Saturday, February 8, 2014
Using Excel as an Inventory Management Tool for Small Businesses?
There are a number of Inventory Management systems available in the market. Their prices vary, from thousands to millions of dollars, depending on their complication and scale.
But if we are just doing a small business, such as a clothes shop or a grocery, should we run for such an expensive solution for managing inventories?
At CMU, I studied the courses of “Financial Analysis” and “Decision Making under Uncertainty”. With these courses, I was taught how to plan a master budget, and make sales/demand forecasts, using just Microsoft Excel.
Thus, I was thinking about a possibility of using Excel spread sheets to monitor inventories for such small shops or groceries.
Since I haven’t had enough time, and experience in these business, I couldn't formulate an Excel template myself, but found some templates from the internet. One of them is screen-shot below.
Isn't it comprehensive enough for a business?
The answer is “Yes” for, again, a small business. However, when the business is expanded, this solution seems to have limitations, because:
· Excel is not a database design solution
· It does not provide enough functions and we have to formulate the sheets ourselves.
· It is not designed to be worked by multiple users at the same time.
· It limits the ability of quickly analyse historical data, etc.
Given that fact, it is suggested that when the business get bigger, a complete solution for inventory management should be considered.