How can you overcome common cycle counting challenges?

1 Choose the right frequency

The frequency of your cycle counting depends on several factors, such as the size and complexity of your inventory, the turnover rate of your items, the availability of resources, and the accuracy goals you want to achieve. Generally, you should aim to count your items at least once a year, but you may need to increase the frequency for high-value, high-demand, or high-risk items. You can use a cycle counting calendar or schedule to plan your counts in advance and allocate your staff and time accordingly. You can also use a software tool or system that can automate the scheduling and tracking of your counts based on predefined rules or algorithms.

3 Choose the right criteria

When selecting items to count, the criteria can vary depending on the method you use. Items that have a high monetary value or impact on profitability, such as expensive, rare, or seasonal items, are often prioritized. Additionally, items that have a high sales volume or customer demand, such as best-sellers, fast-movers, or promotional items can be prioritized. Furthermore, items that have a high risk of theft, damage, or obsolescence, such as fragile, perishable, or outdated items should also be considered. Lastly, items that have a high discrepancy between your physical and recorded inventory should be prioritized; these may include items that are frequently miscounted, misplaced, or mislabeled.

4 Ensure data quality

Data quality is essential for cycle counting, as it affects inventory accuracy, reliability, and decision-making. To ensure data quality, you should use a standardized and consistent format and procedure for recording, reporting, and verifying your counts, such as barcodes, scanners, or inventory management software. Additionally, staff should be trained and supervised on proper counting techniques, safety rules, and avoiding distractions or interruptions. Regular reviews and reconciliations of counts should take place to compare physical and recorded inventory, identify discrepancies, and update records accordingly. You should also analyze and improve cycle counting performance by tracking accuracy rate, error rate, cycle time, and implementing corrective or preventive actions as needed.

5 Communicate and collaborate

Cycle counting is not a one-time or isolated activity, but a continuous and collaborative process that involves multiple stakeholders, including warehouse managers, staff, auditors, and suppliers. To ensure effective communication and collaboration, it's important to establish and communicate cycle counting goals, expectations, and responsibilities. This includes setting clear and realistic targets, deadlines, and roles for each count. Additionally, it's important to coordinate and align cycle counting activities with other warehouse operations to avoid conflicts or disruptions. Furthermore, feedback and support should be provided to the cycle counting team by acknowledging their efforts, recognizing their achievements, addressing their issues, or rewarding their performance. Lastly, insights and best practices should be shared with internal and external partners to optimize inventory levels, demand forecasting, or supplier relations.

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?