Managing your supply chain involves many moving parts — inventory management, freight services, and shipping all tie into your logistics planning. When you try to put these different elements together, you need some sort of tool or software to help you achieve your goals.
For many businesses, Microsoft Excel is that tool and has been for years. Why? Primarily because it’s a low-cost spreadsheet. But if the past few years have taught us anything it’s the disastrous impact bad supply chain management can have on your business. So even though it’s cheap, Excel certainly isn’t the best solution for managing supply chain logistics’ many moving parts. Especially when you consider the sheer size of business’ global supply chains today: Anvyl research shows that 50% of SMBs report using 26 or more suppliers, with 37% using 50 or more.
In this blog, we explain why exactly Excel isn’t fit for today’s fast-paced and constantly fluctuating supply chain, before providing readers with a better alternative for managing supply chain logistics.
First, let’s give a quick overview of how organizations are using Excel to manage supply chain logistics today.
How Is Excel Currently Used for Supply Chain?
Many businesses rely on Microsoft Excel to track and manage their supply chain. Excel offers several filtering tools and an essentially endless number of rows, columns, and tabs for organizing supply chain records. A sheet might have columns for:
- Supplier name
- Address and contact information
- Product
- Order quantity
- Order price
- Date ordered
- Date expected
- Date delivered
Some businesses even use an Excel template for stock management, inventory control, and supplier tracking. The main reason that companies will use Excel is the cost. Excel comes in the Microsoft Office package and is much less expensive to roll out among team members than other supply chain management tools.
Excel provides some helpful business features, like filtering and easy functionality. However, Excel has some very serious drawbacks that limit its functionality and make it a poor tool for supply chain management, and businesses still using it are getting left in the dust by more agile competitors with better solutions. (But more on that later).
The 6 Limitations of Using Excel for Supply Chain
While Excel certainly has its place in many tech stacks, the supply chain isn’t the best use case. Businesses need flexible, intuitive functionality from their tools to help their operational strategies keep up with changing times — and Excel doesn’t check that box.
Here are six reasons why.
1) No Real-Time Updates
One of the biggest challenges that Excel faces is the lack of real-time data tracking and updates. Everything in Excel needs to be put in manually. Even though there are keystrokes and shortcuts you can use to reduce some of the manual labor, there is still an immense amount of time and effort that goes into keeping Excel spreadsheets up-to-date and accurate.
That doesn’t always work in the world of logistics, where situations can arise, and factors can change in seconds. If your supply chain management tool can’t keep up with those demands, you will find yourself missing important information and falling behind on your business goals.
2) Open Security Risks
Another major problem with using Excel is its supply chain security risks. Excel spreadsheets are unsecured documents and will often contain valuable and sensitive data if they are the main tool used for supply chain management. You cannot guarantee security to your suppliers and logistics providers if you aren’t using a tool that provides additional protections for confidential data.
You want to make sure that you protect the data you are entrusted with, and Excel isn’t the best tool to do that. Laptops and phones can be stolen, and passwords can be hacked, so you’ll need extra security measures to ensure your supply chain data is safe.
3) Prone to Inaccuracy
As mentioned earlier, Excel requires a lot of manual data entry to update and control. That leads to a significant rise in the risks of inaccurate data. Even a single cell with incorrect information can throw a wrench in your entire workbook. Part of developing a solid logistics strategy is ensuring that the system you use can verify data and flag inaccuracies to eliminate human error.
4) Messy Master Data
Master data is the essential data used to run your business. In the supply chain, this includes information like product codes, customer codes, location codes, and supplier or vendor codes. These foundational building blocks of your supply chain need to be organized and processed consistently. Using Excel to manage your master data leads to messy entries, invalidated data, and, over time, more master data errors.
5) Impractical for Big Data Sets
As your business grows and your supply chain becomes more diverse, you will need to process more and more data. All of these big data sets can get lost and confused when they accumulate in an Excel sheet. Excel can slow down significantly when trying to process large data sets, leading to your entire supply chain process slowing down with it.
Excel also makes it hard for businesses to organize and display relevant data. Excel doesn’t have dashboard templates in place to make it easier to display relevant data. Instead, users have to apply their own filters and rely on Excel’s extremely inefficient search function to find what they need.
6) Unfavorable to Collaboration
Finally, the last major limitation Excel sheets have is their lack of collaboration tools. Microsoft Excel wasn’t designed with collaboration in mind, and as such, it doesn’t offer team views or collaboration opportunities. Instead, teams must share the same base document with their colleagues, who make their own edits and hope that it matches what other team members are doing on their computers. The alternative is sharing the master document in a shared internal network and hoping that no one screws it up (or deletes the document by accident). Of course, this method is inefficient at best and grossly irresponsible at worst.
Collaboration has incredible value in the workplace, and you will fall behind without the right tools to help give you a more integrated and innovative solution to workplace cooperation. When multiple people can work on your supply chain strategy and management at the same time, it leads to much better results.
What You Should Use Instead: Supply Chain Management Software
It’s clear that Excel doesn’t cut it when it comes to managing your supply chain and logistics. You need a tool that can outperform Excel and give you the supply chain management solutions you need to succeed. That’s where supply chain management software comes in.
Supply chain management software manages the movement of information, goods, cash flow, data, and orders throughout your supply chain processes. It handles every touchpoint in your supply chain and provides the software tools needed to perfect and optimize your supply chain. Most SCM integrates with other tools essential to your business, like your ERP or CRM, and provides advanced analytics for tracking metrics and KPIs that Excel can’t match.
Supply chain management software can mitigate all of the Excel limitations listed above. The software works as your logistics manager and ensures that everything from air freight brokerage to customer satisfaction is tracked, monitored, and collected into a single tool.
Increase Supply Chain Visibility With Anvyl
Gaining visibility into your supply chain is an essential part of successfully managing and growing your business. When you use an ineffective tool like Excel to try and take shortcuts around paying for more advanced software, you won’t be able to accurately manage your suppliers, order tracking, warehousing, or delivery services.
Anvyl is a supply chain management software tool that goes above and beyond the capabilities of Microsoft Excel. Anvyl helps you standardize and optimize the supply chain process with advanced reporting, order status tracking, and streamlined operations. To learn more, get a demo from Anvyl today and see how we can make a difference for your business.
