Excel is one of the software tools that can be used for inventory management. As we all know, inventory management is one of the most important aspects of business management. Without proper management of inventory, it is possible for a business to start experiencing frequent stock-outs, leading to poor performance. Conversely, without proper management of inventory, it is possible for a business to end up with too much stock, tying up money (and possibly storage space) that could have been used in better ways, ultimately leading to poor performance. With proper inventory management, a business is able to maintain just the right level of stock: thus ensuring optimum performance.
Inventory management is one of the areas where software tools can be of great help. Keeping track of inventory manually is a very difficult undertaking. It is bound to be a tedious undertaking, especially for businesses that keep complex inventories. It is also very hard to maintain high standards of accuracy, while keeping track of inventory manually. But through the use of software tools, the task becomes less tedious. Software tools make it possible to maintain very high standards of accuracy in inventory management.
When you start thinking of the software tools you can use for inventory management, you come to realize that there are several options open to you. You can, for instance, make use of one of the specialized inventory management software applications that are available in the market. You can also make use of a general-purpose application, such as Excel or Access, to manage your inventory. In this article, we focus on the specific question of using Excel for inventory management: as we try to understand what it entails, what the advantages of using Excel for inventory management are, how to go about it… and so on.
Pros of using Excel for inventory management
One key advantage associated with the use of Excel for inventory management is in the fact that it is a cost-effective tool. Chances are that you already have Excel, as part of your Microsoft Office suite. We also have Excel-like spreadsheet applications for open source operating systems (such as Linux), in case you are not a Microsoft Office enthusiast. Therefore, using Excel for inventory management becomes just a matter of launching the application, creating the necessary workbooks and worksheets and implementing the system. On the other hand, if you were to use of the specialized inventory management applications, chances are that you’d have to pay for it. Therefore, by opting to use Excel for inventory management, you get to save the money that you’d have spent in that way.
Another key advantage associated with use of Excel for inventory management is in the fact that Excel is very versatile. This is to say that Excel can be adapted for use in almost any inventory management situation. This makes it different from most of the specialized inventory management tools, which tend to have huge limitations in terms of the situations in which they can be used.
Yet another key advantage associated with the use of Excel for inventory management is in the fact that Excel is very powerful. It is easy to under-estimate the power of Excel because, at first glance, it looks so simple. Yet, as you come to discover, Excel is actually a very powerful application, which can be used to manage very complex inventories. What is necessary, in most cases, is for one to have the know-how on how to fully tap into the power of Excel.
Considerations to be made when implementing Excel for inventory management
There are several considerations to be made, when implementing Excel for inventory management.
Firstly, you have to look at the complexity of the inventory to be managed. There are situations where the inventory to be managed is simple (just a few items that are dispensed only once in a while). There are other situations where the inventory to be managed is complex: like in a supermarket chain, where there are tens of thousands of items that are constantly being dispensed. The complexity of the inventory to be managed will determine the approach you are to use, when it comes to the actual design and implementation of the inventory management system.
Secondly, you have to look at the other software tools in use within the business. This is also where you have to ask yourself whether you will need to synchronize data from those applications with the inventory management data that will be coming from Excel. If the answer is yes, you have to ensure that you design and implement your Excel-based inventory management system in such a manner that it synchronizes flawlessly with data from those other applications.
Thirdly, you have to look at the number of people who are involved in handling the inventory within the business, and the number of people who need to make use of inventory-related data. There are scenarios where only one person is involved in inventory management, and where just a few people make use of the inventory-related data (as in the case of a small retail business). There are other cases where the people who are involved in handling inventory are numerous, and where a similarly huge number of people need to make use of the inventory-related data. That is, for instance, as in the case of complex business organizations. The number of people who are to make use of the Excel-based inventory management system you will be creating, and the levels at which they will be using the system, determines the manner in which the system is to be designed and implemented.
Steps to be followed when implementing Excel for inventory management
Ultimately, when it comes to implementation of the Excel-based inventory management system, the first step will be to install Excel on your computer(s), if it is not already installed.
The second step will be that of creating the workbooks that you are to use for inventory management purposes.
The third step will be that of creating the worksheets (within the workbooks) that you are to use for inventory management purposes.
The fourth step will be that of visualizing the inventory-related data you will be generating: so as to be able to figure out which data is to go into which worksheet(s) and, within the worksheet(s), which data is to go into the columns and which data is to go into the rows.
The fifth step is to put the results of the data visualization step into the worksheets (thus creating the necessary spreadsheets), and to create the necessary formulas, so as to have a fully functioning system. To help you in this step, you can make use of the various templates that are available online.
You may need to create forms and other data entry tools, as well as report-generation utilities, so as to make things easy for the people who will be using the Excel-based inventory management system.
You may also need to password-protect the workbooks used for inventory management, to ensure that only authorized people are able to access and edit the data therein.
Needless to say, you will need to test the system fully, before launching it.
Another key step in the implementation process will be that of training the staff who are to use the Excel-based inventory management system on how to use it effectively.