Spreadsheet software is holding your supply chain performance hostage.
True – spreadsheets are low cost, easy to use, extremely versatile and universally known and loved. It has and seems to continue to get the job done so what’s all the fuss about?
Known knows; Known Unknowns; and Unknown Unknowns:
Planning is difficult. Planning your supply chain with its plethora of parameters and dimensions: demand signals, multiple channels, SKU proliferation, locations, lead times, capacity constraints, service level targets, inventory budgets, product life cycles, replenishment and transportation routes – is downright complex.
No matter what Excel Eric or Access Amy is saying – your supply chain planning spreadsheet is not covering all the bases. Hence repeated academic studies and experts have warned of the perils of using spreadsheet to drive your planning process.
An Honest Assessment:
Here are 6 reasons why supply chain planners and managers need to to give up spreadsheets:
1. It has unacceptable error rate
- Spreadsheets have high error rates in data entry updates and calculationsthat are oh so easy to miss
- Domino effects of innocuous errors can result in wide gaps between realities and the spreadsheet plan
- Supply chain plans are mission critical actions that need to be planned in an error free environment
2. It lacks agility and real time planning
- Manual spreadsheet based planning cycles add lead times between analysis and action
- Supply chains today are random, unpredictable and extremely fast moving for static spreadsheets
- Spreadsheet planning will always result in higher safety stock and less responsive supply chains
3. Dumbs down your supply chain
- Spreadsheets require stripping of business process, data, and mathematical complexities to fit the ‘box’
- Aggregate level summaries and views miss out insights that transactional level data can reveal
- Analytical abilities are limited to the skill and experience of your planning team available at the moment
4. It is not collaborative
- Spreadsheets are single user tools that create “master users” with unequal access and responsibilities
- Reliance on a small cohort of data savants promotes tribal and not institutional knowledge
- Spreadsheets are so easy to create and duplicate that they proliferate and create different versions of truth
5. Poor analytics
- Spreadsheet based planning cycles are ad-hoc processes that miss dynamic business realities
- Spreadsheets are passive and cannot give you predictive and prescriptive supply chain plans
- Wholly unsuitable to take advantage of big data analytics or innovative demand sensing tools
6. Data Security (or the lack of)
- Planning on spreadsheets mean riskier data transfers, sharing and storage of sensitive business info
- Plans are susceptible to loss due to server crashes, system failures, data loss or simple file errors
- Lack of version control means changes, authorized or not, can have a lasting impact on business decisions
Follow the light:
Many of our clients have kicked spreadsheet based supply chain planning to the curb and embraced planning on a cloud based, collaborative supply chain analytics platform.