Like other cannabis startups, Wabi Sabi Brands Ltd. must comply with multiple Canadian regulations and provide traceability in the advent of a product recall. Before it set up its manufacturing facility, Wabi Sabi Brands deployed BatchMaster ERP built upon the SAP Business One platform, gaining a fully compliant food manufacturing ERP that shaved 19 hours off a mock recall. BatchMaster ERP also provided traceability throughout various distribution methods, and full inventory management to track batches, raw materials, and works in progress.
- Implemented a single, integrated, and modern food manufacturing platform designed to expand
- Gained real-time operational visibility with embedded apps for manufacturing, including data collection
- Saved 19 hours of labor on a mock recall simulation exercise, reducing task completion time to 20 minutes
- Eliminated manual data entry and duplicate tasks often needed with siloed systems
- Attained lot and serialized component and finished goods traceability with detailed manufacturing costs
- Obtained end-to-end data visibility from order to manufacturing through distribution and shipping
Canadian Cannabis Chocolate Maker Launches
Founded in 2019, Wabi Sabi Brands Ltd. is an Alberta, Canada-based company making high-quality cannabis edibles sold in in the provinces of Alberta, Saskatchewan, Manitoba, and Ontario.
Founded by a 5-time Ironman competitor, serial entrepreneur, and chocolate scholar, the company makes its products with the finest sustainable Belgian chocolate, infusing its chocolates with full-spectrum cannabis extract instead of distillate, delivering a terpene- and cannabinoid-rich experience.
Once the startup received its license from Health Canada, it began setting up its manufacturing operations in Alberta. Each Canadian province has its own Cannabis framework and a board that regulates cannabis edibles sales differently, says Sarah Goertzen, head of quality at Wabi Sabi Brands.
In Alberta and Ontario, the Alberta Gaming Liquor and Cannabis Commission (AGLC) and the Ontario Cannabis Store (OCS), respectively, control sales and warehouse the Wabi Sabi Brand’s products. Retailers order from the commissions.
Manitoba Liquor & Lotteries (MBLL) facilitates the retail orders in Manitoba, then passes them on to Wabi Sabi Brands to fulfill.
In Saskatchewan, an independent private operator handles retail sales and Wabi Sabi Brands supplies the operator’s warehouse.
Regulatory Compliance Critical
In addition to working with the various commissions and authorities, Wabi Sabi Brands faces additional rigorous federal reporting requirements, including performing a mock recall once a year and performing traceability exercises, Goertzen says.
Knowing that it would need to control and account for the amount of cannabis in its chocolates, navigate different distribution systems, and be required to perform mock recalls, Wabi Sabi Brands looked for a manufacturing ERP as a first step before it even began making its products, says Ed Rha, CFO.
The company wanted a specialized ERP application designed for food manufacturing, one that could handle batch process requirements based on recipes, qualities, and potency. They needed a system that offered lot control, lot recall, compliance, and robust inventory management that tracked raw materials and lots in progress as well as quality testing.
BatchMaster: Robust ERP for Food Manufacturers
Wabi Sabi Brands executives evaluated ERPs from several software vendors, including Oracle NetSuite, BatchMaster Software, and Surge Force. Since the company is backed by private investors, the team wanted to ensure they had a solid financial package that could also help them with compliance and cost control.
Wabi Sabi Brands’ operations need a batch or formula-based manufacturing system that could help them maintain the critical dosing requirements and to manage the supply chain to ensure they have the necessary ingredients on hand, says Goertzen.
“There are really tight margins in this business and its critical to track dosing and the minutia of materials for inventory,” Rha adds. “We also wanted to make sure we deliver safe products.”
For Wabi Sabi Brands, choosing an ERP wasn’t difficult.
“We signed up with BatchMaster Software immediately,” Rha says. “Our CEO used to be a super user with SAP and was a strong advocate for using the best in breed for our ERP. He wanted to ensure we went with the Cadillac of ERPs.”
The CEO liked that BatchMaster Software’s leading manufacturing capabilities were combined with SAP Business One, which gave him an added level of comfort, says Rha, adding, “When we signed up, we didn’t have any operating equipment or processes, or customers.”
