The usage of Excel in manufacturing is overwhelming. You might think that Excels and spreadsheets are only used by smaller manufacturing companies and startups. Think again. There is a good chance you can meet spreadsheets in a company like Apple. GigaOM article – 5 lessons I learned at Apple how to design and build hardware caught my attention yesterday. Read the article. I found it very helpful and interesting.
My favorite part of the article is related to data monitoring in supply chain. Modern global manufacturing brings the dependencies of hardware companies on suppliers to a vital level. Significant inventory write off can create a damage to a company or even take it out of the business. I captured the following passage, which speaks about tracking of key performance indicators of supply chain:
When it comes to tracking data, inexperienced startups are often overwhelmed with the amount of data and tracking options a modern-day supply chain produces on a second-by-second basis. It doesn’t take an Apple-size team to avoid most supply chain issues. Figure out what your key data points are and track those on a daily or weekly basis. Take the time up front to build reporting tools that make it easy for you or your team to see at a glance if there is a problem building. For instance, my team was able to monitor over a billion dollars of annual procurement across 22 factories using just six spreadsheets. Careful planning and foresight will go a long way towards ensuring that data can be used to proactively identify and resolve issues.
I’d say, this is should be a red alarm for PLM vendors. I can see a point when software vendors are missing focus on small manufacturing moms and pops shops. But, companies of Apple size shouldn’t become strangers and get some attention from manufacturing software vendors.
It made me think again about 5 reasons why is hard to replace Excel with PLM I outlined last year. I think, user friendliness of spreadsheets and flexibility is playing a key role why Excel and similar tools are used instead of enterprise software.
Supply chain and inventory is a complex topic. In my view, it is located on a crossroad between engineering and manufacturing. The complexity of supply chain is growing. As an example of complex supply chain and inventory complexity, you can navigate to Free.sourcemap.com – it gives interesting visualizations of supply chain (take a look on the example of laptop supply chain above).
It is absolutely important to manage inventory for every hardware company. You might think, it is something PLM has less touch with. But in a modern manufacturing, inventory management is tightly connected to product bill of materials and supply chain.
What is my conclusion? Customers have high demand for user experience and business efficiency these days. For many hardware companies, a traditional enterprise software approach is too slow. Although, larger companies are still using old fashion enterprise software, it is not unusual to see how small and agile teams are “unbundling” from large IT stacks and embark on a journey with lean and simple software tools – SaaS software, cloud services and… spreadsheets. PLM architects should take a note. Just my thoughts…
Best, Oleg
Picture credit of SourceMap
