They still use Excel.
We’ve known for over a decade now that errors in spreadsheets are pandemic. Needless to say that it boggles my mind that Microsoft Excel still continues to be the application of choice for supply chain and logistics managers around the world. Why do we need to remind you that Fidelity lost 2.6 Billion as a result of a spreadsheet error, that Fannie Mae made a 1.13 Billion honest mistake with a spreadsheet, and RedEnvelope lost more than a quarter of their value in a single day after they warned of a fourth-quarter loss due to a spreadsheet-based budgeting error that resulted in an overestimate of gross margins.
How long is it going to be before someone accidentally uses a plus sign instead of a minus sign in a profit formula and forgets to uncap an inventory calculation and instead of ordering 100,000 units of a profitable product, instead orders 1,000,000 units of a product that actually results in significant losses at the target sale price, for which the market demand is weak, ties up all of the organization’s working capital, and essentially bankrupts the company?
My guess, with the steadily increasing complexity of S&OP, JIT inventory management models, and supply chains, any day now! But, maybe after a few companies are brought to their figurative knees from spreadsheet errors, we’ll see the day when Excel is sh!tcanned along with the dinosaurs who still think it has any more use than a HP or TI calculator.
It’s time for anyone still using Excel to wake up and realize we don’t live in Walt Disneyland and that the story of the prince and the pauper is a fairytale. A pauper is not going to become the benefactor of princely riches by trying to save money on real supply chain and logistics software by stretching Excel to the limits just so that it can temporarily inflate the balance sheet or the profit and loss statement. In today’s uber-connected world, appearances don’t account for much. It’s not long before someone digs deep and uncovers the truth.
There’s a reason why customers are demanding end-to-end visibility of their supply chains, including those of their supply chains logistics’ partners. And a reason customers ow expect all of their suppliers and business partners on the supply chain (including logistics providers) to participate in a supply chain network. It’s because they know that the only way they can accurately manage their supply chain is to keep on top of it, that the only way they can build accurate models is with accurate data gathered from partners, and that the best reports they are going to get are going to come from supply chain visibility and planning software plugged into these “networks” (where, in reality, these are “enterprise communities” that allow the necessary collaboration, not “consumer [social] networks” where you can poke, prod, and shake your buddy for no apparent reason).
In other words, Excel has become the new paper, and, like paper, it needs to be abandoned. So if you don’t want to be the pauper, move off of this outdated technology and onto solutions designed for your supply management needs. With a plethora of Best-of-Breed solutions on the market, including modern Source-to-Pay solutions, designed for large and small providers, it’s extremely likely that there’s at least one solution that meets your needs almost exactly without too much tweaking. If you look hard enough, the doctor would bet that there’s at least three, or will be before you can look twice