Spreadsheets are a data storage and analysis application that have outlived their usefulness and are holding your manufacturing organization back.
Why?
For the same reason, airline pilots don’t use paper maps to navigate anymore. Sure the old methods work, but pilot just wants to get to their destination. Similarly, the company manager or executive just wants to have up-to-date information on his department or company. The tools they use are only a means to an end.
So the new tools of choice for pilots are digital avionics mapping systems. For company accountants and managers, the updated solution is enterprise resource planning (ERP) systems.
Both systems are faster, easier to learn, easier to use, easier to understand, provide more accurate and much more immediate information that helps them execute to the top of their game. So let’s get back to your manufacturing organization and see why it’s time to leave spreadsheets in the business museum along with the paper-based chart of accounts and manual double-entry bookkeeping.
The Trouble With Spreadsheets
Communicating the Data
Don’t get us wrong, we are not condemning spreadsheets outright because they are good tools for many jobs, but they don’t help managers or employees see the big picture very well, and like an addictive drug, many small businesses have developed a dependence on them which is a habit that can be hard to break. Employees want to participate and be included in discussions about overall business performance at every level of the organization and yet spreadsheets stand in the way.
According to a survey of some 2000 employees in the US and UK conducted by Geckoboard and Censuswide:
- More than 80% would like their bosses to share more business performance information.
- 25% of employees have, or know someone who has, left a job because they weren’t included in or privy to the business’ performance or direction.
- And more than half of respondents said that knowing company performance data contributed significantly to their own positive performance.
Spreadsheets are not good tools for communicating company performance to the masses and are better at hiding the data rather than revealing it.
- Most employees don’t like spreadsheets because they take considerable learning and getting used to.
- Important data is hidden because you are viewing a mass of raw data making for difficult interpretation.
- Spreadsheets are difficult to analyze for lay people and the masses of data can lead to misinterpretation and poor decision-making.
- Ability to spot trends is lost because historical data is dumped to keep the size of the spreadsheets manageable.
- Spreadsheets are hard to share making collaboration difficult among many team members to know who has done what.
- Calculations are slow and are not scalable
- Spreadsheets are not scalable and cannot grow with business needs.
- Can be difficult to understand when created by others.
- Can be a huge human resources drain with all of the maintenance in creating, updating and maintaining spreadsheets.
- Data analysis is fraught with difficulty since linking data across documents is near impossible plus viewing a giant spreadsheet would take a monitor the equivalent of a Jumbotron.
IT strategist Beb Lobel, explains, “What starts as a small project in a spreadsheet often grows into Frankenstein’s monster cells. Whether it’s a financial forecast model, a marketing plan or a sales analysis… as your company develops, so does the complexity. Multiple people work on it, not understanding what’s happened before which results in breaking or misunderstanding each other’s work. Everyone forgets about the rough initial assumptions or the ‘known bugs’. There’s no way to check, test or audit it, yet major strategic decisions are made on its results.”
So Excel becomes the analysis tool that it was never designed to be.
Taking a Page From the Big Business Playbook
Certainly, there is a place for small business that is starting out where spreadsheets are valuable tools. However, for any job shops that are hoping to scale and really grow their operations, spreadsheets become a crutch that slows their progress and limits their ability to effectively manage their businesses.
The way to level the playing field and position your manufacturing organization for continued growth is to an onboard ERP solution and associated premium modular applications like CMMS for maintenance management. These magical solutions open the viewfinder for all employees in the organization to see the real-time operating results of the entire organization and giving them the key performance indicators that give them understanding and a sense of ownership in the company’s performance. Automate the processes to take out the guesswork and provide immediate feedback, reduced busy-work, and confidence in moving ahead.