When it comes to cycle counting, accuracy is the single most important factor. However, accuracy is not only an integral part of the process, it is also a byproduct of the system itself. The more you count, the more accurate your counts will be. Here are the three areas where you will see major improvements in accuracy with the help of cycle counting.
- Filling In The Gaps - With annual physical inventories, you go months at a time without any checks or balances on your current inventory. You are essentially operating blind throughout the year, and then when the physical inventory takes place you are likely to be surprised by the results. With cycle counting, your system is getting daily updates and there is consistent contact taking place. The result is that you aren't having to account for large scale discrepancies at the end of the year. Instead you are only solving minor mysteries on a daily basis.
- Counting Skills - Once you have a cycle counting team selected, they will undergo a robust training program that prepares them for all aspects of the count. Early on, there may be challenges, but the more counting they do, they will become more accurate and efficient. In addition, you have the opportunity to set accuracy goals for the team, so you can continue pushing for a 99.9% accuracy rate over time.
- Focuses on Value - One of the biggest limitations of doing an annual physical inventory is that all items are only counted once, no matter how important they are. With cycle counting, the majority of your time will be spent managing your high-value items while less valuable items are counted less frequently. Thus, if there are discrepancies somewhere along the way, it is significantly less likely that the discrepancy will be a high dollar error. This alone can have a large impact on your shrinkage reporting.
Cycle counting uses accuracy as both an input and output. Once you begin counting with this method, inventory accuracy will increase immediately, and it will continue to improve over time. By focusing efforts on your highest valued items, any remaining errors are relegated to low value items where they are less likely to cause a big problem. Over time, your WMS will be consistently updated and your picking team and customers will be able to trust that items showing availability will really be there.