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8 Reasons Why Excel is Restricting Your Capacity

Are you using Excel to manage your factory? You’re not alone. Excel has dominated manufacturing for years… and years… and years. We’re not new to this technology thing. Shouldn’t your technology grow with your company? It’s time to kick Excel to the proverbial curb. Especially because Excel is severely limiting your capacity, wasting your time, blocking your progress, and stopping you from growing. Do you want to know the 8 reasons why?

  1. In most organizations, 1 person compiles and organizes the report. When that 1 person is out sick or on vacation, no one gets the report… at least not in a timely manner.
  2. Speaking of, manual reporting doesn’t provide timely access to the information. You only know what the report is telling you after it’s compiled. At a minimum that will take 24 hours, preventing you from reacting to something now.
  3. Data that goes into the spreadsheet is usually collected manually from paper, which is also a manual and tedious process. It takes a lot of time. It’s hard to read people’s handwriting. It’s often not consistent because what one person thinks may differ from another; it’s subjective. 
  4. Excel is error-prone. It’s easy to fat-finger a number or type in the wrong formula.
  5. Excel is wasting your employees’ talents! Instead of high-value, high-quality work, they’re doing data entry. In many plants, even supervisors are compiling data to send to upper management, which isn’t value-added. What problems could they solve if they didn’t have to spend time entering data into Excel?
  6. There probably isn’t much detail, only a number. If a job is late or a machine had more downtime than it should’ve, you likely want to know why. But, to find the answer, you’ll have to look beyond the spreadsheet and talk to the team. But, most people can’t remember what they had for lunch let alone a specific problem that happened more than 24 hours ago. Again, it’s not timely and you’re relying on individual memory rather than verified data, in context.
  7. If you want to look at historical data, you have to go back to the person that initially compiled the report. That person has to go back, day by day, to find the answer, and that takes lots of time. In most cases, they may not even waste the time because it’s just a cumbersome ask.
  8. With delays in reporting, you will likely find out about a problem after it’s too late causing reactive measures, not proactive measures.

Excel is Not the Right Software for the Factory Floor

For all of the reasons I mentioned above, Excel is falling short and severely restricting your capacity. It can get too tedious, too complex, too quickly. On any given day, you can have multiple production lines with different production capabilities. Constraints can severely reduce capacity. Yet, manufacturers often rely on Excel to plan production, hoping demand doesn’t exceed capacity. It’s ridiculous! 

You need to know exactly the most work that can be done over a certain timeframe. Most importantly, capacity and production planning aren’t rigid. It’s not a one-size-fits-all approach. All manufacturers are different, and capacity will vary over time. That’s why an Excel spreadsheet is not the most efficient tool for the factory floor. It doesn’t provide the level of adaptability and flexibility manufacturers need in their plants.

How can manufacturers accurately plan production, within certain restraints, on a spreadsheet that instantly becomes outdated the moment you hit save and send to the rest of the floor? How can you possibly find efficiencies within a process that requires error-prone, manual entry? Simply put, you can’t.

Paper reporting and Excel spreadsheets are super flawed. Odds are, you have to calculate, re-calculate, and re-calculate some more before you reach the plan you need. There’s a high risk of error. Data input is tedious and manual, requiring lots of time that would be better spent elsewhere. A spreadsheet isn’t easily shared, and when it is shared, it’s instantly outdated. They aren’t dynamic or easy to understand. Did I mention how much time it takes to maintain a spreadsheet in a plant? 

Sure, it’s not impossible, but tracking production on a spreadsheet requires a lot of time and effort that is better spent elsewhere. Automate where you can and spend that time gained on tasks that require the skills you and your employees were hired for. For lack of a better term, you have other fish to fry! 

With Restricted Capacity, Revenue Suffers

This all relates back to ROI at the end of the day. Think about how much money you’re spending on people writing stuff down on paper, collecting said paper, compiling it into Excel, contextualizing the data, and emailing it out? If you haven’t learned this yet, you’re wasting time and money writing all of this stuff down; this is time that could be spent doing a value-added activity. In the amount of time it took to write out the report, could your operators have made another part? 10 parts?

Supervisors are doing the same thing. They’re summarizing this data. Rather than doing that, if they were out on the floor working with the team, what problems could they solve? What could they move forward? 

At the end of the day, with a lack of long-term reporting, it’s very, very difficult to have a good grasp on your actual lead times and cycle times to actually make a product. The schedule could be wrong. Maybe you’re overscheduling and never able to deliver on time. Maybe, you’re under scheduling and there’s actually excess capacity, but you don’t know because you don’t have the detail to figure it out.

All of this relates back to revenue, specifically sales. With the current supply chain issues, knowing when a product is going to be delivered is imperative. Yet, planning in Excel makes it difficult to figure that out. It will likely take days to accurately quote a delivery date for the customer, annoying your sales team in the process. If you don’t know how long it takes to make something (ahem, your cycle time and lead time), you could either be too liberal or too conservative quoting the sales team. They’ll potentially oversell. Or, they could potentially sell less because they don’t think you can make the product in time. It’s a no-win situation.

If you know, with complete accuracy what your lead times and cycle times are, you’ll be more confident in quoting the sales team, resulting in increased sales, and subsequently, increased revenue. (The Goal is a book that focuses exactly on this scenario – go give it a read!)

Manufacturing Productivity Software Increases Capacity

There’s software that can automate these processes while increasing data accuracy and real-time visibility. It does things like eliminate questions and guesswork, monitor production in real-time and provide analytics (without you having to do a bunch of data input and formulas!)

When you have the right data and software that provides it to you in real-time, your problems become much, much easier to solve. Now, you have time to focus on the bigger problems, increasing efficiencies, and growing the business!

Picture of Bryan Sapot
Bryan Sapot
Bryan Sapot is a lifelong entrepreneur, speaker, CEO, and founder of Mingo. With more than 24 years of experience in manufacturing technology, Bryan is known for his deep manufacturing industry insights. Throughout his career, he’s built products and started companies that leveraged technology to solve problems to make the lives of manufacturers easier. Follow Bryan on LinkedIn here.