{"id":9044,"date":"2023-05-01T10:40:00","date_gmt":"2023-05-01T10:40:00","guid":{"rendered":"https:\/\/www.mrpeasy.com\/blog\/?p=9044"},"modified":"2024-08-05T14:04:15","modified_gmt":"2024-08-05T14:04:15","slug":"production-planning-excel","status":"publish","type":"post","link":"https:\/\/www.mrpeasy.com\/blog\/production-planning-excel\/","title":{"rendered":"Production Planning with Excel \u2013 Opportunities and Limitations"},"content":{"rendered":"\n<p>Excel and other spreadsheet applications have been used in 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. <\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"1000\" height=\"563\" src=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2022\/02\/production-planning-with-excel.jpg\" alt=\"production-planning-with-excel\" class=\"wp-image-9050\" srcset=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2022\/02\/production-planning-with-excel.jpg 1000w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2022\/02\/production-planning-with-excel-300x169.jpg 300w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2022\/02\/production-planning-with-excel-768x432.jpg 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/figure>\n\n\n\n<!--more-->\n\n\n\n<p><em>You can also listen to this article:<\/em><\/p>\n\n\n\n<iframe loading=\"lazy\" title=\"Production Planning with Excel \u2013 Opportunities and Limitations\" allowtransparency=\"true\" height=\"150\" width=\"100%\" style=\"border: none; min-width: min(100%, 430px);\" scrolling=\"no\" data-name=\"pb-iframe-player\" src=\"https:\/\/www.podbean.com\/player-v2\/?i=crjn7-1420ac5-pb&#038;from=pb6admin&#038;share=1&#038;download=1&#038;rtl=0&#038;fonts=Arial&#038;skin=1&#038;font-color=auto&#038;logo_link=episode_page&#038;btn-skin=3\"><\/iframe>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #343333;color:#343333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #343333;color:#343333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.mrpeasy.com\/blog\/production-planning-excel\/#Production_planning_with_Excel_then_and_now\" >Production planning with Excel: then and now<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.mrpeasy.com\/blog\/production-planning-excel\/#Production_Planning_with_Excel_%E2%80%93_advantages_and_disadvantages\" >Production Planning with Excel \u2013 advantages and disadvantages<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.mrpeasy.com\/blog\/production-planning-excel\/#Advantages\" >Advantages<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.mrpeasy.com\/blog\/production-planning-excel\/#Disadvantages\" >Disadvantages<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.mrpeasy.com\/blog\/production-planning-excel\/#MRP_system_%E2%80%93_the_next_level\" >MRP system \u2013 the next level<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.mrpeasy.com\/blog\/production-planning-excel\/#Key_takeaways\" >Key takeaways<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Production_planning_with_Excel_then_and_now\"><\/span><strong>Production planning with Excel: then and now<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>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 <a href=\"https:\/\/www.mrpeasy.com\/production-planning\/\" target=\"_blank\" rel=\"noreferrer noopener\">production planning<\/a> and accounting thanks to their capacity to automate calculations and create visual representations of data.<\/p>\n\n\n\n<p>Starting from 1979, when the <a target=\"_blank\" href=\"https:\/\/www.britannica.com\/topic\/VisiCalc\" rel=\"noreferrer noopener\">first spreadsheet application<\/a> was launched, they quickly became a staple in manufacturing 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.<\/p>\n\n\n\n<p>And they were.<\/p>\n\n\n\n<p>Today, however, there exists a \u201cbut\u201d.<\/p>\n\n\n\n<p>As <a target=\"_blank\" href=\"https:\/\/www.mrpeasy.com\/mrp-system\/\" rel=\"noreferrer noopener\">MRP systems<\/a> 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 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.<\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p>It\u2019s 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.