When you think of cycle counting, you may be confused by the fact that many companies use a variety of methods to perform counts. In general, there are two forms of cycle counting that are widely used, and there is a third, less common, form of cycle counting that is predominantly used for testing and implementation purposes. Here's how you can tell the difference.
The most widely used form of cycle counting relies on breaking products into groups labeled A, B and C. The A items are high priority items that must be counted constantly. The B items are common items that must be counted at least 3-4 times throughout the counting cycle. Usually this means these items are counted quarterly. In addition, the B items usually make up 70-80% of the total products in the warehouse, so this group gets the lion's share of the inventory. Finally, the C items are those that are either obsolete or very low priority. They may be counted once every six months or once per year.
The random sample is the other common form of cycle counting. With this method, the system selects a random group of products each day to assign out. In most cases, those items are removed from the cycle counting list day by day until all of the items have been randomly selected at least once. Then the list refreshes and the process starts again. In this case, all items that haven't yet been counted as part of the cycle have an equal chance of being chosen each day.
The final form of cycle counting is the control group count. Again, this is mostly a measuring and testing tool. You will select a small group of items to count over and over at set intervals. During this time, you will be able to see how your cycle counting system is working, as well as identify any weaknesses in your cycle counting strategy or training. Control groups are used to set a base line for performance as you transition to a warehouse-wide cycle counting program.
These three versions of cycle counting all play an important role in keeping warehouse inventory up to date. While most warehouses choose to use the ABC method because it helps prioritize certain items, it can also be more labor intensive during the setup phase. Thus, the random sample method may be easier to initiate if you are working with a limited timeline or limited budget.