There are several reasons that cycle counting is better than performing physical inventory counts. Unfortunately, many people dread inventory so much that the idea of being locked in perpetual inventory counting mode is scary. Here are a few reasons that you should stop fearing cycle counting and start thinking about how it will help you.
- Reducing Discrepancies - The problem with once-a-year physical inventories is the total lack of data being gathered throughout the rest of the year. Inventory time can be shocking if you suddenly discover a major discrepancy that can't be accounted for via paperwork from the last few months. It can be impossible to retrace your steps to discover where the problem occurred. With regular cycle counting, you can catch any signs of theft or mismanagement by checking in regularly. This will save you money but will also save you tons of investigation and analysis time later on.
- Keeping Inventory At The Forefront - So many companies seek to get through a physical inventory as fast as they can so they can just go back to running their warehouse "like normal". Unfortunately, this is where many problems lie. A well-run warehouse keeps inventory at the forefront of their minds and makes educated decisions based on current inventory information. Putting inventory levels out of mind and immediately returning to less-informed practices is a good way to rob yourself of profits. With cycle counts, your inventory situation will always be at your fingertips so you can't possibly make uninformed decisions.
- Improving Workflow - A physical inventory is very disruptive, not just to you but also to your vendors and your customers, even if they aren't aware that it's the cause of the problems. The flurry of action required to clean up the warehouse and get it "inventory ready" often results in misplaced orders, lots of overtime and an inability to receive new inventory on a regular schedule. By getting into the groove of cycle counting, you can combat this problem. It will keep your warehouse orderly on a constant basis and eliminate or reduce the number of shocks that you give to your customers and vendors.
These are just three of the ways that cycle counting will serve you better than physical inventory counts. Choosing to use cycle counting enhances every aspect of your business and helps draw attention to the way your inventory flows into and out of your warehouse day by day. Making inventory a major focal point can radically improve customer service and drastically change how your purchasing decisions are made.