Excel in supply chain management, by advantage and limitation. Includes usability, transferable skills, cost and integration with other tools as reasons for adoption, version control overhead, big data and multi-source scale limits, batch-versus-real-time constraints, single-user security exposure, and the Excel mentality itself, explained by a supply chain data team.
For as long as I can remember, Excel, has been a most trusted tool of choice for managing data in various industries. In fact, Excel has been so ingrained in our daily operational activities that it should come as no surprise to see its influence overflowing into the more complex realm of Analytics. In the world of Supply Chain, for example, Excel is extensively employed in some of the most mission critical tasks, such as Demand Planning or Optimization of Resources, among others.
However, while Excel offers many advantages, it comes with a few fundamental drawbacks that inevitably makes effective application of the latest technologies within any sizable enterprise a real, and expensive, challenge. In this article, we briefly explore some of the positive and negative aspects of using Excel, specifically in the context of Supply Chain Management, and hope to hear from as many practitioners regarding their insights on the matter and their direct experiences of the challenges involved in moving away from over-reliance on what is essentially a late-1980s technology solution.
Table of Contents
- What are the advantages of Excel in supply chain management?
- What are the limitations of Excel in supply chain management?
- What is the Excel mentality?
What are the advantages of Excel in supply chain management?
Why is Excel so easy to use?
Excel has always been, and remains, an easy-to-use application. It has an interface which imminently encourages users to start interacting with it. After all, any tool that does not require a PhD, or a multi-national vendor's certification to operate has to be user-friendly at core. And let us not forget that its established grid-like look and feel is now a data communication standard within the Supply Chain domain. In short, those of us who seek to create new products with strong stickiness factor will do well to learn a thing or two about the design philosophy of Excel.
Are Excel skills transferable between roles?
Excel is immensely flexible, in that a user's knowledge of this application is readily transferable from one domain to any other. In other words, this flexibility removes the need for a lengthy or more detailed "domain-specific" training before one can start creating tangible values with it. This is yet another reason for carefully analyzing what makes Excel such a success over an extended period of time.
Is Excel cost-effective compared with supply chain software?
Excel is unquestionably cost-effective. In a world where millions of dollars are spent on software licensing alone, being able to create insights from an immensely cheap alternative is a no-brainer for many executives. This makes it ever more critical for those of us in the business of software development to be quite crisp with how we measure and communicate the Return on Investment (ROI) of our new offerings. Maybe, deep down, this is why I am not such a huge fan of Excel!
Does Excel output integrate with other tools?
Finally, its standardization as a data management tool of choice over the past few decades has allowed Excel output to be quickly integrated into many other products, from other Office applications to third party tools. On the surface, this facilitates collaboration and data sharing between different teams and departments, which is surely a good thing. However, what at the first glance looks like a major advantage, may, in fact, lead to what is arguably one of the main disadvantages of Excel, as we will see shortly. In fact, now is a good time to move on to some of the big problems with relying too heavily on this tool.
What are the limitations of Excel in supply chain management?
Why is version control a problem with Excel?
Version Control remains a major problem with utilization of Excel in any enterprise. In fact, it is quite common for many organizations to spend more time on reconciling multiple versions of their Excel files than they did in totality on creating the files in the first place. Needless to say, this leads to many errors and points of argument (often politically charged) with no clear winner in sight.
Can Excel handle big data from multiple sources?
As far as Excel is concerned, size does matter! In the world of Big Data, relying on Excel to effectively manage huge amount of information from multiple and diverse sources is, quite simply, a recipe for disaster. As the complexity of Supply Chain grows and the requirement for enriching data from any given source with additional information from other sources becomes critical, Excel offers no real solution and is more likely to lead to additional data handling errors, severe performance degradation and loss of clarity.
Can Excel work in real time?
While Excel was a clear star of the era of batch data management, the world of today is real-time driven. Any modern Supply Chain solution needs the ability to receive, process and respond to data dynamically. In fact, one could claim that a Supply Chain organization's ability to act in real-time is the foremost indicator of whether or not it has the necessary edge over its direct competitors. This is why companies that still rely on Excel as the source of Business Intelligence and Analytics are in serious danger of being overtaken by any competition that offers a more dynamic approach to generating and applying insights.
How secure are Excel files?
Finally, Security remains a major concern with tools such as Excel. Applications such as Excel are quintessentially single user. Excel files are particularly open to abuse and unauthorised access due to lack of comprehensive security features and the fact that their design encourages sharing through less secure means, such as email attachments. As security and privacy become core concepts in modern Supply Chain solution design, Excel, and other similar tools, increasingly turn into the most vulnerable points in an organization's technology stack.
What is the Excel mentality?
But perhaps, the most problematic aspect of over-reliance on Excel in modern Supply Chain has less to do with the tool itself and more to do with how it changes the behaviour of the users. Tools such as Excel promote search for quick fixes, regardless of what problem you are trying to solve, rather than proactively building a solution that dynamically learns from operational details and churns out illuminating insights that can be applied in real-time.
Such a tool encourages producing a solution (any solution) for a given user rather than one that is consistent across the board and can be used by a wider audience. And while it encourages easy sharing of files, it does nothing to promote effective sharing of insights at speed. In short, the problem is not Excel itself, but the "Excel Mentality" that is, arguably, the biggest challenge for any attempt at modernizing Supply Chain.
