The electronic spreadsheet was the “killer app” that brought the personal computer out of the techie’s workspace and onto the desks of virtually every accountant, manager, planner, information worker and executive throughout the business world. And the spreadsheet changed the face of business, allowing decision makers unprecedented access to data, and organizational and analytical tools to unlock information and intelligence like never before.
The Dark Side Of The Spreadsheet
Yes, the spreadsheet is a marvelous tool, but there’s a dark side, too. Spreadsheets have become such an integral part of everyday life in the office that a user can easily become complacent. After all, if it isn’t broken, don’t fix it, as they say. It is possible to develop a complete arrangement for what to make, where and when, for a multi-site manufacturing enterprise, that satisfies customer demand… on a spreadsheet. I’ve seen it done. And the arrangement (I hesitate to call it a plan) can be executed and the customers satisfied. So, what’s the problem?
When Things Get Complicated
Spreadsheet-based “planning” is simply an exercise in basic math – subtraction, multiplication, etc. – with no real logic applied. It merely executes the formulae the user built into the grid. And that may be adequate in a simple situation with one-plant, few products, and few customers. But the spreadsheet is not really doing the planning, it is just organizing the data and performing a few calculations. The planner (person) does the real planning when he or she manipulates those quantities and dates to balance things out and remove the conflicts and inadequacies. And most planners are very good at their jobs. But there is a limit to what even the most experienced and talented planner can handle. When things get complicated, as the company grows and the supply chain becomes more complex, and as conditions change more rapidly every day, planners are expected to do more and more and the impact of an error is escalating as we strive for leaner more efficient operations.
The difficult question is this: at what point does the complexity of the job exceed the ability of the human to do it effectively without the right tools – a modern optimization-based planning systems? Sadly, there is no definitive indicator and most companies will not recognize the need until considerable harm is done or significant opportunities lost for the business. So the real question should be not “when do I have to (upgrade the tools)” but “how can the tools improve performance and customer service, even before the company is damaged by sub-par performance?”
The essence of manufacturing operations management is to put available resources – people / skills, machines, inventory, capital – to use effectively to produce the products that customers want. And that’s the purpose of a planning system. The most basic planners (MRP) help you develop a master schedule of what to make when, and lay out a purchasing and production plan for making that happen. Then a capacity planning function identifies any conflicts or resource issues (over or under-commitments) so that planners can adjust the schedule or make other accommodations to ensure that the plan can be completed. So-called advanced planning systems (APS) plan materials and capacity simultaneously, developing an overall plan that fits within the available production capabilities.
Today’s most advanced planners plan use simulation and machine learning to develop an optimized plan that provides the best possible combination of resource and, material use that is tied to actual experience (performance), and the status of ongoing activity in the plant, providing the best and most accurate plans and schedules.
Is a modern planning system really necessary if you are currently planning using spreadsheets? Think of it this way: you wouldn’t expect your planner (or any other employee) to walk 5 miles to work, even if they can, because it is not efficient or effective. Cars, Ubers, and perhaps public transportation are widely available and affordable. You can walk for exercise, if you are so inclined, but getting to and from work is just too important for such a time-consuming and unreliable choice. Using the right planning tools can literally save your company by enabling effective use of resources, on- time completion of work, reduced cost, and great customer service.