Cycle counting is becoming ubiquitous in warehouses around the world, but there are still steps you can take to stay ahead of your competitors and make your process more efficient. These six cycle counting best practices will help you see great returns with a faster, more accurate count.
- Don't Make It A Surprise - Annual physical inventories throw your whole operation off track for days or weeks at a time. The purpose of switching to cycle counting is that your inventory counting will be ongoing and up-to-date all year. Thus, it needs to be a part of everything you do in the warehouse. Instead of making a big deal about each daily cycle count, focus on training your team to think about inventory all the time. This means keeping stock locations clean and organized, resolving stock errors quickly, and more.
- Have a Full-Time Counting Staff - Trying to squeeze in counts on top of your team's existing tasks will just complicate things and lead you to fall behind. The best thing to do is have a full-time counting team and team leader assigned. This ensures that counts are done correctly and on time.
- Include Redundancy - Even your best counters can make mistakes from time to time. Instead of blindly adjusting your inventory based on a single person's count, you should have two separate team members conducting counts independently. Then you should compare the numbers blindly side by side at the end of the day to determine the margin of error and if you should explore the issue.
- Push for a Quarterly Cycle - The goal of cycle counting is to ensure that all of your high value/high volume products are being counted several times each year to close any gaps in your inventory data. Some organizations take it to the next level and complete one full cycle every quarter. That means that even your slowest moving items are being counted four times each year, and your fastest moving items are being counted even more often than that.
- Do Inventory Early - The earlier in the day you are able to knock out your inventory counts, the less likely there are to be discrepancies due to the current day's shipments, receipts and returns. If your inventory team can hit the floor before the rest of your staff is operating, they will have an easier time.
- Make Accuracy Your Priority - Many companies are so familiar with the disruptive nature of inventory counting that they want to get their cycle counts to be completed as quickly as possible. Unfortunately this is the wrong way to approach cycle counting. Your primary goal for your cycle counting team should be accuracy. Speed will come with time, but an inaccurate cycle count doesn't provide any value to your organization.
There are many other practices you should consider as you are implementing your new cycle counting program, but these six best practices are designed to give you a strong starting point. Make sure that you are documenting all parts of your system as you grow and learn to ensure that your system continues to improve as you grow.