5 Reasons Why Excel is Champ of Supply Chain Apps

Earlier this month, I participated in the CONECT 12th Annual Northeast Cargo Symposium where I gave a talk on Hours of Service and shared some words of advice with CONECT’s Young Professionals group, which had their own session at the conference. During that session, a young professional from a medical device company gave a great presentation about free trade agreements — what they are, why they are important, and how to use them effectively as part of your global trade operations.

During the Q&A session afterwards, a young professional seated next to me asked the presenter if she was using any type of software at her company to manage free trade agreements. “No, we use Excel,” she said. “We bring in attorneys and trade experts to help us understand the regulations and develop the formulas, and we just enter everything into Excel. I wish we had some software designed specifically for trade, but it’s not something our company has decided to invest in yet.”

The young professional who asked the question, who works at a leading toy company, replied back, “Yeah, we use Excel too.”

So, here you have two leading companies in their respective industries, managing a highly strategic and risky supply chain process, with Excel spreadsheets.

Why?

Part of the answer, I believe, is that some companies still view certain aspects of supply chain and logistics as “cost centers” and, therefore, rank them low on the IT priority list. Historically, trade compliance has fallen in this category, with some companies viewing it as simply paperwork. This “cost center” perception was certainly more prevalent 10-15 years ago, but it persists at some companies today, regardless of size.

Aside from that, I believe there are five main reasons why Excel remains the reigning champ of supply chain applications:

1. It’s is easy to learn and use. If you can type numbers in a cell, have some basic math skills, and can cut, paste, and insert, then you’re 90 percent of the way toward using Excel effectively. You can learn everything you need or want to know about Excel in a few hours, whereas learning to use a supply chain application might take you weeks or months. And you don’t need a PhD to use Excel — or even a college degree, for that matter.

2. You can quickly and easily configure it to your specific needs and preferences. Excel, so blank and empty when you first open it, is the ultimate in user configurability. If you were to give ten transportation analysts each a blank Excel spreadsheet and asked them to start using it to manage their day-to-day activities, you would end up with ten unique-looking spreadsheets. Some analysts might prefer to have costs on the x-axis, while others would prefer it on the y-axis. Some analysts would create bar charts to analyze the data, others would create line graphs and pie charts. Some would opt to keep the spreadsheet simple, others would develop complex macros. Simply put, Excel allows users to define and create their own user interface, and to work the way they want to work instead of having to conform to a pre-built and fixed approach.

3. It’s highly portable: you can use it almost everywhere, and share it easily with others. Wherever there’s a computer — at work, home, school, library — there’s likely a copy of Excel on it. Export data from your enterprise app to Excel and you can work on it almost anywhere. And if you want to share the spreadsheet with someone, just attach it to an email. Sure, the cloud and mobile technologies are making enterprise applications more portable today too, but Excel was the original portable application, and old habits die hard.

4. It’s ubiquitous: Almost everybody has it and knows how to use it. You can email a spreadsheet to a supplier, customer, partner, colleague, or anybody else, and it’s almost guaranteed they’ll be able to open it — and they’ll know how to use it too. In contrast, if you ask suppliers and customers to use a Web portal or online application to provide you with information, you would need to train them first on your system. And if 100 companies ask your trading partners to use their portals and applications, that’s 100 different systems they would have to learn. Excel, however, is the common denominator of software applications — everybody has it, everybody knows how to use it.

5. It’s inexpensive. Sure, software-as-a-service and cloud applications are more affordable than traditional enterprise apps (at least the upfront costs are lower), but Excel is still at least an order of magnitude less expensive than most SaaS applications.

Of course, Excel has some significant drawbacks that limit its usefulness and value as a supply chain application, such as…

  • You’re working with static data
  • A macro is not the same as an optimization engine
  • It’s not integrated with execution tools
  • You often end up with multiple versions of the truth

The bottom line is that enterprise software vendors should take a lesson from Excel and make their applications easier to use and learn. They should also invest in enhancing their user interfaces, make their applications easier to access from anywhere, and make them more affordable for the masses. As I wrote about yesterday, enterprise software users are gaining power and influence in selecting the solutions they want to use at work. And what they want to use looks more like Excel (and Facebook, Google, and iPad apps) than what enterprise software vendors have traditionally offered.

Comments

  1. It’s hard to beat Excel – it’s a big part of what makes modern data analysis so popular. No matter what you think of Microsoft, they did something right in getting a standardized spreadsheet program distributed so widely. The economist in me would argue that the private market did a great job setting the standard for a data analysis app.

    Because Excel is so useful in so many circumstances, I counsel with my friends to learn how to use it better. The friends I know that can use Excel really well have quickly moved up in their companies – especially in supply chain and logistics roles.

    Great list – it’s nice to know others are using Excel just as much as my company.