According to Eddie Groom (pictured right), Consultant at global supply chain consultancy Crimson & Co, spreadsheets are often introduced as a temporary technology to support planning and modelling processes, but typically end up taking permanent residence within an organisation, leading to massive deficiencies amongst critical business practices.
Groom states: “The world is becoming increasingly complex. As such, agile capabilities and the ability to quickly adapt to changes in global environments is becoming more and more important. In practice this might be reacting to the extremes such as Britain’s decision to leave the EU and threats of terrorism, to advances in technology streamlining critical business processes.
“Having an effective business planning strategy in place is crucial to how firms react to sudden changes and for this to be effective these strategies must be supported by the right technology – the reality, however is that this is not always the case.
“For years, one of the most common business planning tools was Enterprise Resource Planning (ERP) systems. It has been, and still is, popular within businesses looking to collect, store, manage and interpret data for a number of business activities. This can include product planning, manufacturing or service delivery as well as shipping and logistics management. Effectively, an ERP system links up supply with demand to enable better business decision-making. Traditional ERP systems tend to plan in a linear way following the rules set down and do not have the flexibility to create and manage complex supply chain scenarios.
“Arguably, inflexibility is the ERP systems’ biggest drawback and a major barrier for companies looking to flourish in modern business. Having to rely on spreadsheets and programmes like Excel to manage supply chain models, scenarios and unexpected events should not be acceptable to businesses that need robust, auditable planning tools to comply with essential business processes.
“ERP systems can be slow to update or make changes to in reaction to fluctuating market conditions or events. If supply routes need to change following a disaster, for example, or old trade agreements can no longer direct freight transport, businesses leaning on ERP systems can find themselves on the back foot. A continued reliance upon spreadsheets as a serious planning tool prevents a firm from rising to challenges.”
Logistics is not the only business department suffering due to the limitations of the spreadsheet. Industry research suggests that pain-points are also felt in other departments notably finance, with 80 per cent of CFO’s reporting failures in their planning processes due to spreadsheet usage.
Groom states that the start of a new year provides an opportunity for organisations to take stock and turn over a new leaf when it comes to implementing more effective technologies in order to manage their planning processes.
“Advanced Planning & Scheduling (APS) systems offer significant advantages to managing supply chain complexity over ERP systems alone. Moving away from spreadsheets and into an adaptable modern supply chain planning tool, allows you to handle any variations, provide better visibility over your suppliers and handle more product routes and options. Doing so, will allow firms to optimise their supply chain to achieve desired business objectives. In short, businesses supported by APS systems can act quicker to changing global environments since they have greater information, oversight and options available to them.
“Ultimately, good planning cannot consist of programmes which are widely open to error and instead it is imperative that organisations implement suitable technologies to systemise critical business processes. APS systems are an example of a solution best placed to handle this level of intricacy within the logistics process, whereas the spreadsheet is an example of a technology no longer suitable for this process.”