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System Integration in the Cannabis Sector

July 19, 2018 | Sean Samuel

In what is increasingly being referred to as the age of ‘Digital Transformation’, software implementation and integration are becoming necessary to maintain a competitive advantage. What is digital transformation you ask? Bill Schmarzo from CIO.com has a succinct and straightforward take, “Digital Transformation is application of digital capabilities to processes, products, and assets to improve efficiency, enhance customer value, manage risk, and uncover new monetization opportunities.” 1 While the implementation of Seed-to-Sale (‘S2S’), Enterprise Resource Planning (‘ERP’), and Quality Management System (‘QMS’) technologies in the cannabis sector remains strong – it is the integration between these systems that is just starting. The purpose of this blog is to outline not just why it’s beneficial to integrate systems, but why it’s necessary from both an efficiency and compliance perspective.

For the sake of brevity, we will focus exclusively on a theoretical integration between a S2S and QMS. Traditionally, business systems such as an ERP, S2S or even a Supply Chain Management (‘SCM’) system would serve a single purpose for a defined group (or specific department). The end result is information silos; the data across these systems is disconnected or redundant, and communication is hampered across departments. Furthermore, when data does need to be transferred from one system to another manually, that data can become compromised with qualitative or quantitative data quality issues between the two systems. Manual methods such as using excel spreadsheets or Google docs to record and transfer data is prone to human error (collaboration via email/by mouth, lack of version history, lack of audit trail, no established document control workflows like review and approval processes, etc.) making these compromised data collection/transfer tools. The infamous Takata airbag recall illustrates this point – it was determined they had pulled bad data (in this case, failing results) from their spreadsheets prior to approval and dissemination of said test results. The end result? Settlements of $125M to compensate consumers and $850M in restitution for automakers.2 In fact, they filed for bankruptcy almost exactly a year ago. Needless to say, compromised data can hurt your business decision making process and may get you in trouble with regulators as well.

Quality Management Systems are also part of this information silo scenario and are often treated as a completely separate function of the business. Offline communications and reports tend to be the connection between the Quality department and the rest of the business, and that is absolutely not how you build a culture of quality and compliance in an organization. When a S2S or business system that controls the products and run the manufacturing process are ‘blind’ to the status of the QMS, this can lead to critical errors in the production environment, defective products being released (or unnecessarily quarantined) and other noncompliant processes. The end result here is not a pretty one – there is potential danger to the consumer, operational inefficiencies that cost time and money, and of course regulatory repercussions if non-compliance has occurred.

What does integration look like?

While there are a couple different ways to integrate disparate systems with one another, the most frequently used method nowadays is via Application Programming Interfaces (‘APIs’). APIs provide developers with a set of definitions, protocols and tools that they can use to interface with any piece of software. In terms of integration that type of software would be middleware, which acts as a liaison between the two systems, effectively interpreting information from one and passing it along to the other.

QMS Integration software

How It All Comes Together

Now that your S2S and QMS have been integrated, how do they work together? Your S2S will run the production process and track your inventory, while your QMS will handle the Nonconforming Material (‘NCM’) process and quality assurance. A NCM is one of the many quality scenarios that would be managed in your QMS such as: a change controls, supplier issues (SCARs), unplanned deviations, customer complaints and adverse reactions. The bottom line here is that your QMS is responsible for automating the 1. Recording 2. Management and 3. Resolution of quality events. There is a 4th variable missing though, and that’s 4. Self-Improvement; quality events are a way of life in the cannabis sector, but what regulators care most about is that you are a) recording absolutely everything and b) taking the initiative to improve (i.e. demonstrate you’ve learned from your mistakes). This is where QMS thrives – let’s say you’ve had a quality event that is directly associated to a particular Standard Operating Procedure (‘SOP’). If the resulting investigation has determined the SOP needs to be amended/updated, you can associate that SOP with the quality event or specific NCM in your system, make the required changes to your SOP, approve those changes, re-train your employees (with an FDA 21 CFR Part 11-compliant ‘read & acknowledge’ e-signature) on the affected SOP, and have a bullet-proof audit trail created while all this is happening. It is this type of functionality, along the ability to self-audit at will, that demonstrates self-improvement initiative.

In an integrated environment, incoming cannabis from the S2S is inspected and tagged and if defects are discovered they are flagged within the S2S and effectively quarantined for the time being. Now that your S2S is integrated with your QMS, the S2S will automatically trigger a quality event (we’ll call it a general NCM) within your QMS. All relevant data pertaining to the product – batch, lot, strain, growing room, facility, etc. – is automatically copied into the NCM record in your QMS. Depending on the type of quality event, the appropriate corresponding workflow is then launched.

cannabis quality control

Once the NCM workflow is initiated, assigned users are automatically notified via email (push notification configured through your QMS); where escalation, collaboration, delegation, and approval business rules ensure the management of the NCM is smooth and comes to a quick resolution. Ultimately, the affected product is either kept or destroyed, and associated SOPs may need evolving as well. During this process, the investigation/resolution status is being continually fed back to your S2S via a second integration point. This is important because product control can know how to disposition the affected product, in real-time.

Speaking to efficiencies, multiple defective lots can be handled within the QMS. Traditionally, if multiple lots are quarantined, an NCM would have to opened to handle each lot, resulting in hundred of NCM processes which exhaust producers of time and valuable resources. Using a cutting edge QMS technology, integrated with S2S, you can now ‘bundle’ multiple defective lots into one NCM process. A single NCM, in this case, is capable of handling multiple lots, and the corresponding disposition types are updated within your S2S.

The Business Benefits

The above integration scenario outlines how you can integrate S2S systems into your QMS, specifically for the handling of nonconforming materials, along with the communication of the investigation process and disposition types back to the S2S system.

Whether you are a boutique, craft producer or a large, global producer with multiple facilities and subsidiaries, minimizing overall cost/unit is a key business driver. Any product quarantined (let alone destroyed) will increase your cost/unit. Synchronized communication via QMS-generated e-mail push notifications helps establish and reinforce a culture of quality throughout your organization. The risk of a product recall is one of the prices a producer can pay for poor quality, the risk of non-compliance and resulting penalties is an even greater risk. Make no mistake about it, as the global cannabis market matures, quality standards improve, and supply starts to finally catch up to demand, regulatory enforcement (i.e. Office of Medical Cannabis) will be more inclined to ‘bring the hammer down’ and start seriously penalizing non-compliance.

Integration scenarios such as the one above not only minimize the number of defective lots held in inventory and put product back into the production process quickly and efficiently, but they also help ensure compliance. The end result is better data, better business decisions, better product and better compliance. QMS & S2S integration is undoubtedly a competitive advantage for any producer in the cannabis space.

C15 is a technology company focused on serving the cannabis sector exclusively. At C15, we believe cannabis producers have a rare opportunity; large enterprises in other sectors have the task of digitally transforming their existing business model, which eats up a lot of time and resources. Being a nascent sector, there is no ‘old empire’ that requires changing, adapting and implementing.

If you’re an aspiring cannabis producer or already have your license to cultivate and/or sell, C15 wants to help you digitally transform; taking the step to integrate your S2S with a QMS will not only help you make better business decisions, saving you time and money, but it will ensure you are staying compliant and creating a culture of quality within your organization. Reach out to us today at info@c15solutions.com and we would be happy to discuss transforming your cannabis company.

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