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Cycle Counts & Its Benefits

It’s that one time of year that everyone dislikes, no matter what your position, if you work in a warehouse, physical inventory time. If fact in many companies, especially SMB sized businesses, it can involve the entire staff having to come in on a weekend or staying late on a Friday night to perform this least liked of tasks.

So, if physical inventory counts are so universally disliked by staff why do warehouses continue to perform them? What are the reasons for performing them? And is there a way that businesses could potentially do away with them all together? That’s exactly what we’ll discuss in this article. So, let’s dive in.

There are a multitude of reasons why companies and their warehouses need to perform physical inventory counts. This can be due to inventory spoilage, expiry, damage, and theft. It can also be because of poor inventory control, error prone processes, disorganization, and paper tabulation. To one extent or another these variables are controllable by the business but inefficiency in tracking over time causes discrepancies to slip through. These variables and discrepancies put company warehouses in a position of playing catchup and fighting a never ending battle to ensure that they have accurate inventory counts.

Physical inventories are thus required, usually on a yearly basis, to “reset” the inventory stock levels to what they actually are compared to the records on hand. However, while a physical inventory count will provide an update and new starting point, physical inventories do have drawbacks.

One is the fact that while a physical inventory will provide a clear picture of the inventory currently stocked, it still doesn’t give a reason for the discrepancies or where the inventory went in the case of a short fall. This means that more time and resources are required to try to track down this reason discrepancy, sometimes without success. Furthermore, as time passes between physical counts this investigative time is only compounded since there are bound to be more of these similar type errors.

Another drawback is that inventory counts are not always accurate in themselves. People may miss count or tabulate incorrectly; this could cause errors being entered into you tracking method when in fact the original was correct.

Finally, is that in the case of an all staff on hand approach people are usually less than motivated, especially if they don’t work in the warehouse or if it compromises their hard earned time off, nor can they be counted on to be reliably exact. Staff who do not regularly work in a warehouse aren’t accustomed to do doing so. And while the job may seem straight forward being in a role that you’re not used to performing is more than likely to cause errors.

Yet with all these inefficiencies countless warehouses still stand by and rely on this type of method. But is there a better way? Cycle counting has proven to be that method and many companies are employing it to the point that it is becoming best practice. So, what is cycle counting?

Cycle counting unlike a physical count is a continuous method whereby which inventory is methodically and regularly verified to ascertain the quantities of each item within each warehouse location. The goal is to make the job of verifying stock levels more manageable. By verifying inventory quantities on a smaller scale, but on a more regular basis, warehouses can find errors quickly and address them sooner rather than let them linger between physical inventory counts. This makes the entire process of verifying your inventory easier and fits practically into your ongoing workday and schedule.

Cycle counts then not only provide a level of accuracy when it comes to your inventory but also increases efficiency and helps manage your inventory better. Not only this but cycle counting also lowers handling for exceptions when discrepancies do occur, eliminates both labor costs and service downtimes due to physical counts, and ensures that you have stock to fulfill on all orders.

But how can warehouses implement this methodology? First and foremost is to have the right technology in place. One of the key pillars to introducing a cycle count is by implementing a WMS. A WMS will allow your business to accurately track your inventory that is coming in and going out of your warehouse. A WMS should also provide a key component to accurate and efficient inventory management and that is barcode scanning, which includes item and location scanning. Akatia’s WMS for Salesforce, WAM, provides both these features and lets businesses perform cycle counts on their inventory all in real-time.

With a WMS that supports real-time inventory management and barcode scanning managers will be able to set a methodic schedule for which items to verify on a daily basis. Warehouse workers based on this schedule can go and scan verify requisite inventory items against the real-time data all from their handheld scanner device. The WMS will thus ensure that the feedback from the cycle count is accurate and if any issues occur the reason can be deduced, and a solution obtained.

Furthermore, a solution like Akaita’s WMS for Salesforce, WAM, comes with out of the box reporting and dashboarding tools. This allows you to report every day on your inventory, and if a discrepancy does appear it can immediately be checked out to ascertain what the issue is and see if a correction is necessary.

Because no shutdown or interruption is required cycle counting becomes part of the everyday management of the inventory making it a seamless part of your warehouse processes and tasks. As we can see cycle counting provides a clear benefit over traditional wall to wall physical inventory counting. By implementing a cycle count methodology supported by a WMS with the right features and functionality you’ll gain efficiency and more accurately manage your inventory.

If you’re looking to transform the way you manage your warehouse and inventory, click the link below to get in contact with us. We’d be happy to speak with you!

Also for more information feel free to take a look at our Salesforce AppExchange listing for more information about WAM, the WMS for Salesforce.


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