Are spreadsheets holding your inventory system back? The simple answer is yes. Your company’s inventory is precious. You’ve invested significant dollars to acquire inventory, build and store it. So, it begs the question: why do companies use spreadsheets to track inventory rather than opting for a more robust inventory system? The answers range from “we’ve always done it this way” to “it’s free.” Here are a few reasons why those answers are holding companies back.
Spreadsheets hold your inventory system hostage
Data entry is a bear. And, the more data you have, the more that can go wrong. Well-meaning employees are attempting to capture and store critical data to manage your inventory, but mistakes happen. Clerical miskey, formula errors, incorrect placement of information… the list goes on and on. Poorly constructed spreadsheets make matters worse by mixing formulas and data, so it is easy for users to type over formulas. Why leave it to chance? This is where an inventory system, like TrackVia, can help. Gone are the days of manual data capture and recording.
Spreadsheets spawn spreadsheets
The trouble starts when users save copies of spreadsheets. Even if the original application were well maintained, the spawned spreadsheet gets changed, spawns again, mutates, and soon spreads throughout the organization like a virus, with neither version control, nor documentation in place. Now you have issues with multiple (wrong) versions and data integrity. It’s a huge mess, and where do you even start to fix it?
There’s a reason why guardrails are installed on our roads and highways. It’s to prevent bad things from happening. Unfortunately, there are no guardrails in place with spreadsheets. Anyone can type anything in anywhere. That’s not the right kind of flexibility companies need. In fact, that kind of “flexibility” requires significant oversight (think cumbersome and expensive). This oversight can come in the form of exhaustive manual audits to catch mistakes and prevent issues. These audits burden the team since auditing a complex spreadsheet can take days of cross-checking calculations and cell references. And, because they’re so difficult, they rarely happen with any consistency. Fortunately, a modern inventory system has guardrails built in so only relevant information is captured, aggregated and placed in the correct report for accuracy and complete visibility.
Spreadsheets are a poor fit because more than anything else, they limit scalability. Because of that, they destroy one of the key competitive advantages offered by a modern, robust inventory system. As demand for your product grows, your inventory grows right along with it. With spreadsheets, you’re now adding more rows and columns to capture more data. That’s just more work for someone to make sure that the data was input correctly and in the right place.
If you have to manually enter inventory data, it’s very likely that your spreadsheets may not accurately reflect your actual inventory count, which may lead to an overabundance of inventory. That’s just as bad as too little inventory since inventory sitting on warehouse shelves for prolonged periods of time can become obsolete or damaged, costing significant dollars to replace that inventory when you actually need it. Spreadsheets cannot offer the same real-time reporting capability as a next-generation inventory system. It is possible to create dashboards and reports from spreadsheets (however, it requires additional work and can be time intensive), but those reports are based on what was versus what is. A robust inventory management system aggregates real-time data and presents it back to you via dynamic (also real-time) dashboards. You can even set triggers to alert you or others when inventory levels fall above or below certain thresholds. Suddenly, decisions that were previously based on incomplete information or out-of-sync data can now be made based on reliable real-time data, leading to faster, better decision making. With a software-based inventory system, you can optimize inventory levels and, along side it, cashflow. As we all know, inventory that sits idle means dollars are locked up, which doesn’t allow companies to invest in other parts of the business.
If you’re the one having to manually enter data into a spreadsheet, you’re probably not that excited to come to work every day. If you’re the one who has to audit these large, complex spreadsheets, you’re probably not that excited either. Dealing with unhappy people at work erodes morale. Now, let’s imagine your customer. Your customer expects a shipment by a certain date. You think it’s on track because of old inventory reports you reviewed. It turns out something has changed and inventory levels are lower than expected, so the shipment to your customer will be late. Oops. Now, the unhappiness has spread beyond your company’s walls. That unhappiness will result in a decline in customer loyalty or worse, a loss of a hard-earned customer.
Get your inventory system on track
There’s no debate that the efficient and effective management of inventory is important. Accurate inventory tracking enables better customer service, saves time and money, and streamlines logistic and manufacturing activities. If you’re still using spreadsheets to manage your inventory, you have probably experienced problems. Don’t worry, you’re not alone. So, if your inventory system is holding you back, now would be a great time to consider a more flexible inventory system. Click here to learn more.
Subscribe to TrackVia’s Blog