<\/p>\n\n\n<div class=\"banner-v2\">\n    <p class=\"banner-v2__desc\">Your business deserves better than spreadsheets<\/p>\n    <a class=\"banner-v2__link\" href=\"https:\/\/www.mrpeasy.com\/sign-up\/\" target=\"_blank\" data-ga-event=\"blog_signup_banner_blue\">Try MRPeasy for free<\/a>\n<\/div>\t\t<style>.banner-v2 {\n    float: right;\n    display: flex;\n    flex-direction: column;\n    justify-content: center;\n    align-items: center;\n    padding: 40px 32px;\n    gap: 16px;\n    width: 356px;\n    height: 205px;\n    background: linear-gradient(199.68deg, #6084E5 13.17%, #5FA7DD 82.1%);\n    border-radius: 4px;\n    margin-left: 12px;\n    margin-bottom: 12px;\n    margin-top: 15px;\n}\n\n@media (max-width: 767.98px) {\n    .banner-v2 {\n         width: 100%;\n         height: 173px;\n         margin-bottom: 0;\n         margin-left: 0;\n    }\n}\n\n.single__content p.banner-v2__desc {\n    margin: 0 !important;\n}\n\np.banner-v2__desc {\n    width: 292px;\n    font-style: normal;\n    font-weight: 700;\n    font-size: 22px;\n    line-height: 29px !important;\n    text-align: center;\n    color: #FFFFFF;\n    margin: 0 !important;\n    order: 0 !important;\n}\n\n.single__content a.banner-v2__link {\n    color: #FFFFFF !important;\n}\n\n.single__content a.banner-v2__link:hover {\n    color: #003557 !important;\n}\n\na.banner-v2__link {\n    display: flex;\n    justify-content: center;\n    align-items: center;\n    width: 181px;\n    height: 51px;\n    padding: 18px 0;\n    border-radius: 4px;\n    background: #003557;\n    font-weight: 700;\n    font-size: 16px;\n    color: #FFFFFF !important;\n    text-decoration: none !important;\n    order: 1 !important;\n}\n\n.banner-v2__link:hover {\n    background: white;\n    color: #003557 !important;\n}<\/style>\n\t\t\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Production_Planning_with_Excel_%E2%80%93_advantages_and_disadvantages\"><\/span><strong>Production Planning with Excel \u2013 advantages and disadvantages<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Excel and other spreadsheet software have been used for production planning and inventory management for over 40 years, which means it is entirely possible to manage your company\u2019s resources with them. There are many affordable or free Excel templates available on the internet, such as production planning templates with master production schedules,\u00a0inventory management, or project management sheets, as well as step-by-step guides on creating one yourself. However, the few benefits spreadsheets offer need to be weighed against the drawbacks of using a simplistic solution for business management.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages\"><\/span><strong>Advantages<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>1. Affordability<\/strong><\/p>\n\n\n\n<p>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.<\/p>\n\n\n\n<p><strong>2. Little training needed<\/strong><\/p>\n\n\n\n<p>Most people today already have some kind of experience using Excel or other digital spreadsheets. That means saving time and money on training yourself and the employees to get a basic grasp on the system. Of course, to become an expert user, studying the system extensively is necessary.<\/p>\n\n\n\n<p><strong>3. Widely available support materials<\/strong><\/p>\n\n\n\n<p>As spreadsheets are one of the most commonly used software in the world, there is a huge amount of support materials available online. From the user manuals provided by Microsoft to entire forums dedicated to Excel, troubleshooting is quite easy when using spreadsheets.<\/p>\n\n\n\n<p><strong>4. Free templates<\/strong><\/p>\n\n\n\n<p>Along with a plethora of widely available support materials, spreadsheet users can find many different templates online. Some of the more complex ones cost some money, but you can certainly find a lot of helpful ones for free.<\/p>\n\n\n\n<p><strong>5. Works with other systems<\/strong><\/p>\n\n\n\n<p>Excel and Google Sheets data integrates well with other systems such as accounting software or e-commerce platforms, which makes it much easier to import data from one system to another. That way, users can either migrate information from the spreadsheet (usually by creating a CSV file and uploading it to another software) or pull information from the third-party software and upload it into the spreadsheet to create custom reports or graphs that are not available on the other software.<\/p>\n\n\n\n<p><strong>6. Cloud-based options available<\/strong><\/p>\n\n\n\n<p>Even though in the past, one of the weaknesses of spreadsheets was that they impeded collaboration because changes made in the tables were not automatically shared among all users. When a change was made, the spreadsheet had to be emailed to the next user for them to see the changes made and to add their own. Nowadays, solutions such as Google Sheets and Microsoft 365 offer cloud-based access to spreadsheets, making them simultaneously available to many users at once.<\/p>\n\n\n\n<p><strong>7. Works well for a microbusiness<\/strong><\/p>\n\n\n\n<p>Even though spreadsheets are no longer the most viable option for managing a business, they still work well in microbusiness environments where companies have 1-10 employees and the workflows are less intense and uncomplicated.