Bootstrapping ERP Deployment
Deploying an ERP as a startup and before having a manufacturing plant or processes or products was challenging. It was even more complex since Rha didn’t have an IT team, nor any employees to help and was assembling the entire team and fleshing out operations, including processes. Despite these limitations, he felt the implementation went smoothly because of the BatchMaster team.
“Our BatchMaster lead consultant was an awesome person to work with,” Rha says. “He was patient, able to answer my questions, and was responsible and accountable.” The consultant guided Wabi Sabi Brands through the various implementation stages BatchMaster ERP uses with more established companies and helped Rha envision various processes that are considered best practices in the food industry, especially those that are tightly regulated.
Together, they created dummy transactions to test the implementation.
“Our lead consultant was a superstar,” Rha says. “He was able to define the stages we would need for traceability and recall and offered background and non-implementation tips that have become valuable to our business.”
Then the pandemic hit.
“We had to go completely online and under normal circumstances, our implementation would have been a challenge,” Rha says. “But the BatchMaster Software team is really good at what they do.”
While Rha was orchestrating the company launch, Goertzen manually created the documentation needed to comply with the different regulations required by each province, which resulted in hundreds of documents.
“We designed processes to calculate the dosing requirements along with mimicking a batch ticket. All of the manual data we collect on the operations floor gets typed into the manual system,” she explains. “There are a couple of dozen forms attached to every lot.”
Part of the licensing regulations require Wabi Sabi Brands to perform a mock recall once every year, and they add a traceability exercise as well every six months, she says.
Mock Recall: Saved 19 Hours
With BatchMaster ERP up and running, Wabi Sabi Brands ran a mock recall test side by side between the ERP and production supervisors who performed the task manually on paper. “We did a step-back style mock recall where one of the ingredients is contaminated so we needed to figure out which lots the ingredient ended up in and where did it go,” Goertzen says.
“We were running a parallel process to ensure that the integrity of our data remained intact,” adds Rha. “During this exercise, it took 4 staff members 5 hours each to complete the Recall exercise. This worked out to 20 hours of paid labor that is critical to us as we are a growth company that relies on each penny that we spend.”
Meanwhile, BatchMaster ERP returned results in just 20 minutes. “Well, five minutes of actual BatchMaster ERP time and 15 minutes drinking coffee,” he joked.
“In BatchMaster ERP, we just typed in the lot number and off we went,” Goertzen says. “We also had an issue with missing inventory (in the paper test) and the ERP found the mistake.”
In total, Wabi Sabi Brands saved over 19 hours of labor. “This is a massive savings to a company like ours and we are so thrilled with the BatchMaster ERP system and how it allows us to manage our financial resources in an effective manner,” Rha says.
Tracking Inventory Accurately
Having BatchMaster ERP in place from its inception helps Wabi Sabi Brands track costs closely. “Just like everyone else, we all face cost inflation, and our input costs have gone up,” Rha says. But unlike others, executives have taken a conservative approach and the company is debt free, he adds.
Keeping a close watch on inventory and material costs help the company manage supply chain issues, and ensures they can meet demand from the various entities distributing their edibles. “BatchMaster ERP allows you to plan ahead with demand planning and resource management, track goods about to expire, and ensures that products are compliant,” Rha says.
“I’m really impressed with what we can do and that everything we need is all in one place,” adds Goertzen. “I can easily find what we have done, what we tested, where things shipped, all data I need for a monthly report. I can find out what happened to the cannabis, how much we used, what left the facility as a finished product and I don’t have to go all over the place to put together the story.”
Wabi Sabi Brands is busy rolling out various chocolate edibles and growing market share in the four provinces it currently operates in, which make up a large part of the Canadian population. “Our plan is to become a bigger entity and prove we can stand on our own,” Rha says.
“We now have 10 to 15 percent of retailers carrying our product, and next year will be a year of growth,” he says. “We are expanding our footprint in Ontario, which is a huge market for us.”
The three-year-old company will need to carefully navigate the various legal requirements it must comply with while running a lean operation and boosting its marketing to stay top of mind in what is shaping up to be a competitive marketplace. BatchMaster is the foundation helping them achieve on all fronts.
“If you care about tracking costs accurately and care about compliance at the highest level and receiving information on a timely basis, seriously consider BatchMaster ERP,” Rha says.