While Excel spreadsheets are a helpful and inexpensive tool, utilizing them for inventory management and tracking is inefficient and largely ineffectual. It lacks the functionality that businesses need in order to have control over their inventory.
A surprising number of small businesses fail to utilize accurate and meaningful inventory management practices, sometimes using little or no real control measures.
Excel has been a mainstay of the business world and still has some great uses. However, its effectiveness as an inventory management solution has been vastly overshadowed by the cutting edge technology and functionality provided by specialist platforms.
To give some scope to the problem, let’s take a look at why businesses shouldn’t use Excel spreadsheets as an inventory management solution.
Lacks real-time access to data and control
There are now a wide variety of great inventory management solutions available to businesses of all shapes and sizes. The cost varies but even small businesses can utilize industry-leading solutions via cloud computing solutions. One of the main draw cards of these specialized solutions is the potential for real-time access to data and control, something that Excel can’t provide.
In order for inventory management to be meaningful, there needs to be some kind of real-time access to the supply chain. Everything from adjusting stock levels and checking for shortages, to accessing analytics and sales forecasting, is best achieved through the real-time access to quality inventory management software.
Lacks easy access to history and sales forecasting
For most businesses, having the ability to accurately perform sales forecasting is a high priority. This is one of the ways that inventory management can save businesses money. As Excel is merely spreadsheets and is manually driven, it is unable to be intuitive, and as a result is easily misunderstood or incorrectly used. Good inventory management platforms not only provide ample opportunities for forecasting but also provide access to sales histories. In the modern age of business, these tools are becoming increasingly necessary in order to compete.
Lacks collaborative possibilities
One of the ways that modern software innovations have helped inventory management is through the ability to collaborate. Multiple users can access all areas of a business and be assured that all changes are made in real-time. In contrast, one of the main handicaps of Excel is its inflexibility.
Lacks safeguards against human error
Human error is something we’ll no doubt always have to contend with. That being said there are many innovations within automation that are greatly reducing the cost of human error. As Excel is a manual solution, highly dependent on accurate entries and without the safeguards of automated solutions, there is often a high level of inaccuracies. These kinds of errors cost businesses real capital and are hard to correct without time consuming manual labor.
Lacks intuition and agility
A great development in recent years has been innovations within software functionality. Many tasks that used to involve heavy labor hours are now becoming easier through automation and intuitive software features. Ask any warehouse manager who can now scan products and parts in real-time, whether technology has made their work easier.
One of Excel’s many shortcomings is that it lacks intuition and agility. As a manual tool, its functionality is limited to human use and has no scope for automation.
Lacks mobile technology and barcoding
Mobile technology is providing some fantastic solutions for businesses utilizing inventory management. Businesses now have the ability to access systems and data from anywhere in the world, often from any Internet capable device. Hand in hand with this is the capability to use barcoding for all parts and products. Again, features such as this render Excel inventory management redundant, and in many cases, a liability.
The end result of spreadsheets
When you combine all of the benefits of modern, cutting-edge inventory management solutions, and compare them to Excel, the big picture is clear and definitive. Businesses, large and small, should take the leap to inventory management software and leave Excel behind.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.