4 Problems Caused by Managing Inventory with Spreadsheets

Warehouse Management System SpreadsheetBusinesses that rely on spreadsheets instead of Warehouse Management Systems to manage fulfillment and inventory commonly run into problems with efficiency, errors, timeliness, and waste time and labor.

1. Managing inventory with spreadsheets is manual.

One of the primary problems that arises from managing inventory with spreadsheets is that it’s manual. A worker is going to have to take the time to update inventory counts, and it could take a whole staff to manually manage even just a medium sized inventory. More importantly, managing inventory with spreadsheets invites all of the error opportunities and lack of integration that manual processes always invite.

2. Managing inventory with spreadsheets creates gaps.

Managing inventory with spreadsheets means the inventory effectively will never be up-to-date: With manual inventory management, there will be a gap between the time an item is bought or sold and the time that the update is actually reflected in the inventory. This can lead to overstocking and understocking, infringement on safety stock, violations of Material Requirements Planning guidelines, and the sale of products that don’t actually exist.

3. Managing inventory with spreadsheets is error-prone.

Like any manual process, managing inventory with spreadsheets is error-prone. It takes just one bad keystroke by the person updating the numbers to throw off the inventory. Such errors can lead to the purchase or manufacture of items that a business already has, or the sale of an item that a business doesn’t actually have. Repeated over the course of dozens or hundreds or thousands of products, it’s just not realistic to manually update inventory on spreadsheets without making costly mistakes.

4. Managing inventory with spreadsheets is time- and labor-intensive.

Any manual process is time- and labor-intensive, but not just because a business needs to spend the time and labor doing it. The bigger problem is that businesses often have to spend the time and labor re-doing it. Let’s say a worker in the warehouse is keeping counting inventory on a notepad. That’s doing inventory once. Then someone in the office is transcribing the notepad into a spreadsheet. That’s twice. Another person in the office double checks the counts. That’s three times. Errors are spotted, and now someone has to go back and re-do it. That’s four times. An electronic Warehouse Management System can do it correctly, automatically – and once.

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