What Is Cycle Counting and Why Is It Effective? Cycle counting is the process of counting a small, predetermined set of goods and materials frequently rather than performing a full physical inventory once per year. Effective cycle counting requires counting a certain number of bins each day, and each part is counted at a prescribed frequency. The Council of Supply Chain Management Professionals  defines cycle counting as an inventory control and management practice that refers to a process of regularly scheduled inventory counts (usually daily) that “cycles” through your inventory. Users determine how often certain items or locations are counted using frequency or dollar values segregated into “ABC” categories.

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We Know What Counts - Cycle Count Vs Physical Inventory ?
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What Is Cycle Counting and Why Is It Effective?
Cycle counting is the process of counting a small, predeter- mined set of goods and materials frequently rather than per- forming a full physical inventory once per year. Effective cycle counting requires counting a certain number of bins each day, and each part is counted at a prescribed frequency. The Council of Supply Chain Management Profession- als defines cycle counting as an inventory control and manage- ment practice that refers to a process of regularly scheduled inventory counts (usually daily) that “cycles” through your in- ventory. Users determine how often certain items or locations are counted using frequency or dollar values segregated into “ABC” categories.
The main idea behind cycle counting is to pinpoint records that are in error and determine the cause of the error. This is a very important distinction to be aware of—that the goal is to correct cause of an error and not simply to correct the error itself. Com- panies that stop short of diagnosing the error and don’t uncover the reason for it are missing out on achieving efficient inventory management that can result in lower operating costs.
Commit and Be Rewarded
To be successful in cycle counting activities, you need to be committed to performing these smaller weekly audits. Cycle counting can take time in the beginning stages, but the payoff can be significant within just one year of implementing it as a business strat- egy. Conducting daily or weekly cycle counts ensures that each item is counted and tracked in a timely fashion. Some of the benefits of cycle counting include:
Reduced Costs: Business operations are no longer interrupted by full-scale inventory audits—saving on personnel costs and avoiding warehouse downtime.
Improved Accuracy: Warehouse staff can identify and fix inaccurate data such as misplaced or lost stock. This results in higher customer satisfaction by enabling your team to report on availability of an item immediately.
Reduced Losses: Cycle counting means more real-time monitoring and helps avoid inventory shrinkage – or the loss of product due to theft, damage or expiration.
Insights to Your Business: By understanding how product flows through your warehouse, you can determine when product lines are performing well and can be expanded. Additionally, you can make better decisions, such as when to reorder a quantity or when there is excess inventory.
Operational Efficiency: Less inventory discrepancies mean fewer exceptions to handle and less time searching for misplaced products.
Source: Bastian Solutions , Written by: Chris Bratten

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