Supply Chain Optimization – Alarm Signal Excel?!

Excel is a widely used tool that is used in many aspects of our daily working lives. But is it also the right tool for planning and managing a complex supply chain? Those who feel addressed will already know the answer to this question.

It is still common for many companies to rely on Excel spreadsheets to create forecasts and plans and try to share them across departments. But why is this happening?

The reasons often lie in the functional weaknesses of ERP systems, a lack of knowledge about the functions and working methods of these systems and inadequate master data. This leads to various challenges:

  • Everyone often tinkers with their own spreadsheet.
  • The tables are difficult to maintain, update and synchronize.
  • The tables are susceptible to errors, manipulation or loss.
  • The tables offer no transparency, visualization or simulation.
  • The data is often outdated, incomplete or inconsistent.

These problems mean that companies do not have a holistic view of their supply chain. As a result, they are unable to react quickly and flexibly to changes, minimize risks or take advantage of opportunities. This in turn leads to high stock levels and delayed delivery times, which can affect customer satisfaction.

The key question is why many employees think they have to use spreadsheets and can’t simply work with the ERP system. On the surface, the question is easy to answer: they are not satisfied with the information and suggestions for action that they receive from the ERP system. Why employees are not satisfied is more difficult to answer and requires detailed analyses, because the interplay of requirements, forecasts, scheduling decisions and value streams in the company and throughout the entire supply chain is so complex that it can no longer be penetrated with common sense alone.

In order to achieve reliable results, we use a digital twin in our analyses. This means that the entire logistics business model, i.e. the entire supply chain concept, is duplicated in a digital format. Data from the ERP system is used for this. Analyses, simulations and optimizations can then be carried out in the digital twin without affecting the ongoing operation of the ERP system.

With the help of the digital twin you can:

  • Analyze the supply chain,
  • various “what if…” Run through scenarios and predict the impact on costs, service and quality,
  • improve the logistics business model and value streams,
  • determine and implement the optimum strategy for planning and controlling the supply chain,

and much more.

Through this simulation in the digital twin, we create: Data-supported transparency, improved foundations for decision-making, minimization of the risk of wrong decisions and thus accelerate the decision-making process.

The supply chain can thus be made more efficient, agile and customer-oriented.

Take a look at my latest interview on the topic of supply chain optimization using digital twin simulation.

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Silvia Frankenne

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