The Perils of Using Excel to Manage the Supply Chain Process

Excel has many advocates as a system for the development and implementation of supply chain processes. At first glance, it is extremely attractive – a flexible application that many people know how to use. It is portable and the cost of ownership is negligible (http://logisticsviewpoints.com/2013/11/20/5-reasons-excel-champ-supply-chain-apps/).

However, this ease of use and ubiquitousness comes at a cost. As with any product that offers an initially short learning-curve, Excel becomes extremely complicated to use and maintain in the mid- and long-term development cycles. Problems include:

Performance – Excel runs on a single desktop or laptop. As such, its ultimate performance is limited by the device and it cannot take advantage of distributed (cloud) computing.

Development Sprawl – Development of an application in Excel is usually ad hoc with a single expert developer working part-time on the project. Adequate documentation is rare and version control non-existent.
Code and Data Comingled – Is that a formula or a data cell? There is almost nothing to protect data cells from being overrun by formula cells and vice versa.

Isolation of Calculated Results – These are stored in just one place in the workbook and are often the result of other cascading calculations. Thus changing an intermediate step can cause widespread changes throughout the workbook.

Scoping – What formulae have access to a given cell? Which ones can change its contents (and how would you know)? An object oriented language such as C# utilizes a core principle of encapsulation, which is all about the exposure (and protection) of data. Although spreadsheets have rudimentary methods of data scoping (protected cells, separate worksheets), they are seldom used.

Transactions – Excel does not have a built-in mechanism for recording changes to data and formula cells. This means that changes do not comply with ACID standards (http://en.wikipedia.org/wiki/ACID). If a large spreadsheet is in the process of updating and Excel crashes, can you reliably restore it to its pre-update state?

Poor Security in Older Versions of Excel — From Wikipedia: “Currently, the 40-bit key protection used in Office 97–2003 can be easily cracked by the password-hacking software. The 128-bit key AES protection employed in Office 2007–2010 can still be considered as a relatively secure one. At the moment, however, cloud computing facilities are capable of unlocking a substantial number of the files saved in the Office 2007–2010 format.”
Corporate password and security policies may not apply to desktop applications such as Excel, meaning that strength, frequency of password change and other standards are not enforced.

Flexibility and Scaling – If the supply chain process changes, how can the code and business logic be changed with assurance? Excel has many “nooks and crannies” in which to hide data and formulae.

Conclusion
For small and even mid-sized solutions, Excel has many strengths and advantages. However, the same elements that make Excel so attractive in these situations proves to be a critical flaw for large scale projects. Companies with sizable logistical planning requirements need to look to more formal and distributed solutions for long-term sustainability.

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