Moving from annual physical inventory counts to a modern cycle counting program is one of the best decisions you can make today. However, the transition requires careful planning and budgeting. It isn't as simple as just changing the way you schedule your counts. You will also need to evaluate the costs of staffing, hardware and software needed to make your program successful. Here's a look at some of the costs associated with implementing cycle counting for your warehouse.

The cost of personnel for cycle counting is two fold. First, you need to have enough staff available each day to meet your counting quota. This typically means assigning certain members of your team to counting exclusively, or even hiring new staff for this purpose. You will also need a team leader who will manage and coordinate your counting program. Depending on your current staffing, one of your existing managers may take over these responsibilities.

The other half of the personnel cost is the cost of training. You may need to work with a cycle counting specialist who can train your team to count efficiently, effectively and accurately. They will also train your team on all of the software they will be using for the counting program. This is essential to the success of your mission.

Software

It is likely that your Warehouse Management System already has most of the tools in place to manage your cycle count. However, if it is missing any key elements, you might be in the market for additional software that will get your cycle count off the ground. If your WMS was custom built, you may enlist the help of your software development team to add cycle counting functions.

Hardware

There are many tools available today to simplify inventory taking. Handheld computers, paperless dispatching systems and more make it possible for your team to record data digitally, and for you to receive instant results. Equipping your team with the right resources from the very beginning will go a long way toward making a smooth transition and ensuring that your counts are as accurate as possible.

These are the three main areas where you will encounter costs associated with rolling out a cycle counting program. In general, your hardware and software will be one-time costs, but your training costs may be ongoing as you expand the range of your program. It is important to understand all of these costs as you move forward so that you can set a reasonable budget for launching the new inventory program.