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The inventory advisor

May 16, 2016

The complexities of inventory spreadsheets

We’ve been following the new series from the team over at The Inventory Mentor about inventory spreadsheets. Last week, they took a look at the issues around data and how unlikely it is that your spreadsheet includes all the right inputs that are properly synched.

This week, they make a jump: what if you did have all the right data? What would your spreadsheet really look like if everything was correctly synched up and you had all the pertinent inputs covered? Well, in that case, your spreadsheet has evolved, and that evolution can be fraught with problems, too.

An evolution to ever-increasing complexity

For example, you’ll likely need to incorporate more sophisticated safety stock computations if you want to create truly optimized purchase orders. How will you handle that kind of operation in Excel? And certainly you’d want to build more accurate forecasts that respond to changing trends, seasonality, sporadic demand, and one-off buys.

The complexities pile up from there, and the results aren’t pretty. Think about businesses who purchase into a central warehouse and then make transfers to subsidiary locations. Think about the planning and higher-level views needed to manage bills of materials and kitted products. These are major concerns, and those old spreadsheets just aren’t built for the job.

Be sure to check out The Inventory Mentor’s blog post and their on-going series. The way these topics relate to improved purchasing is really key, so be sure to make note of that as you read through. And, of course, we’ll check back in with the blog next week to see what happens when your spreadsheet takes over your inventory process.