3 reasons to stop running your procurement strategy in spreadsheets

Every electronics manufacturer needs to keep their procurement data close at hand. Spreadsheets can seem like a convenient choice for storing this information, especially for smaller companies with fewer parts to manage. After all, it's likely you already use spreadsheets elsewhere in your business, making it a low-to-no-cost solution. However, you get what you pay for.

Spreadsheets are perpetually outdated, prone to human error, and unscalable. As a result, using this tool to manage procurement creates expensive issues downstream, like production delays, which limit your revenue and growth.

Most manufacturers know this and still use spreadsheets to run their procurement strategy for one reason or another (often because the system is already in place and switching risks disrupting operations). If that sounds familiar, here’s why sticking with spreadsheets poses more risk to your operations than it’s worth.

Reason 1: Spreadsheets are perpetually outdated

Most electronics manufacturers don't use just a single spreadsheet to manage their inventory from end to end. For instance, you might have one sheet for demand forecasting, another for managing component parts, and another for tracking purchases.

Despite all this data working together to inform your procurement strategy, it’s likely none of these spreadsheets are connected. This makes it impossible to keep this data up to date.

For example, say you finish updating spreadsheet A, then move on to spreadsheet B. All the while, your operations run in the background. By the time you finish getting spreadsheet B up to date, spreadsheet A will already be outdated. Meanwhile, you still have to touch C, D, and E.

To complicate matters further, the most diligent companies only update these spreadsheets once, maybe twice a day. This means you’re making critical business decisions — such as how many of a critical component to buy or when to place that purchase order — based on information that's already out of date. As a result, your business operates reactively rather than proactively.

Of course, some manufacturers use integrations to streamline data entry and minimize their risk of using outdated data. However, integrations often break, and even when this technology works perfectly, it only migrates data; it does not continuously check for data integrity. This means someone on the team still needs to go in and check for accuracy, a manual process that's fraught with opportunities for error.

Reason 2: Manual data entry inevitably leads to errors

The logistical data your business relies on is often trapped in thousands of different PDFs (such as product change notifications, purchase orders, and packing slips), making it difficult to source the information you need. With spreadsheets, manufacturers aim to solve this challenge by centralizing all this data into — as they say — a "source of truth."

However, creating and maintaining this “source of truth” in spreadsheets is a manually-intensive process, one that’s prone to human error. Why? Because centralizing all this information requires copying and pasting hundreds to thousands of data points from their original sources into your team’s spreadsheets.

The more data points you carry over, the more likely mistakes like typos become, and the less likely your team is to catch them. Over 90% of spreadsheets contain errors for this reason.

Even worse, if you don’t verify the primary source’s data before migration, you’ll likely introduce a slew of new errors, even if you copy every point verbatim. For instance, say the numbers on an invoice don’t align with its corresponding PO. Unless you’ve three-way matched this shipment and documented the findings, you risk:

• Potentially using the wrong number (depending on which sources’ data you carried into the spreadsheet)
• Using contradicting numbers (if you carried over both numbers, which often happens when managing multiple spreadsheets simultaneously)

That said, regardless of how errors creep in, the result is the same: a “source of truth” you can't trust.

Reason 3: Procurement isn’t scalable with spreadsheets

As your company manages more components (due to increased demand or expanded product offerings), it must also manage more data. For one, this makes updating your spreadsheets more time-consuming. But, the heavier lift also increases your risk of faulty data, leading to costly mistakes that compromise your operational efficiency and hinder growth.

Say your target inventory level for a hard drive is 100 cases. Your warehouse has enough stock, but your spreadsheets report that you only have 10 left, and you don't catch this typo (because it's one of thousands of data points). So, you order 90 more. Not only does this leave you overstocked, but it also introduces higher carrying costs, lowering your profit margins.

As a one-off scenario, this might seem insignificant. However, when multiple mistakes like this happen simultaneously, they can have a compounding effect. For instance, imagine if you overstocked a slow-moving SKU while stocking out of a critical component for your flagship product. Together, these oversights undermine your bottom line by adding holding costs while costing you revenue.

To get ahead of this, most manufacturers add more procurement headcount to help keep these spreadsheets up-to-date. However, a larger team often leads to less accountability in this scenario (after all, who's responsible for updating spreadsheet A, and when did they last do this?). This only aggravates the root issue — that spreadsheets aren't a trustworthy source for your procurement strategy.

How automation streamlines component procurement

Unlike spreadsheets, automated procurement solutions like Cofactr provide manufacturers with real-time data on their BOMs, inventory, and supply chains — all in one unified platform. With it, you can reach production volume without sifting through spreadsheets all day or adding the headcount historically needed to manage component procurement at scale.

Get more proactive with real-time data

Automated procurement software connects all your data sources (including PCNs, POs, and packing slips) the moment they become available. This way, your logistical decisions are always based on the latest information, enabling you to operate more proactively.

Take Cofactr, for example. As the only ITAR-compliant document extraction system built specifically for the electronics industry, our DocAI gathers the most valuable information from your data sources and consolidates it into a single platform. The solution also integrates directly with leading ERPs, MRPs, and MESs, so you get end-to-end supply chain visibility without digging through email chains or switching between tools.

Trust the data your business runs on

Cofactr continuously syncs data from external sources (like distributors, manufacturers, and shipping services) and your internal systems in a unified platform to eliminate manual data entry and the human error that comes with it. As a result, you get a single "source of truth" that you can actually trust to track the stock levels, cost, availability, and status of your materials.

With it, your team can make smarter decisions that strategically accelerate BOM-to-production and improve your bottom line. For instance, with Cofactr, you can see at a glance:

• What SKUs to order and how much, based on your current inventory levels and projected demand
• Which of your suppliers (or the hundreds of vetted distributors in Cofactr's network) offers that material at the best price
• The ideal time to place this purchase order based on the supplier's lead time

This way, you order the right amount of inventory at the right time, avoiding stockouts and overstock in the process.

Simplify procurement and scale your business

The best automated procurement solutions go beyond eliminating tedious manual tasks (like entering stock data) and offering end-to-end visibility. They also give manufacturers more control over their logistics so they can sustainably scale operations.

For example, Cofactr not only simplifies data management but also helps optimize your physical stock levels. By setting up a few simple rules (like who your preferred vendor is), the platform automatically generates optimized POs based on your target stock levels, cost, and lead times. You can then place that order with only one click and track every movement your inventory makes — including transfers between locations.

Best of all, you don't need to babysit your distributor's website for updates. Cofactr will automatically notify you anytime something changes along your supply chain. These alerts come complete with actionable next steps so you can effortlessly stay ahead of potential disruptions and keep your focus on higher-level initiatives, like driving growth.

Level up your procurement strategy with Cofactr

By unifying procurement, inventory management, and logistics into a single platform, Cofactr empowers electronics manufacturers like yourself to reduce downstream issues like production delays by 85% and boost procurement efficiency by 20%.

Behind the scenes, Cofactr handles everything from acquisition to inventory management on your behalf — all while offering you complete visibility into your supply chain data.

See why leading electronics manufacturers like Stoke, PatchRX, and Neros trust Cofactr to streamline procurement and scale operations. Book a demo today.