Excel doesn’t excel in all cases…

Published April 28th, 2010 by Monique Rupert 4 Comments

I recently read a blog post titled “Beware Supply Chain Excel Users—YOU are DOOMED!!!!” by Khudsiya Quadri of TEC.  I completely agree with the author that there is a big risk to SCM Professionals who rely too heavily on Excel.  There are all the reasons listed in the article such as  lack of collaboration, visibility, control and no ability to perform “what-if” scenarios.  I would like to add some additional thoughts to this discussion.

A big limitation of Excel in my view is that it cannot mimic the analytics in the company’s source ERP system.  Why is this important?  If someone is using Excel to make business decisions without all the capabilities the ERP source system has, then they may not be making the right decisions.  How can you make planning decisions if your spreadsheet doesn’t take into consideration functionality like sourcing rules, constraints and order priorities?

A company’s supply chain map is very complex, typically there are internal manufacturing data sources, external manufacturing data sources, inventory site data, etc.  It is possible to get data from multiple sources into Excel, but the big challenge is that the data is not always the same from each source system, so many organizations may have multiple spreadsheets to perform the same function/analysis.  But can any of those spreadsheets be truly accurate if they don’t show a true picture of the whole supply chain?

It is almost impossible to control the integrity of spreadsheet data and access to the spreadsheet.  With multiple people accessing the spreadsheet and no security, how can anyone have any confidence in the data?   In addition, most spreadsheets need to be reviewed by many people which typically requires pushing the spreadsheet around.  Without system standard security, data integrity could be an issue and auditing who made changes could be an issue.   How can there be a high level of confidence in the data and subsequent business decisions made?

I have known many supply chain companies who do make critical business decisions based off of spreadsheets.  For example, one company would use spreadsheets to analyze big order drop ins.  If they had a big order drop in they would use their spreadsheet(s) to determine the effect on their business and when they could commit to the customer to deliver the order.  This would typically require multiple spreadsheets getting data from multiple sources, tons of manipulation, trying to tie data together, and many different users from the organization looking at their piece, which would take several days and by then the data had changed and the end user would only have a 50% confidence level in the answer back to their customer.  This can be crippling if your products are very expensive like in the aerospace industry where the products are multi-million dollar and the customer is the government who may impose penalties if orders aren’t delivered when promised.

You need to:

  • get all the supply chain data in one place for visibility (with frequent data refreshes),
  • mimic the source system analytics,
  • have all the system standard security functionality and
  • output data in a familiar “Excel-like” format.

True nirvana is: one source of the truth, multiple users having access at the same time, data integrity, “what-if” capability with the power and flexibility of “Excel-like” outputs.

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4 Responses to “Excel doesn’t excel in all cases…”

  1. George Gibbons

    I agree – the human element of judgement and acceptance that certain factors shall fail mean you can’t rely on any software package – I have yet to see a “Virtual” truck or machine actually manufacture or deliver anything. Have you. I am thinking of the expression “Ghosts in the Machine”. Humans are the best judges of possible outcomes, always shall be.

  2. JP

    “no ability to perform “what-if” scenarios.”

    Excel actually has a scenario function which can be used for “what-if” analysis. It also has a Goal Seek feature.

  3. George Gibbons

    A scenario button just means the Human has another tool to use – if he wishes. The decision shall always be made by the Human.

  4. George Gibbons

    OK – just as an example – What Software package predicted the Volcano and who then really had to make alternative arrangements in an ever changing and hostile environment?

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