Moving Beyond Spreadsheets for Responsible Supply Chains
April 20, 2018
I love Excel. There, I said it. It is an incredibly powerful, versatile tool that I’ve used for everything from finance to carbon modelling. With such a powerful tool, there is a temptation to use it for almost every business need.
When it comes to supply chain data collection and for achieving responsible sourcing goals, most companies start with an Excel-based assessment that is sent out via email to a few key, strategic suppliers. This is a common first step that enables buyers to not only get some information from their suppliers, but also to understand the kinds of data suppliers can provide and adjust assessments accordingly.
However, just as no large business runs without a CRM, finance platforms, or HR platforms, for supply chain visibility spreadsheets do not scale, nor do they enable top-line value. Purpose-built platforms for supply chain data management go beyond data collection, and enable benefits beyond manual spreadsheet replacement.
The burden of managing data about multiple suppliers at multiple tiers of the supply chain becomes overwhelming in Excel beyond a few dozen suppliers. The workload cost of supply chain data management without specialized tools equals at least 3 hours per assessment per supplier per year for even a basic assessment. This includes manually sending the assessments, tracking responses, sending reminders, receiving the information, integrating information into some master data record, and creating analytics and reports.
Moreover, by the time these companies have managed to figure out the puzzle of data capture and analysis, it’s already time for them to start collecting again for the next reporting period, precluding meaningful post-assessment supplier engagement. The end result is a focus on data collection and reporting, rather than on solving the ultimate issue of delivering more responsible products.
Why ensure transparency and supplier engagement in the supply chain? As the markets change, and consumer preferences evolve, it has become paramount to ensure that supply chains are free from human and environmental exploitation. The impacts to brands from news stories focused on problems in supply chains ripple across industries and geographies. All of them are a result of a lack of visibility within the organization.
A lack of resources for supplier engagement creates a reactive approach for supply chain responsibility, which is no longer sufficient. By the time the supply chain manager is able to identify the issue, it’s all over Facebook and Twitter. While one-way data collection efforts may have been sufficient in the past, they can’t work in today’s environment. The speed at which information moves is so fast that it’s essential for businesses to regain control and visibility of their supply chain. By the time Excel spreadsheet data is used, it is already outdated. In many cases, companies delay implementing information management at scale entirely, relying on the top supplier data collection efforts alone, thereby likely exposing the companies to unnecessary risk from smaller suppliers or suppliers beyond the first tier.
Often, long-term reliance on spreadsheet-based systems results in substantial sunk costs. By the time companies understand that large scale supplier risk data collection and analysis, commodity traceability, and supplier engagement are breaking their spreadsheet-based systems, they frequently have amassed a large amount of data. Some of our customers have admitted to us that their old Excel data are unusable: too much data cleaning and formats that aren’t conducive for analysis at scale make their job impossible.
False visibility is probably the most frustrating issue that results from Excel data collection. Often our customers come to us with data they’ve collected that they spend time to load into SupplyShift only to have them realize that the data they thought they had was incomplete or erroneous after the SupplyShift upload: Excel doesn’t provide ready tools for clearly identifying gaps in data collection. In addition, Excel decentralizes communication structures for supplier engagement through the use of email, CRM, and other tools, resulting in a lack of status tracking and visibility to meet assessment goals.
This is precisely why supply chain digitization and supplier risk management tools are quickly becoming popular alternatives to Excel. They can handle multiple streams of supplier data in one place; additionally, some offer tools for mapping, scoring, and engagement. From total spend to sustainability, and social responsibility to code of conduct compliance, modern technologies can drastically simplify the herculean task of creating transparency within large supply chains, leaving more time to focus on improvement.
At SupplyShift, we work to help companies eliminate challenges like these every day, and we’ve built a flexible, cloud-based SaaS platform to help facilitate the transition to smart information management. Our mission is to help companies go beyond the spreadsheet, and not spend all the effort on data collection and analysis. We’ve transformed scores of Excel workbooks and toolkits into simplified, scalable solutions that allow our customers to focus on what matters: using information to address risk, foster effective supplier relationships, and drive progress across their entire supply chain.
April 20, 2018