Tuesday 10 September 2013

Excel - The Public ERP

Authored by Sara Omer

For many Procurement and Supply Chain professionals Excel is perceived to be ‘a life saver’ or more elaborately put, the ‘unspoken ERP module’. Even professionals with years of experience tend to put the tool squarely in their comfort zones but in fact, for those professionals Excel in reality only acts as a bridge to close those analytical gaps within their operating ERP’s and as Forbes describes it, ‘the most dangerous software on the planet’.

Although the ERP industry have come on leaps and bounds in advancements over the last 5- 10 years, users still continue to revert to Excel to manage, analyze, and plan their supply chains. Excel was the first supply chain planning tool I ever used. Although I was only doing some simple demand supply balancing, it was still easier, faster and more effective than the ERP system that was in place. It’s a great personal productivity and analytical tool. However, a mistake, for example, in the formula of one column that leads to a complete miscalculation at the end, proves extremely difficult to trace with regards to the origins of the error. These “errors “aren’t a problem with Excel, if there’s an error, it’s a human one.

Nonetheless, if you don’t have the right analytical tool, it is a highly probable that you won’t be making the right supply chain decisions, thus it is critical for a supply chain professional to understand when and where a challenge requires a more sophisticated tool.

To get you thinking about whether or not Excel is the right tool for you, I have listed some examples of requirements that often crop up when attempting to manage more sophisticated supply chains. 

Do any of these sound familiar to you?

  • You have multiple data sources, in different locations, coming from different participants including customers and suppliers.
  • You spend more time collecting data than working with information.
  • Your supply chain has become more complex beyond simple demand and supply balancing based on due date and you have a substantial amount of analytical requirements.
  • You react to problems rather than being alerted of future potential shortfalls.
  • You find you can no longer respond to demand variability and supply chain disruptions effectively and profitably.
  • It’s becoming necessary to conduct what-if simulations in minutes or seconds versus hours, days or weeks.
  • Your S&OP cycles are too long and it is difficult to reach consensus before the next cycle starts.
  • Your IT department is resource constrained and thoughts of offering supply chain solutions in the cloud seem attractive.
  • Multiple people need access to the same information, sometimes in locations where it would be better served up on a mobile device.
  • Your supply chain KPIs (on time delivery, margin, revenue and inventory turns) are not where you want them to be
If you have applied Excel as a tool to close gaps in any of the above situations, I think you can agree that it can only provide limited value and if it sounds familiar then you may have outgrown what Excel was intended for.

We would love to hear some of your views on Excel and if the tool does or doesn’t work for you.



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