What Is a Cycle Count?
Cycle count is an inventory management term that refers to checking an inventory subset, usually on the same day of the week. It’s similar to a regularly scheduled spot check of your inventory. Cycle counts are easier to do and less disruptive than full inventory audits, which may require you to shut down your warehouse for a day or more.
Cycle counts should only be used in warehouses where there’s a high degree of inventory accuracy. They can be useful to spot potential inventory errors and to get to the root of a problem when you suspect inventory mistakes.
Four Types of common Cycle Counts
1. Pareto Method:
The Pareto Method of cycle counting follows the Pareto Principle, and concentrates on counting items of value the most frequently. Inventory of high value is counted often, while inventory with low value is counted less frequently.
Some cycle counting methods focus on usage. Items accessed more frequently are counted more often.
Hybrid cycle counting methods consider first the Pareto Method calculations, with the remaining inventory cycled through based on usage, value, and other factors.
4. Objective cycle counting:
Objective cycle counting uses store or warehouse maps to assign shelves to be counted to particular inventory management specialists. Not every area is counted weekly or monthly, but the rolling stock count continually updates the inventory management software to refresh stock counts.
Annual Inventory Counts and Cycle Counts
topShelf inventory management system offers many benefits. One of these benefits is enhanced inventory accuracy. Through topShelf’s barcode printing and scanning features, you can easily tag your inventory with barcodes and scan them into and out of inventory as needed. When topShelf is used consistently in your warehouse, you’ll find your inventory management practices improve. Inventory accuracy may improve dramatically, depending on the degree to which your staff uses topShelf consistently.
When your inventory accuracy reaches 95% or more, you may find that switching from full inventory audits to cycle counts is a better way to prevent shrinkage.
Many companies, once they feel their inventory is accurate, switch to a cycle-counting method only and stop taking annual inventory. You may still wish to conduct an annual inventory for added accuracy, but in general, cycle counts can provide accurate, updated inventory management data to your system.
topShelf from Scout Software supports cycle counts and can make it easier, faster, and more efficient for you to conduct annual inventory audits or cycle counts. For more information on topShelf, visit Scout Software or contact us today.
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