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disadvantages\"><\/span><strong>Disadvantages<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>1. Human error<\/strong><\/p>\n\n\n\n<p>Manual data entry, which is prevalent when using spreadsheets, is prone to human error. A report from the University of Hawaii shows that 88% of spreadsheets contain errors, and another from Coopers and Lybrand found that 90% of all worksheets with 150 rows or more held mistakes. With a large amount of data entered into the system, as is the case with production planning, mistakes that may seem minuscule might compound and turn into a data nightmare.<\/p>\n\n\n\n<p><strong>2. Data entry takes time<\/strong><\/p>\n\n\n\n<p>When a large amount of data needs to be consistently entered into the system, you will waste a lot of time and energy on it unless you have someone else doing it, in which case you will only waste money. That, however, would negate one of the most important reasons for choosing to plan production with Excel instead of an MRP system \u2013 the low price point.<\/p>\n\n\n\n<p><strong>3. Unintuitive and inconvenient<\/strong><\/p>\n\n\n\n<p>Spreadsheets are notoriously clunky. And the more complex they become, the clunkier they get. There is also very little room for dynamic production planning and process automation in Excel which makes production plans static monoliths that need to be manually updated when <a target=\"_blank\" href=\"https:\/\/www.mrpeasy.com\/blog\/production-capacity\/\" rel=\"noreferrer noopener\">production capacity<\/a>, resource availability, or order priorities change.<\/p>\n\n\n\n<p><strong>4. Expert use needs lots of training<\/strong><\/p>\n\n\n\n<p>The basics of Excel can be learned in a couple of days. To become an expert user of Excel, however, Microsoft estimates that you would have to study and practice on the system for approximately 150 hours.<\/p>\n\n\n\n<p><strong>5. Offline version makes collaboration difficult<\/strong><\/p>\n\n\n\n<p>If you are still using spreadsheets in the traditional way, i.e. by saving the files onto your computer and sharing them by email, it is difficult to create a collaborative workflow where information would be instantly shared with all participants. As production planning is a collaborative process, this could turn out to be a major limitation.<\/p>\n\n\n\n<p><strong>6. Inflexibility<\/strong><\/p>\n\n\n\n<p>If a company uses Excel, there is usually one person that is in charge of creating and maintaining the spreadsheet. Most often, that one person has their own special way of doing things, which might create problems when that person leaves the company. This \u201cspecial way of doing things\u201d could sometimes be in conflict with what the support materials on the web consider best practices and may therefore be unsustainable in the long run.<\/p>\n\n\n\n<p><strong>7. Does not scale well<\/strong><\/p>\n\n\n\n<p>Spreadsheets just do not scale well. The larger the company becomes, the more inconvenient and clunky the documents become. Data entry eventually becomes a full-time job and the risk of data errors grows incrementally. On the other hand, using an MRP system flattens the complexity curve and makes scaling up the system an effortless task.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"MRP_system_%E2%80%93_the_next_level\"><\/span><strong>MRP system \u2013 the next level<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Even though spreadsheets are a simple and affordable solution for micro-companies to start their production planning and business management journey, their cons eventually tend to weigh up the pros.<\/p>\n\n\n\n<p>This is especially true today as the market is saturated with different MRP and ERP systems that offer affordable cloud-based software with functionality tailored for small to medium-sized companies. These modern systems provide SMEs with real-time, instantly accessible information regarding their production schedules, order statuses, inventory levels, sales, purchases, finances, etc.<\/p>\n\n\n\n<p>The basic functionality present in MRP software includes <a href=\"https:\/\/www.mrpeasy.com\/blog\/bill-of-materials\/\" target=\"_blank\" rel=\"noreferrer noopener\">bills of materials<\/a> and production routing, raw materials planning, capacity planning, supply chain management, inventory management, shop floor reporting, a production scheduling system with Gantt chart view, KPI tracking, etc. While creating an Excel spreadsheet system that would integrate all of these processes would be impossible, MRP does it effortlessly.