Summary: Excel limits manufacturers because it makes it difficult to track and manage complex production data. As your team grows, it should outgrow Excel for manufacturing.
Excel powers SMBs.
And with good reason:
- Excel is an extraordinarily powerful tool for manipulating data.
- Everyone has it
- Everyone’s comfortable with it
- No training costs
- Rapid deployment.
Combined with CAD software and a shared drive like Dropbox, Excel for manufacturing provides a way for growing businesses to manage their product data.
But eventually, you reach the end of the Excel line.
And because it’s a software everyone knows…
It can be hard to give up.
But it has to be done.
Today, we’re going to look at 6 reasons your Excel systems are not up for the job of managing complex product data.
1. Collaboration among suppliers is no longer optional
Organizations must coordinate with their suppliers to leverage expertise, manage design changes, and reduce errors (and the rework costs associated with them).
This means that locally-stored spreadsheets are dysfunctional since design and production can be spread around multiple locations.
Even with Google Sheets and shared drives, delivering collaboration is difficult as version control, typos, and all-or-nothing access parameters cause headaches.
The result is an ecosystem that isn’t capable of supporting complex product data.
Inevitably, collaboration falls apart when you use Excel for manufacturing.
On top of these problems, Excel doesn’t do well with other files like images, PDFs, and scans that might be part of your workflow, making data control even harder.
2. Regulatory requirements are getting tougher
As companies grow, they encounter more and more regulatory requirements.
And more regulation boils down to this:
Who did what, when, why, and who else signed off on it?
Google Sheets and shared drives have made some inroads in solving this problem.
But generally, Excel for manufacturing means uncontrolled data.
While you can set access and edit permissions, you don’t have granular control.
If someone needs to change one part of a spreadsheet or file structure, they need the rights to change all parts of the file.
And while there is a record of the change, it’s only retroactive. There’s no real-time automatic permissions and oversight. It means that problems can go unchecked deep into a manufacturing process to where they’re expensive and time-consuming to fix.
Of course, this isn’t such a problem for small organizations. Excel for manufacturing works brilliantly when you have two engineers.
But now you have twenty. Keeping project files controlled and tracked is increasingly difficult and increasingly time-consuming, eating into production timelines and driving up the cost.
3. Excel isn’t a substitute for workflow management
Despite the beautiful Gantt charts you can build in Excel…
Excel is not a project management tool.
Excel is not a project management tool.
A Gantt Chart or similar project overview tool is a great way to get a bird’s eye view of your manufacturing process.
But it doesn’t help you move a project along, or tell you where a project is at.
Basically, it says:
this is what is supposed to happen.
When businesses need:
This is what is actually happening.
Excel as project management software says what’s supposed to happen, not what’s actually happening.
What if a change isn’t approved?
What if the approver isn’t here and is holding up the whole process?
What if the design files are versioned up but then have to go back for revisions because they’re rejected by the contract manufacturer?
Bottlenecks and iterative processes mean that businesses need a dynamic way of seeing where their projects actually are, not where they were planned to be.
If the Excel for manufacturing project overview doesn’t reflect reality:
- It’s unproductive. There’s no sense in checking where a project is if what you’re checking isn’t accurate.
- It’s misleading. Auxiliary stakeholders (sales, executives, suppliers) need up to date information on project statuses. Excel for manufacturing doesn’t achieve this, which means very uncomfortable calls to clients when deadlines get missed.
- It’s inefficient. Static overviews don’t let you easily identify where bottlenecks happen. Systems get gummed up at the same places again and again and the cost continues to climb.
4. Risk tolerance is decreasing
Mistakes as a consequence of manual errors are all too common.
Every time someone enters data into a spreadsheet, there’s the possibility of a typo, overwriting key data, mis-copying something, or putting data in the wrong place.
Basically, every time a manual process or data entry happens, it’s a micro risk.
Over time, using Excel for manufacturing adds up to a riskier manufacturing process.
Increased risk means:
- Increased cost as businesses build in waste, rework, and defect costs
- Increased time to market, since reworking, waste, and defects take time to fix.
Plus, there are all the costs associated with actually entering the data.
Every hour spent on low value-add activities like data entry is an hour not spent on high-value activities like designing new solutions or clearing engineering change requests.
Every hour that gets spent on low value-add activities like data entry is an hour that isn’t spent on high-value ones.
Especially for scaling manufacturing businesses, where teams are small and resources are tight, this inefficiency can be enough to tank profitability.
5. Excel for manufacturing doesn’t provide a master data record
If you to use Excel for manufacturing, it’s difficult to maintain a master data record, especially as your team grows.
Far more often, you end up with final creep — someone names something as a final file version, only to change it later on.
What’s more, if you’re using Excel instead of Sheets or some other cloud program, even maintaining a shared view of your product data across teams is difficult. Especially as those teams span two or more locations and Excel documents get emailed as attachments.
And this mismanagement gets expensive. Somewhere around a fifth of employee time is spent looking for information using systems like this.
So for example, say you employ electrical engineers. At around $83,000 average annual salary, you’re wasting around $16,600 just looking for the information to do their job.
That’s a lot of wastage before you even get into any other consequences of there being no master record. Consequences like:
- New changes not being disseminated to contract manufacturers correctly
- Incorrect parts being machined and then reworked
- Production delays as samples are shipped off for review, only to discover they were based on an old design.
6. You need data-driven production
It’s no longer enough to just have a good product. There’s constant pressure to get production costs down to drive better margins and lower the cost for customers.
But without accurate data on parts, processes, and systems, it’s impossible to do that.
Organized product data across all your assets in a dynamic and automatic system means you can:
- Look at a previous version of product data to jumpstart future innovation and engineering
- Identify potential problems
- Uncover cost centers.
It means that you can launch better, cheaper products — and you can do it faster with fewer resources.
But none of that is possible if you’re using Excel for manufacturing processes.
Wrap up & a silver lining
It’s clear that using Excel for manufacturing to manage your product data isn’t an effective use of time and resources. Additional tools/systems should be purchased.
The return on investment in time, risk reduction, meeting regulatory standards, and identifying and resolving bottlenecks means that even a costly alternative will quickly pay for itself.
That said, Excel and Google Sheets, and the file folder systems they rely on do have a place. There’s plenty of data that is better to store statically rather than dynamically, particularly historic production data, when ease of manipulation is more important than a dynamic record.
Find a solution for your dynamic product data that can keep everyone on the same page and designs out manual processes.
… but hang on to your Excel for historical data management to review and make improvements.
Excel should be part of the story, just not the whole thing.
Image credit: Matthew Henry via Burst