Cycle counting is an inventory control method where physical counts are conducted on a rotating basis, rather than all at once. The goal of cycle counting is to identify and correct inventory discrepancies as they happen, in order to maintain an accurate inventory count at all times. In this blog post, we'll discuss some best practices for cycle counting so that you can make sure your manufacturing business is running smoothly.

How Does Cycle Counting Work?

As mentioned, cycle counting is an ongoing process whereby physical inventories are taken periodically throughout the year. This method can be used to count all inventory or a portion of it, depending on the needs of the business. The frequency of these counts will depend on the turnover rate of your inventory. For example, if you have a high turnover rate, you will need to count more often. The goal is to spread out the work so that it doesn't become too overwhelming or disruptive to day-to-day operations. The main benefit of cycle counting is that it helps to ensure accuracy in your inventory records. This, in turn, can help save money by reducing stock outs and excess inventory. Additionally, it can help improve customer satisfaction by ensuring that products are available when they are needed.

Best Practices for Implementing Cycle Counts

There are a few best practices to keep in mind when implementing cycle counts in your business:

  1. Define what will be counted and when - First, you need to determine which items will be counted and how often they will be counted. This will depend on factors such as turnover rate and value of the item.
  2. Train employees - Cycle counting should be done by trained employees who understand the process and the importance of accuracy.
  3. Use technology - There are many software solutions available that can help with cycle counting. Utilizing technology can help to automate the process and improve accuracy.
  4. Schedule counts - Schedule counts in advance so that there is no disruption to operations. Counts should also be conducted during slow periods so that employees can focus on the task at hand.
  5. Review results - After each count, review the results to look for any discrepancies. These should be investigated and corrected as needed.

By following these best practices, you can ensure that your cycle counting process is effective and efficient. Doing so can help to improve accuracy in your inventory records and save money in the long run.

Join us for our lunch & learn about cycle counting

When done correctly, cycle counting can provide many benefits for businesses, including improved accuracy, increased efficiency, and better data for decision-making purposes. If you're thinking about implementing cycle counting on your shop floor, join us for a lunch and learn session led by our Senior Applications Consultant on December 7, 2022 titled “Cycle Counting with Materials Management.”

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