With their familiar functions and layout, spreadsheets are an understandably attractive inventory management option. Most companies already use spreadsheets, so using or developing an inventory management template in Excel seems like the straightforward option. Unfortunately, spreadsheets have some key limitations that can compromise effective inventory management. There are five main ways that the classic Excel spreadsheet is unable to compete with a dedicated inventory management software solution such as Unleashed.
Excel is error-prone
The main source of inaccuracy in Excel stems from data entry, as any data has to be manually keyed in. As a result, stock can easily be miscoded and quantities can be incorrectly entered. A careless mouse click or keystroke could result in an operator entering data into the wrong cell, overwriting any information already there. A second source of inaccuracy is introduced by the ‘formulae‘ that operate on data in the spreadsheet. Small mistakes in a formula will create errors and can be difficult to notice. A further disadvantage is the time wasted checking for and dealing with errors in Excel spreadsheets.
No real-time inventory information
Specialized inventory management software is designed to keep inventory data updated in real-time as stock levels change. Far from being updated in real-time, an Excel spreadsheet may not even let you know how old the data is that you’re viewing. Even with diligent staff, a manual inventory system will never be as up-to-date as a real-time solution. And without diligent staff, a manual inventory system can really hold your business back, through lost sales, held-up production and time consuming stock takes.
Excel does not support multiple concurrent users
Although some spreadsheet offerings (such as Google Sheets) support multiple users, Excel is more predominant, especially among business users. However, Excel lacks support for multiple users. Only one user can have the inventory worksheet open at one time, even though multiple members of your team may need to adjust inventory information as part of their work. This wastes time, increases the risk of error and can hinder buy-in from inventory management skeptics within the business.
Spreadsheets reduce accountability
Excel spreadsheets offer no way of telling who has entered and edited what information. This reduces accountability and makes it difficult to know who to go to when something needs clarifying. A spreadsheet-based inventory management system promotes stock shrinkage and fraud as staff with dishonest intentions could alter inventory records to hide theft and intentional stock damage.
Excel sheets make it difficult to turn inventory data into business intelligence
Although Excel generally has a good toolkit for business statistics, it lacks specific tools for inventory management. The fundamental limitation of using Excel for inventory analysis and forecasting is the lack of real-time data. Without the confidence that your inventory information is up-to-date and accurate, it becomes difficult to credibly turn inventory data into business intelligence.
Specialized inventory management software provides a better alternative to the classic Excel spreadsheet. A best-in-class inventory management product will mitigate the risk of error, update in real-time and support multiple users, keeping track of their actions at each step.