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Cycle Counting in a Warehouse Setting
Inventory accuracy is crucial in manufacturing, distribution, and warehousing fulfillment. Inaccurate inventory can lead to lost money, time, and embarrassing situations like overselling a product. As a business in one of these professions, it’s easy to see why maintaining accurate inventory counts is key.
Cycle counting is an inventory counting solution that allows businesses to count the number of items in a number of areas within their warehouse. There are three types of cycle counting that we focus on in this blog: control group, random sample, and ABC analysis.
Control group cycle counting focuses on a small set of items that will be counted numerous times over a short period of time. Control group cycle counting is useful as the process continues regularly and allows managers to see how quickly and efficiently a new employee is working, along with accounting for errors that constantly occur in specific sections your warehouse.
Random sample cycle counting is a good choice for places with smaller workforces and a large number of similar products. Managers can choose between numerous items and assign employees to the scanning area.
Random cycle counting can be grouped into two separate strategies: constant population counting and diminished population counting. Constant population counting entails counting a number of items each time a count is performed, compared to diminished population counting where once an item has been counted, it will not be counted again until the entire cycle is complete.
ABC Cycle counting is based on the Pareto principle, which posits that 80 percent of the effects come from 20 percent of causes. (A) will be your products that sell at a high volume and will cause 20 percent of your issues. Cycle counts in this area must be heavily scrutinized because solving the problems in (A) will have residual effects on (B) and (C). Usually the same issue in (A) is carried over to (B) and (C).
Cycle counting is a way to ensure you provide accurate inventory for the product you are warehousing. If you’re having trouble with inventory shrinkage, applying one of these methods should help curb any inventory count issues.
This process should not be complicated and, with the proper warehouse management system, cycle counting should be a breeze. If you’re still having trouble, you may consider different ways of managing your inventory.
