Do you recall products such as VisiCalc, Lotus 1-2-3 and Quattro Pro? They were the names of very early versions of spreadsheets, which some claim, were the first killer apps for personal computing devices back in the 1970s-1980s. They helped launch the personal computer, or PC, as a viable business tool. They were however, not the first.
In fact, the concept of a spreadsheet on a computer goes back to 1961, when Professor Richard Mattessich, from the University of California at Berkeley, pioneered the development of computerized spreadsheets for use solely in business accounting. Early mainframes, using a programming language called FORTRAN IV, were the forefathers of what we use today.
Before computers and data analysis became the norm, physical paper accounting ledgers were used. They contained large pages with rows and columns to hold data. The ledger consisted of two facing pages, or a spread, but were treated as one page to give more columns for data. This eventually led to the term “spread sheet” which stuck, became spreadsheet, and then was applied to software applications that had rows and columns for data. Spreadsheets have come a long way, and have evolved into major business applications. They became one of those items that makes major generational changes, the way the smartphone and tablet have today.
Spreadsheets are not without limitations and issues that can be critical for a business, especially in supply chain management. As a newcomer to this world, I have learned just how complex, dynamic and complicated a supply chain can be. There are many moving parts and pieces that have to be orchestrated carefully, in order for a business to maximize investments in raw materials and components that will become products. Unfortunately, all too often, companies rely on spreadsheets, push them to their limits, and use them in ways in which they never were intended. A poor procurement choice based on stale data can lead to a decline in profits.
There is a major issue with the lack of revision control and auditing. Many times I have seen file names such as 2015Q4Budgetv3.xlsx, so if I grab v3, and decide to make changes, I may or may not decide to save it as v4. Also, unless the file is kept in an environment where it needs to be checked out for revision protection, two people could be working on their own copies simultaneously. That won’t end well. And, who has final audit control? From our eBook, S&OP in the 21st century, “An audit of 50 corporate spreadsheets in 2007 revealed that 94% had errors… one for $100 million!” If no audit service is used, or that function does not exist within an organization, the results could likely be ominous. An error in forecasting made by one function will almost always have an impact on at least one or more other functions. That could mean excess inventory sitting in a warehouse, gathering dust or depreciating.
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