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Are Spreadsheets Sinking Your Supply Chain Analytics Efforts?

November 14, 2013BY AMS Editor

Many distributors are behind the curve when it comes to supply chain analytics.

They continue to use outdated technology despite the availability of powerful new enterprise software that can leverage data to increase efficiency and improve operations. Surprisingly, this is a common phenomenon.

According to an article on the Data Informed website, nine out of 10 companies struggle with improving the performance of their supply chain, and that’s in large part due to poor analytical capabilities.

“Despite 30 years of supply chain technology evolution, the most commonly used system for supply chain planning is the spreadsheet,” the article says.

There are several important points made in this article as it relates to the use of analytics in the supply chain. Those include the use of the wrong tool — namely Excel — and analysis that is limited to the data in ERP.

Using spreadsheets to do business analysis is simply a bad idea. With Excel, almost anyone can author the tools being used to make critical business decisions. With Excel-based analytics, there really is no assurance that the tool has been thoroughly tested and that the results are reliable. Companies are essentially relying on software tools in the form of Excel that were authored by an individual.

Compare this with enterprise software development, in which analytical tools are produced by a team of analysts, programmers and testers, and you can see that the latter is most likely a more reliable tool.

There’s no reason to use Excel for business analysis. Today’s applications are becoming increasingly cost-effective and are far more powerful than any spreadsheet.

The second point made by the article is that companies need to use more enterprise-class tools that consume not only all of the data in the enterprise, but also the unstructured data from social channels.

There are some interesting tools currently on the market. One of these is the SAP HANA platform, including its in-memory database. One major benefit of this technology is that any attribute on any table in the database is immediately available for real-time analysis. This is important, because users are immediately empowered to analyze the data in the ways they see fit. There is no need to call in IT resources to author reports and perform analyses.

SAP is currently migrating all or parts of its ERP solutions to this platform. It will be interesting to see what new business efficiencies spring from this change.

The bottom line is that times have changed, and wholesale and retail distributors need to adapt by implementing today’s technology solutions in order to produce better and more reliable supply chain analytics.

Source: Data Informed, September 2013

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