Streamline your global supply chain: Ditch spreadsheets in 5 easy steps
Although spreadsheets have long served as the standard management tool for supply chain teams, the rigid and unforgiving traits of these multi-author files revealed critical version control and inaccuracy issues. This ultimately exposes global supply chains to a great deal of vulnerabilities. From a recent survey produced in partnership with the Council of Supply Chain Management Professionals (CSCMP), 78% of companies currently use spreadsheets to manage their supply chain. However, the need to replace outdated IT systems and to remove existing silos was identified as the overall critical next step for the industry’s key players. As both regional and global operations strive to acclimatize to a rapidly changing and increasingly volatile world trade market, it is clear that spreadsheets are prime for retirement. You don’t want your organization to be stuck in the past, still dealing with tedious challenges, and surpassed by your competitors.
Spreadsheet limitations exposed by the pandemic
The COVID-19 pandemic drove supply chains into turmoil, with a categorical shift in consumer demand patterns that congested ports, inflated spot rates, that led to closer FMC scrutiny. With logistics and operations teams overstretched, customer service teams were substantially unprepared for a situation that did not reflect service levels forecasted for the year’s operations.
Amidst such a congested shipping season, managers could not rectify errors with basic visibility, leaving supply chains upended in part by severe spreadsheet oversights. As a result, key decision makers could not manage the chaos of the pandemic and the industry collectively recognized the need to evolve into a digital era that manages logistics at a rapid rate of change. Based on this perfect storm of variables, the pandemic served as a catalyst to propel supply chains into a vastly different competitive landscape for the digital era.
Key issues of using spreadsheets to manage your global shipments
Management distractions and lost resources. Spreadsheets demonstrate their value as static snapshots of your company’s usage patterns and forecasted trends. However, they are a labor-intensive management system that reduces workplace efficiency as employees manage their time between assessing data and reacting to actualized operational issues in real-time.
In a 2018 study, Freightos research cited that nearly 50% of US businesses use spreadsheets to manage their international supply chain. Within that said, over 60% of mid-size importers waste anywhere from 20 to a staggering 500 hours per year from managing shipments manually, a figure that approximates to 2-5 hours of administrative labor allocated per individual shipment. This daily scenario pulls focus from a manager’s revenue generating activities and further delays response times to critical shipment delays. Here, a manager is restricted from sourcing for opportunities to create solutions, negatively impacting the bottom line.
Unintended assumption of risk. Spreadsheets are designed to be managed by a primary author who maintains full access and capabilities. Due to the nature of spreadsheets, information is siloed amongst team members, hindering collaborative corporate cultures and progressive team dynamics. Additional bookkeeping creates paper trails for purchase orders and supplier agreements, which further increases chances of human error or misplacing your data entirely.
To this end, it is near impossible for a manager to ensure accuracy as users replicate master files and copy to their own devices, wherein the original asset no longer serves as a single source of truth. At this stage of a company’s evolution, there is an assumption of risk in continuing workflow processes through such manual tools.
Limits capacity to scale. Mapping various channels in your supply chain over an intricate network of worksheets becomes increasingly difficult when applying them to a network of internal teams. Compounding the work environment further, a broader network of transportation, material and service providers across geographies must be accounted for in a company’s manual tracking tools. When considering the dynamic movement attributed to each component, a spreadsheet simply fails to serve the best interests of the supply chain’s potential for growth.
Operating within a tool that invites an increasing margin for error leads to pipeline inefficiencies and delays the opportunity for process improvement. In this, the capacity at which a company can grow at scale is limited to the functional performance of its best management tools.
5 steps to digital supply chain management
Retiring spreadsheets and graduating to the next step in digital innovation provides live insights into your global supply chain, including real-time visibility of critical stockouts and shipment delays that occur at ports, warehouses and loading zones. To get there, the following five steps must be taken:
- Map and document your end-to-end process
- List your partner network of carriers, freight forwarders, and customs brokers
- Establish a data model and set up a database
- Set up connections
- Create a visibility dashboard
Depending on the complexity of your supply chain, the size of your partner network and the existing competencies in global logistics, IT and data management of your company, you should allow sufficient time to carefully carry out each individual step. Alternatively, you can also look at existing vendors of digital supply chain platforms on the market and evaluate for yourself whether this might be the faster and ultimately more cost-effective alternative.
Supply chain leaders from the CSCMP agree that prioritizing customer service is imperative. In their view, the most important measure by which to achieve this is to implement tools for real-time visibility of orders, shipments, and inventory to serve as the critical key to a company’s longevity.
While manual spreadsheets may have worked in the past, many supply chain leaders agree it’s time to turn a new page. The management of a supply chain is inherently complex, and the world of supply chains is garnering more volatility every day. This harsh reality calls for a change, and the challenges listed above clearly demonstrate why. By sticking with management through spreadsheets, your supply chain will stay stuck in the same cycle of distractions, loss of resources, unintentional assumption of risk, and an overall lack of capacity to scale.