Major Industry Disruption Leads HendRx to Upgrade Their Systems to OptiProERP
LAGUNA HILLS, Calif., Dec. 4, 2018
LAGUNA HILLS, Calif., Dec. 4, 2018 /PRNewswire-PRWeb/ -- HendRx has selected OptiProERP as the manufacturing software to meet compliance needs and manage their rapidly expanding business.
HendRx Farms, located in Humboldt County, California, planted their first cannabis seed in 1996 after the historic passage of the California Compassionate Care Act. Since then they have grown into a lifetime of medicine and high-quality organic farmaceuticals, providing healthy, clean and valuable cannabis genetics to their associated farms.
In its early stages, the business was a cooperative with their customer farmers. When Proposition 64 came into effect in 2017 in California, with full legalization of cannabis in 2018, this allowed HendRx Farms to fully incorporate. They brought their separate operations together into one warehouse and have been building from the ground up since then. Because they had pre-existed as a medical collective, they had priority licensing which put them at the front of the line and gave them a head start in what was essentially a new industry.
HendRx Farms business is about cloning. They have a greenhouse setup in which they grow on what they call the 'Mother' plants, which are the different genetic lines. They take cuttings from the mother plants and bring them into a lab area where they can do a lot of high-density propagation. That lab is almost a pharmaceutical lab, pressurized, and with water-proof walls so they can spray down and keep it all hygienic. From cuttings, they also have a tissue culture partner that they work with who will take genetics for them so they can enter them into a clean stock program and then bring them back on site. They then do cloning off those mothers. So far, the industry hasn't fully evolved to bringing in tissue culture to a large scale, so they hope to be able to parallel their business partner and expand into that realm in the next couple of years.
The legislation changes were the trigger for needing a new business management system. When they opened their doors, they were one of the few that really put themselves out there with a strong advertising campaign. That was a double-edged sword. Their phones started ringing off the hook, but that put massive strains on their production line. They were not ready for the influx of business. It was the middle of 2017, right at the height of the season, when they realized their current legacy system was completely insufficient to run the operation.
They were using a mixture of Excel, and hard-copy analog systems – just clipboards and manually recording everything, then entering that data into excel. They used QuickBooks really basically, just a patchwork of solutions. Travis Poe, HendRx Facility Director/Founder, said "This led us to start looking for a new solution and we had a business advisor who was a supply chain guy from Boeing. He came in to give us a hand and looked at our inefficiencies. The number one thing he said was, to get a system that will give you visibility. For everything else, the data will set you free. We really took that to heart, and started looking for the right solution."
The search was interesting, because there are a few legislative things that came through that required 'Track & Trace', so with the passage of Proposition 64 it made them realize that regardless of what they were used to doing, or even were comfortable doing, the State was going to make sure that they did it in a specific way.
That got them looking at some Cannabis-industry specific, Seed to Sale applications – Trellis, Mary Jane Freeway, Proteus 420 – and they came to know about these through the main information supply chain that exists in the cannabis space, in that bubble, from industry events and such. Travis noted, "They were all startups, essentially. They came in promising the world, we sat with these reps and talked about our best case scenario: what do we want, and it was all 'Yes, yes, yes'. We signed up with Proteus and spent probably a couple of months banging our heads against the wall until we cancelled that." They started talking to a friend who was an accountant for one of the bigger lumbar companies near them. She was using Fishbowl so they initially got excited about Fishbowl, and its integration with QuickBooks.
At that same time they spoke to OptiProERP, from a list they had generated of different options in the market. "OptiProERP being an SAP-based product was for me a good thing, I have had experience with SAP platforms," Travis said. They chatted to the OptiProERP team about their entire operation. Travis said, "They were very clear about what was possible and were really good at explaining the analogy to their background in discrete manufacturing. They came at it from the understanding that it didn't matter what you were producing, there are proven ways to track production and implement those. That really is what got us turned on to OptiProERP."
The starting points were the requirement for Track & Trace, and the fact that they actually grow their inventory – they buy raw goods and create products out of them, but their main raw good just grows. That was one of the bigger challenges. A lot of the cannabis solutions they were offered were really just focused at the crop level, i.e. the Finished Good level, tracking finished units through the supply chain to the retailer. There was no comprehension of HendRx's manufacturing model that takes sunlight (natural and artificial) and nutrients to grow plants into a thing that they cut from and turn into a product.
The advantages HendRx found with OptiProERP were:
- Full integration of all functions from CRM all the way to the shop floor and beyond, including Accounting.
- An ERP solution that addressed their unique manufacturing needs and critical compliance requirements.
- SAP as the underlying platform, knowing that SAP gives it a quality stamp through their certification process.
- The customization they could do. Everybody else offered customization, but looking into OptiProERP it was really clear that customization had been figured out a long time ago on the back-end. HendRx felt really confident they could go with OptiProERP and design something that truly fit their business.
- Visibility: When it comes to the shop floor, it's being able to track their success rates, which are really big for HendRx. The cloning stage is a very precise operation, and if they are off by just a little bit they can have from a high 80% success rate all the way down to a low 60s. Being able to see that in real time, and respond to whatever may be the culprit for that, is huge because before that they had very, very limited visibility and wouldn't ever really get the full picture until it was too late. Variability could be from factors like light, time of year, nutrients, also the specific strains they decide to cultivate at scale. Each strain has its own propensity for successful cloning, so it's important for HendRx to be able to gather that data, especially as it feeds into information in their genetics program. Being able to network all those variables in real time to identify the best strain is invaluable.
Currently, HendRx's primary focus is solely in producing plants for other growers. They also do genetic breeding, targeted breeding for specific traits that are hot in the marketplace, or certain chemo types that have therapeutic value. So there's a whole breeding side of the business which they are excited about implementing in OptiProERP's tracking as the second phase.
In community outreach, HendRx are hoping for changes to allow them to resume a previous program that is prohibited by recent legislation. This season (before the legislative change was made) they donated in the realm of 350 high CBD plants to a partner farmer down in Mendocino County. Those plants are just now being harvested and donated through the Sweetleaf Collective in the Bay Area. Sweetleaf is an organization that provides free medical cannabis to more than 150 low-income terminally ill patients in the Bay area region. HendRx hopes they can do that again next year, depending on the next round of legislation.
About HendRx Farms
HendRx are in the business of cloning valuable cannabis genetics, both therapeutic and recreational, for growing by their customer associated farms. They have protected both rare and popular genetics in an organic operation.
OptiProERP is an end-to-end manufacturing ERP that combines financial management, supply chain, CRM, and industry-specific manufacturing and distribution solutions in one seamless system. Built on the world-class SAP Business One platform, OptiProERP gives small and midsized manufacturers the foundation to scale and compete, without the complexity and cost. http://www.optiproerp.com
For more information, contact:
John Houltham, jhoultham(at)optiproerp(dot)com