Physical counting can be a messy process that consumes a lot of time and resources. Today, efficient warehouses are implementing the popular inventory counting solution — Cycle counting. This astounding practice permits warehouses to count several items in a number of areas without counting the entire inventory. Moreover, it guarantees that each item is counted several times annually. Those companies who ace it attain higher productivity, and seldom look back on physical counting. But why is it turning it into an essential practice that every company intends to implement?
- Minimize time
Physical counting turns out to be a lengthy and time-consuming process. Whereas Cycle counting involves regular counts of inventory using relatively smaller samples than the actual amount of inventory the warehouse carries. It shortens the time between physical counts of any desired item in the warehouse.
- Negligible errors
As there is a relatively smaller amount of inventory, that shortens the time frame and reduces the discrepancies. The results are monitored on a frequent basis. This timely identification of errors gives management the power to rapidly respond to issues. These issues can be identified with purchasing, shipping or, even customer assistance and resolved at the earliest.
- Operational efficiency
Negligible errors prompts accurate inventory records and furthermore helps in fewer inventory write-offs. The overall operational efficiency of the warehouse is improved by avoiding wastage of time and crucial resources.
- Focused decision making
With this continuous assessment, you tend to take more targeted and informed buying decisions as you focus on a smaller subset. You also create a better inventory record and decipher which items are in abundance or out-of-stock.
- Improved satisfaction
Consequently, you have improved services that indirectly lead to higher sales. The workforce is effectively utilized as no employee spends countless hours in planning the counting process and encountering stoppages. This turns out to be a win-win situation for the organization as well as customers.
- Accurate reports
With well-maintained records, there is accurate information about products which helps in a quicker delivery. After achieving a more reliable financial reporting, you also save in personnel costs and plant downtime. Hence, it is highly recommended to bring it into practice.
Hope your ‘why’s on how to reap the benefits by implementing your cycle counting program are answered. Well, the most difficult part is starting, so start with a small portion of the inventory. To conduct accurate cycle counts, many organizations use warehouse management software like Leanafy to implement a proficient inventory control system. These systems are integrated with barcode scanners that automatically allow identifying and executing inventory counts.
Here are some tips for optimizing the process:
- Setting different Count Frequencies for different segments based on ABC Analysis(https://docs.google.com/document/d/1Ui_aRSN4pcx-ijxZ2im3xZk-FQtsrF4_8l_l_74P9Ck/edit?usp=sharing)
- Measuring Inventory Accuracy regularly
- Choosing the right people for the task
To sum up, cycle counting increases efficiency up to 99% however implementing a cycle counting program can be an expensive process. So, before finalizing the decision, involve members of the organizations from other departments like finance, IT as well as the executive-level team. In any case, one thing is without a doubt, this practice is an investment for increasing the efficiency of the organization’s business processes and encourages you to make more educated decisions in the future adding to your financial strength.
Once you start with cycle counting, it will possess a significant part in your daily or weekly schedule. So begin today, don’t pause the entire workflow of the warehouse for physical counts, it’s time for optimal inventory management!