Are you using spreadsheets as a supply chain planning tool to collect and manage your data and perform analysis? Well, you’re not the only one hopping from one Excel sheet to another all-day at work. As a matter of fact, you are doing nothing wrong, if it were the early 2000s. It turns out “insiders joke about billion-dollar procurement-management-disposition cycles that are managed in spreadsheets” according to Requis.
There’s no doubt that spreadsheets are easy to use with familiar and easy functions, formulas, and calculations… However, is “ease of use” the only priority for supply chain planning? What about real-time data processing, scalability or accuracy?
Here are 5 reasons why spreadsheets are not the best alternative as a supply chain planning tool anymore:
1) Lack of end-to-end visibility to the overall supply chain
When working with spreadsheets, planners usually focus on their part of the supply chain. This gets in the way of having end-to-end visibility to the overall workflow. Ability to do root-cause analysis is limited and decision-making requires coordination across multiple functions and data-sources. When visibility is provided for all parties, planners can make faster and better decisions and identify areas for improvement. To illustrate, the visibility of forecast-related last minute changes in production plans drives collaboration between demand planners and supply planners. Eventually, quality of demand forecast gets improved, change requirements and corresponding setup costs are reduced.
2) Lack of access to real time data
Last-minute changes due to unforeseen events while making daily or weekly operational decisions are very common in supply chain planning. Thus, planners are sometimes forced to make manual updates on plans in a very short time. For instance, a customer might be temporarily unavailable to accept product delivery due to a warehouse operation issue. Therefore, your customer service executive needs to adjust the transportation plan accordingly. Or a supply planner might have to change the production plan due to a last-minute machine breakdown. Even think about the COVID-19 pandemic, where a whole production shift had to be cancelled due to a single worker with positive COVID-19 result involved. It is very difficult to keep track of these changes while maintaining all the information on spreadsheets. These manipulations can only be managed if all data sources are consolidated in an automated way and visible in real-time on a cloud-based platform. Planners from all parties in the supply chain looking at the same screen in real time will also help minimize the room for human error on operations.
3) Lack of automated diagnostics and prescriptive actions
In this era of digital transformation, agility and speed are the key differentiators in supply chain planning. In order to be more agile, businesses must benefit from using both internal and external data sources. Once you have visibility to all the data on a single platform, the part where you make sense of the data begins. Throughout her daily routine, a supply chain planner needs focusing on the exceptions on the data to save time rather than digging into the details of multiple spreadsheets to find the problematic situations. A next-generation supply chain planning tool provides automated data analytics to summarize the exceptions on the data and to generate actionable recommendations out of it. So, collecting data on a single platform for real time visibility, generating automated diagnostics for root causes of problems and recommending prescriptive actions are the key steps on the road to digital supply chains which cannot be achieved using spreadsheet models.
4) Lack of corporate memory and standardization
The majority of supply chain operations are complicated and models for decision-making require a certain level of experience and know-how. When a company relies on spreadsheets built and maintained manually, analytics and quality decision-making remain dependent on the capabilities of the individuals. For the new hires, learning curves can be steep and frustrating due to lack of standardization. Lack of standardization also gets in the way of continuous and measurable improvement. When employees leave, the know-how leaves with them, too.
5) Difficulty in maintaining accuracy and synchronization
Usually, everything starts with a single harmless Excel sheet. Take a walk around your office to observe how many different spreadsheets each colleague is working with. Suddenly you’ll realize that the multitude of data fields required at the beginning of a certain task keep evolving and growing and turn out to be much larger in size and impossible to track. Each member of your team creates a number of folders on their laptops and tracks several email loops to maintain the excel files and have to manage and track different versions. As the scale of your business grows, your file sizes grow with it and each action starts to take longer. As the data and models grow in complexity, so does the room for human error. It becomes easier to make mistakes while multiple planners or executives take turns to work on the same spreadsheet and share it with everyone else, it’s even harder to track the source of errors. Accuracy and synchronization of the data present challenges as well. While companies have started adopting cloud computing technology for document sharing and storage, managing large models is still challenging due to growing complexity in the planning processes.
How to transform into next-generation supply chain planning?
In digital transformation for supply chain planning, the ultimate goal is to build a collaborative platform, to bring everyone involved in the supply chain together, to make faster and more accurate decisions to keep up with changing market needs.
So, if you are still swimming in a sea of spreadsheets and spending most of your time manipulating data instead of taking action, don’t despair. Cloud-native, synchronized end to end and collaborative platforms to accelerate your supply chain planning transformation are already here!
Book a consultation session with Beliz Oktay to plan your supply chain transformation journey.