In the fall of 2020, in the midst of the global pandemic, a spreadsheet error resulted in the Public Health England underreporting COVID-19 infections by 15,841 cases.
Here’s how the error resulted: while a comma-separated-values (CSV) file can be any length, an Excel spreadsheet is limited to a little over one million rows. When the agency’s very long CSV file was opened in Excel, the file exceeded the limit, so the bottom rows were cut off and not displayed. As a result, many people who tested positive were not informed and did not self-quarantine to help stop the spread of the virus.
The true impact of this error is unknowable, although even one death related to the error would be egregious. However, the incident does serve as a reminder to manufacturers that relying on spreadsheets – which are often prone to error – can have far-reaching consequences.
Currently, many manufacturers still utilize spreadsheets in critical aspects of their operations, including production, inventory, supply, and quality. It’s important to be aware that as harmless as spreadsheets may seem, mistakes can occur with profound repercussions.
The Rise & Fall of Spreadsheets
Spreadsheets have gained traction because they’re easy to use in terms of tracking data and performing simple analysis. Arguably, spreadsheets run more business processes than any other software in the world.
When companies are starting out, spreadsheets provide an affordable solution to diverse business needs. Problems arise, however, when business processes become more complex, pushing spreadsheets beyond their intended use. For example, companies might see a significant increase in demand and volume; multiple stakeholders may need to access and update data; and data integrity, security, and controls may become vital to compliance.
In these scenarios, companies risk a breaking point with spreadsheets. Interestingly enough, this dilemma also occurs within large companies, as they often have a mish-mash of on-premises legacy systems, solutions coming from acquired divisions, and even disconnected cloud applications. Companies often use spreadsheets to paste together, connect the dots, or plug holes among these various systems.
Going Beyond Spreadsheets with Digital Enterprise Solutions
Although industry pundits have called for digital transformation, spreadsheet-centric processes must be prioritized. Many manufacturers are relying on these tables for critical planning and decision-making, a tall order given the history of spreadsheet blunders both big and small.
One need only perform a Google search to unearth the many missteps made with spreadsheets. Studies claim that as many as 88 percent of all spreadsheets contain errors. Although this analysis dates back to 2003, the rate probably hasn’t changed much, as slip-ups are most often tied to human error.
What follows are common uses of spreadsheets in manufacturing, as well as examples of how companies moved beyond spreadsheets with digital transformation strategies:
Inventory Control. One multinational organization had been using spreadsheets to manage inventory across a dozen or so warehouses. It also tried to use its spreadsheets to anticipate demand and manage distribution to more than 50 countries.The organization decided to streamline this convoluted process through a series of digital transformation initiatives. First, it upgraded its customer relationship management (CRM) capabilities, then its enterprise resource planning (ERP) functions. It utilized a single cloud platform, which provided a dashboard to view all inventory. All told, these solutions provided an enterprise-wide perspective on demand in various regions and made it easier to shift inventory between warehouses to meet demand.
Supply Chain Management. Although spreadsheets are often used to monitor a manufacturer’s supply chain, today companies need a real-time, big-picture outlook.
One international organization previously coordinated its global supply chain via spreadsheets. It cut and pasted requisitions into individual supplier spreadsheets and emailed them out. A master spreadsheet tracked overall supplier performance. The problem was this process was tedious, prone to error, and often related outdated information.
The organization digitally updated to a cloud platform, where it built an online community as well as leveraged real-time dashboard assessments. Now, the supply chain is managed via real-time communications and collaboration. The dashboard shows production forecasts and individual supplier performance. The organization quickly grasps the overall health of its supply chain and underlying activity.
Quality Control. Every manufacturer is subject to governmental rules and regulations regarding quality and safety. Quality management is particularly important in industries like medical device, aerospace, and auto. The problem is quality must encompass so many different areas: design, manufacturing, customers, supplier management, risk management, complaint handling, distribution and more. As a result, manufacturers often end up utilizing different point solutions to manage quality. Within this mix, many use low-tech options—such as spreadsheets—to house standard operating procedures (SOPs).
One medical device company housed its quality management system – including spreadsheets to track SOPs – on a shared network folder, but this process was fraught with issues. In a series of digital initiatives, the company upgraded its ERP to track and trace complete product history. This allowed the company to get to the root of any product issues and complaints. It also employed an electronic quality management system (EQMS) to ensure safety and compliance with FDA regulations. Ultimately, quality for this company now embraces a total digital approach.
Digital Transformation into the Future
The aim of digital transformation is to connect people, data, and systems to enable greater collaboration, efficiency, and insight. In many ways, spreadsheets have held companies back from these objectives. The examples discussed here illustrate that it’s possible for companies to leave behind their problematic spreadsheets.
With the pandemic, companies realized they needed a digital enterprise to enable remote work, and as conditions evolve, it’s important to have the agility to continually adapt. Toward this end, digital solutions have low- or no-code configuration, so it’s just as simple to setup as spreadsheets, but with governance guardrails that ensure the core design is not wrecked. And with an end-to-end view of data, companies can uncover opportunities to deliver better products faster and more affordably, thus gaining a competitive edge in today’s difficult times.
Written by Tom Brennan, CMO of Rootstock Software, strives to build awareness of the operational challenges manufacturers face and how they can leverage digital enterprise solutions to grow and manage their businesses. With more than 30 years of experience in enterprise applications, Brennan is a frequent speaker at industry events and a thought leader contributor to many trade publications. He focuses on topics such as the cloud, customer-centric business applications and enterprise software trends.