The hidden costs of using inventory planning spreadsheets

by Leia Davis | Jun 7, 2016 | Uncategorized


Art of a series originally published by the Inventory Mentor on the NETSTOCK blog.

The majority of businesses use spreadsheets to do all or part of their inventory forecasting, planning, and purchasing. Even large businesses with expensive ERP systems resort to exporting and manipulating data with a spreadsheet to generate forecasts, compute inventory levels, recommend orders, and track outstanding deliveries.

How has Excel become the tool of choice?

  • Most businesses already have it
  • Someone in your company is probably pretty good with Excel
  • They can create custom and complex calculations
  • Lack of functionality in your current software
  • Easy to share your spreadsheet or results

What are the pitfalls of an inventory spreadsheet?

  • What do you do when the one person who created and maintains the spreadsheet is gone?  Does anyone else know how and where the data was exported?  How it was merged?  What are the calculations based on?
  • Inaccurate data can cause costly mistakes.  Whether someone is merging data from multiple sources, removing/adding fields, customizing, or creating complex calculations, there many error-prone steps, in creating and maintaining an error-free spreadsheet.
  • How are supply chain complexities addressed?  It’s difficult for a spreadsheet to account for multiple locations, special rules for discrete items, transfers, safety stock calculations…