When it comes to inventory counting, there is a lot of vocabulary to learn. You may have heard the terms "perpetual" and "periodic" being used in reference to your count. In the past, an annual physical inventory was considered to be a periodic inventory because the inventory was only counted once per counting period. Cycle counting is considered perpetual because updates happen on a continual basis. However, even within cycle counting, your inventory may be periodic or perpetual. Here's how:When Your System Updates
The terms perpetual and periodic are both used to describe how often your system updates visible inventory counts. If there is a set time that your system only pulls all of the information together occasionally and then does a batch update, it is considered a periodic system. However, if your system takes updates inventory as picks, putaways and replenishments happen, you could be working within a perpetual system.
End of Day Roundup
Many companies who use cycle counting still rely upon an end of day roundup where all of the data is brought together and the system performs adjustments. Technically speaking, this is a periodic system, even if the period is only 24 hours. At the designated point in time, the system will take yesterday's count, add any items that were received, subtract items that were picked, and verify the day's inventory count all at once. Of course, your team is keeping busy on the floor, so this updating may feel perpetual because the periods are so close together that it seems insignificant. Still, it is important to understand that your intra-period visibility into your inventory isn't 100% validated.
All that being said, many companies choose cycle counting systems that operate with an end of day periodic program because they can be easier to maintain. Perpetual systems that adjust numbers throughout the day minute to minute can be difficult to nail down and make things more complicated if there is ever an error. With an end of day round up, it is much easier to trace a single day's activities and separate things out.
Discussion about periodic and perpetual cycle counting is getting deeper into what makes cycle counting so effective today. In the big picture, cycle counting itself is always considered a perpetual system when compared to annual inventory counts, but the software can break things down even further into workable periods. Keep this in mind when speaking to a WMS implementation specialist as they describe how your cycle count will update on a daily basis.