Excel and other spreadsheet applications have been used for production planning for decades. Even though they are a viable first step solution for micro-companies, a growing business should already look for something more scalable.
- Production Planning with Excel – Then and Now
- Production Planning with Excel – Advantages and Disadvantages
- MRP system – a better alternative
- Key takeaways
Production Planning with Excel – Then and Now
Excel and other spreadsheet applications have been the go-to business management tool for small and medium-sized companies since the popularization of computer technology. These software solutions were a groundbreaking step from pen-and-paper methods of production planning and accounting thanks to their capacity to automate calculations and create visual representations of data.
Starting from 1979, when the first spreadsheet application was launched, they quickly became a staple in business management largely thanks to being much more affordable than the exorbitantly priced MRP systems of the day. Year by year, the spreadsheets became more complex and more detailed and it seemed like they were a completely viable option for managing a small business.
And they were.
Today, however, there exists a “but”.
As MRP systems have largely become cloud-based, more user-friendly, and more affordable by a huge margin, more and more small businesses are ditching spreadsheets in favor of these types of software. Achieving the level of integration and efficiency that we can see in ERP/MRP systems is just virtually impossible with spreadsheets. And maintaining this gargantuan amount of information in Excel makes this data highly susceptible to human errors that can accumulate over time and lead to a serious headache.
In addition, as smaller companies start to use ERP systems, their competitors often need to do the same just in order to get to the same level.
It’s not that Excel is unsuitable for managing a business. A company that is just starting out can do just fine with spreadsheets. But the larger the company becomes, the more apparent it becomes that things could be done much more efficiently, and more conveniently.
Production Planning with Excel – Advantages and Disadvantages
Excel and other spreadsheet software have been used for production planning for over 40 years, which means it is entirely possible to manage your company’s resources with them. The few benefits spreadsheets offer, however, need to be weighed against the drawbacks that come with using a simplistic solution for business management.
Advantages
1. Affordability
The main reason why companies today use spreadsheet applications is their affordability. Microsoft Excel often comes free with the purchase of a computer and Google Sheets is available at no cost at all. There are also freeware applications such as OpenOffice and LibreOffice that offer a free spreadsheet application.
2. Little training needed
Most people today already have some kind of experience using Excel or other digital spreadsheets. That means saving time and money