Why Using Speadsheets is a Risk for Your Supply Chain

SpreadsheetIn the recent white paper “Spreadsheet Risk is the Number One Threat to Supply Chain Excellence”, Logility puts spreadsheets in the spotlight and make us think about how they can sabotage your supply chain.

Logility’s Spreadsheet Definition

A spreadsheet is:

  1. an interactive computer application program organizing and analyzing data in tabular form.

  2. no way to run a supply chain!

Spreadsheets are a common tool usually set by default on computers. Easy to create and handle, a spreadsheet allows you to store a significant amount of data. Formulas and cross-functions are a big asset with data analysis.

From the retailer to the multimillion company, Excel and the Excel-like software have settled on PCs, and have quickly become the favorite tool of numerous employers/employees, and especially in the supply chain field.

Spreadsheets: The Authority in Supply Chain Software?

As Logility points out, spreadsheets have spread for 3 main reasons:

  1. Excel and Open Office spreadsheets answer supply chain managers’ needs in a better way than Enterprise Resource Planning systems which usually lack of flexibility. Customized modules require a bigger budget. Spreadsheets are the cheapest (if not free) alternative. Moreover it is common for ERPs to use spreadsheets to load data into their system.
  2. Easy to buy and access, spreadsheets software is a must in the PC’s tool box. Unless you go with Linux or build your own computer, chances are that it will be in your default programs.
  3. Supply chain managers need tools that they can customize and adapt to their products. Demand, inventory, transportation and manufacturing planning are some of the aspects covered by managers.

“More than 200 million people worldwide use spreadsheet applications and about one-third of people spend more than half their working days using them” (Robert Kugel, Ventana Research, “Make Spreadsheet Competence a Priority,” June 2012)

We are millions using them… but how many of us have thought about their drawbacks?

Limits: Spreadsheets, a Tangled Octopus

Spreadsheet asset management utility

  • Lack of training. A 2011 study by ClusterSeven, titled “Spreadsheet Risk Management within UK Organisations,” shows that 57% of users have never received proper training…
  • …Which leads to a significant number of errors: Coopers and Lybrand, in the article “How to Make Spreadsheets Error-Proof” published in the Journal of Accountancy, estimated that 90% of spreadsheets with more than 150 rows contained errors.
  • Maintenance is key, but time-consuming as well. Proof-reading should be a must, but who will spend another 2 hours checking if the entered data is right?
  • Spreadsheets become a jungle for a supply chain manager when it comes to deal with different time periods, product life-cycle and forecast models.
  • Difficulty of sharing spreadsheet information: you may spend a lot of time on Excel and then send the spreadsheets to your colleagues. But contrary to a cloud-based solution, and unless you make sure to send documents after every update, it can be tricky for your colleagues, especially from other departments, to use the right document version. Think about when it comes to merge data… not easy as pie.
  • Each person has his or her way to edit spreadsheets and may use different guidelines. Formatting may differ, causing errors and misunderstanding.
  • Excel will not tell you when something is wrong in your inventory or manufacturing planning: contrary to ERPs, you will not see a red flag. Every time data changes graphs do not always follow and you will probably have to recreate them.

Spreadsheets are like a notepad: easy to get, easy to write information on, and can fit in your pocket or work bag. But on the other side, if you need to write a project planning or your quarter schedule, you will need to think about alternatives to handle complex data in an efficient way.

Notepad Asset ManagementIf you are a supply chain manager, do not be afraid of thinking about tools that are really made for you. It may lightly increase your budget, but you will save on time and money by having a tool which allows you to handle complex data, answering your needs in terms of supply and manufacturing planning and letting you know when an alert comes up.

Veracity Connect, Collaborative PlatformIf you are a manager or an engineer for a utility company, you may be interested in Veracity Connect, a cloud-based platform designed to help you manage critical assets such as transformers, switchgear and other heavy equipment. More than inventory software or a spreadsheet-based solution, Veracity Connect allows you to:

Efficiently Organize Information

  • Store and access data from anywhere through the Internet
  • Have a clear overview of your assets in no time
  • Upload all equipment-related documents (product sheet, testing results, PCB counts, etc.)
  • Ensure a proper audit trail

Ensure Reliability Through Collaboration

  • Avoid outages caused by out of stock or hard to replace equipment
  • Find replacements to obsolete items that are no longer manufactured
  • Locate surplus in corporate wide inventories, send the “bat signal” to fellow utilities and industry partners to source needed critical spares.

Mitigate Risk

  • Quickly locate critical spares by identifying potential sources
  • Proactive approach to managing equipment failure

Offset Capital Expenditures

  • Reduce inventory levels and carrying costs knowing your spares needs are available
  • Liquid surplus with higher returns
  • Get full logistics support to shorten the time to source equipment

Veracity Connect, collaborative platform

Don’t miss a chance to get in touch with us by calling us at 866-694-1252 or info@veracityamg.com.

Visit our website veracityamg.com and our social media platform:

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2 thoughts on “Why Using Speadsheets is a Risk for Your Supply Chain

  1. Pingback: Equipment Criticality | Veracity Asset Management Group

  2. Pingback: The 12 Blog Posts of 2014! | Veracity Asset Management Group

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