How can you accurately execute cycle counting methods?

2 Choose your cycle counting method

When selecting which items to count and how often to count them, there are several methods to consider. ABC analysis divides inventory into three categories based on value, demand, or importance. Random sampling randomly chooses a certain number of items to count while control group focuses on a small group of representative items and counts them regularly. Depending on your inventory characteristics, business objectives, and resources, you can choose the method that best suits your needs. Moreover, ABC analysis can help you detect errors across your entire inventory while random sampling can help you avoid bias or preference. Control group, in turn, can identify the sources and patterns of errors and apply corrective actions.

4 Schedule your cycle counts and follow up

Cycle counting is an ongoing activity that requires regular scheduling and follow-up. You need to plan your cycle counts based on your chosen method, your inventory size, and your business cycle. You also need to allocate enough time and resources for each count and avoid interruptions or distractions. Furthermore, you need to follow up on your cycle counts by reviewing the results, analyzing the causes of errors, and implementing corrective actions. You also need to update your inventory records and adjust your inventory levels accordingly.

5 Evaluate your cycle counting performance

Cycle counting is not a one-time event, but a continuous improvement process. You need to evaluate your cycle counting performance periodically and compare it with your goals and benchmarks. You can use metrics such as count accuracy, count frequency, count completion, and variance reduction to measure your performance. You can also solicit feedback from your staff, customers, and suppliers to identify areas of improvement. By evaluating your cycle counting performance, you can identify your strengths and weaknesses and make adjustments to your cycle counting strategy.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?