<\/p>\n\n\n\n<p>In addition, the huge amount of data an MRP system collects and processes allows you to <a href=\"https:\/\/www.mrpeasy.com\/blog\/bottlenecks-in-manufacturing\/\" target=\"_blank\" rel=\"noreferrer noopener\">effectively identify and eliminate bottlenecks within your manufacturing processes<\/a>.<\/p>\n\n\n\n<p>Unlike spreadsheets, well-built MRP systems are also dynamic, intuitive, and easy to navigate. They automate a huge portion of the data entry tasks that would take up a lot of time should you still be using Excel. With the large degree of automation, human error is also minimized which makes your data more accurate and trustworthy.<\/p>\n\n\n\n<p>As ERP\/MRP systems push companies to standardize their processes, they can turn the business into a well-oiled machine capable of much quicker scaling than is possible when using spreadsheets. It is important to note, however, that choosing a <a target=\"_blank\" href=\"https:\/\/www.mrpeasy.com\/production-planning-software\/\" rel=\"noreferrer noopener\">production planning software<\/a> is a task that should not be taken lightly. While choosing the right option for your company might put the business on a course to success, the wrong choice can end up wasting a lot of time and money. But no spreadsheet template can substitute a functional MRP software.<\/p>\n\n\n<div class=\"banner-v1\">\n    <div class=\"banner__text\">\n        <div class=\"banner-v1__title\">Ditch the spreadsheets and achieve a new level of efficiency<\/div>\n        <div class=\"banner-v1__desc\">MRPeasy users report a 54% average improvement in the overall performance of their small manufacturing company and a 42% increase in on-time deliveries.<\/div>\n        <div><a class=\"banner-v1__link\" href=\"https:\/\/www.mrpeasy.com\/sign-up\/\" target=\"_blank\" data-ga-event=\"blog_signup_banner_white\">Try for free<\/a><\/div>\n    <\/div>\n    <div class=\"banner__img\">\n        <img decoding=\"async\" src=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/themes\/mrpeasy\/assets\/images\/banner.svg\" alt=\"banner\">\n    <\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_takeaways\"><\/span>Key takeaways<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Excel and other spreadsheet applications have\nbeen the go-to business management tool for small and medium-sized companies\nsince the popularization of computer technology.<\/li>\n\n\n\n<li>With ERP\/MRP systems becoming more affordable\nand user-friendly, however, spreadsheets are quickly losing their ground.<\/li>\n\n\n\n<li>Even though Excel and other spreadsheets are\naffordable, accessible, with a gargantuan amount of support materials, and many\nintegrations, they are also error-prone, time-consuming, inconvenient,\ninflexible, and notoriously hard to scale.<\/li>\n\n\n\n<li>Although Excel can still be effectively used for\nproduction planning in microbusinesses with up to 10 employees, larger\nbusinesses are already adopting specialized software solutions that offer\nincreased efficiency and accuracy.<\/li>\n\n\n\n<li>ERP\/MRP systems push companies to standardize\ntheir processes, turning the business into a well-oiled machine capable of much\nquicker scaling than is possible when using spreadsheets.<\/li>\n<\/ul>\n\n\n\n<p><em>You may also like: <a href=\"https:\/\/www.mrpeasy.com\/blog\/advantages-disadvantages-using-mrp-system\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">Advantages and Disadvantages of Using an MRP System<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Excel and other spreadsheet applications have been used in 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.<\/p>\n","protected":false},"author":7,"featured_media":9050,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[90,94,93],"tags":[296,992,990,994,17,66,988,989,995,993,991],"class_list":["post-9044","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-choosing-a-software","category-tips","category-production-planning","tag-capacity-planning","tag-excel-for-manufacturing","tag-excel-production-planning","tag-excel-pros-and-cons","tag-mrp-system","tag-mrpeasy","tag-production-planning-with-excel","tag-production-planning-with-spreadsheets","tag-pros-and-cons-of-spreadsheets","tag-scalability","tag-spreadsheet-production-planning"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Production Planning with Excel \u2013 Opportunities and Limitations<\/title>\n<meta name=\"description\" content=\"Even though Excel can be used for production planning in microcompanies, a growing business should already look for something more scalable. 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