Numerical Insights LLC

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Top Inventory Tracking and Management Templates with Video Instructions

Flexible, Customizable Inventory Management

Regardless of the size of your business, Microsoft Excel spreadsheets are a flexible tool for tracking, analyzing and managing your inventory. Even larger companies, who can afford to invest in specialized warehouse management and/or enterprise resource planning (ERP) software, find that there are important capabilities missing within their tool. They also find that they have to look at many screens of information to get the data needed to make inventory decisions. Enterprise tools are built to make individual tasks efficient. They do not lend themselves to easy decision-making for inventory professionals.

While enterprise software can automate many inventory calculations such as determining safety stock and reorder points, I find that up to 50% of the inventory items I need to manage require a deviation from automated calculations and processes. This is especially true for newly launched items and items being phased out of a company’s offerings.

Over the years, I’ve developed several Excel templates which are available in my online store. These templates come with video explanations which are viewable on my YouTube page. If you manage as many inventory exceptions as I do, the flexibility to customize Excel saves me hours of work each week.

The ABCs of Inventory

An ABC inventory analysis is a valuable tool which helps organizations optimize their resources, reduce costs, mitigate risks, and improve overall operational efficiency. It allows companies to focus their efforts and attention where it matters most, contributing to better supply chain and inventory control.

An ABC analysis is a simple prioritization method which allows companies to allocate resources to more closely manage Group A items and to spend less time managing Group B and C items. You can conduct an ABC analysis in several ways but one of the most popular is to look at item demand and cost. When conducting this analysis on finished goods, I prefer to use a profit calculation.

Once an ABC analysis is conducted, you’ll be able to make several decisions based on the results. You may choose to:

  • Prioritize storage space and store the A items closest to where workers pick inventory.

  • Determine whether the volume of A items would yield volume-discounts in negotiations.

  • Focus forecasting efforts on Group A items.

  • Determine if C items can be phased out (SKU rationalization).

I’ve designed an Excel template for an ABC analysis and provided video instructions. You can view the template in our store or view the video instructions on YouTube. 

Managing Inventory Age

When I speak to clients about their inventory, I discuss how much of their inventory is young and how much is old. My definition of young inventory is inventory less than 90 days old. Inventory that is deemed old tends to be more than 365 days old.

Knowing the age of inventory helps prevent product obsolescence. Items that have been in inventory for too long are at risk of becoming outdated, leading to financial losses. This is especially true for products such as shampoos or food that expire.

Inventory age also supports demand forecasting, enabling businesses to align procurement and production with customer needs. It helps identify slow-moving items (which can also be identified by calculating inventory turns), which allows for targeted marketing efforts to clear out stale stock.

I’ve designed an Excel template to calculate inventory age and provided video instructions. You can view the template in our store or view the video instructions on YouTube. 

Calculating Inventory Turns (Selling Speed) of All Items

Measuring inventory turns allows you to assess operational efficiency and improve inventory management. Regular measurement helps mitigate the risk of holding obsolete inventory. It also minimizes the financial impact from lost sales due to stock outs. A high turnover rate ensures products are readily available, enhancing customer satisfaction and preventing stockouts. It can also strengthen your position in supplier negotiations, leading to better terms and discounts.

Inventory turns are invaluable for demand forecasting, aligning procurement and production with actual customer demand, reducing waste, and enhancing operational efficiency.

I’ve designed an Excel template to calculate inventory turns and provided video instructions. You can view the template in our store or view the video instructions on YouTube. 

Calculating When to Order Inventory (Safety Stock and Reorder Point)

Calculating safety stock and reorder points is essential for effective inventory management, ensuring a business can meet customer demand while avoiding stockouts. Essentially, the safety stock calculation looks at the volatility of your product demand (how much it varies over time) and determines how much extra stock is needed to account for that variation. The reorder point combines that volatility with your supplier or manufacturer’s lead times to determine how low inventory can go before you should consider ordering more of that item. Simply put, the combination of the safety stock and reorder point calculations determine when you should place an order for a product.

Calculating safety stock and reorder points is vital to ensure customer satisfaction, efficient operations, and cost-effective inventory management, while also safeguarding against uncertainties and minimizing financial risk.

I’ve designed an Excel template to calculate inventory turns and provided video instructions. You can view the template in our store or view the video instructions on YouTube. 

Summary

While larger companies may have access to specialized inventory management software, Excel remains essential for tasks that fall outside the capabilities of such tools. In such cases, the use of Microsoft Excel templates in managing inventory can provide much-needed flexibility and cost-effectiveness for businesses of all sizes.

This article provides a brief description of available templates. For a more detailed description of the calculations, please refer to the following articles.

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