should speak volumes that Six Sigma isn't merely a trendy term. It's a validated pathway to triumph. Success, as defined by the sustainability of your business, its profitability or its allure as a potential acquisition target, can be greatly enhanced by adopting this methodical approach. As we wrap up this illuminating episode on Six Sigma and its application in the cannabis industry, it's important to understand the key takeaway here. Six Sigma is not just a methodology or a set of tools. It's a philosophy, a mindset that continuously strives towards perfection. It's about making quality a core business strategy and aiming to exceed customer expectations every time.

Implementing Six Sigma in your cannabis business might seem daunting, but remember, the journey of a thousand miles begins with a single step. Start small, focusing on one process or problem area. Apply the DMAX cycle define, measure, analyze, improve and control, and witness how small changes can create significant impact over time. The benefits will span across decreased waste, improved efficiency, enhanced product quality and, ultimately, happier customers. So whether you are running a cultivation facility, an extraction lab, a product manufacturing operation or a retail dispensary, six Sigma can help you achieve operational excellence. It's a tried and tested path to making your cannabis business more competitive, sustainable and profitable. Thank you for tuning into this episode on Can Strategy Elevate your cannabis business venture? We hope it sparked some thoughts on how to level up your operations. If you found this episode valuable, please like and subscribe, and join us as we explore more ways to elevate your cannabis business and always remember quality is not an act, it's a habit. Make it a part of your cannabis business strategy and success will follow. Until next time, stay informed, stay inspired and keep elevating.