Improve your Inventory Accuracy with a Cycle Count Program

Copyright 2018 Eficent Business and IT Consulting Services S.L. - Brussels, October 3-5, 2018 - #OdooExperience - www.odoo.com
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Improve Your Inventory Accuracy with a
Cycle Count Program
Jordi Ballester Alomar

Structure
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● Cycle Count Principles
○ The importance of inventory
○ What is Cycle Counting?
○ What should Cycle Count deliver?
○ Why to Cycle Count?
○ How to Cycle Count?
● Cycle Counting in Odoo
○ Setting up Cycle Count Rules
○ Warehouse Configuration
○ Location Configuration
○ Planning Cycle Counts
○ Executing Cycle Counts
○ Location Statistics

Structure
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● The Reworked Inventory Adjustments
○ New Groups for the Inventory Validation
○ The Inventory Discrepancy
○ Configure the Thresholds
○ Slot Verification Requests
● Final recommendations

Cycle Count Principles
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The importance of inventory
● The value of inventories is a major item on the annual
financial report of most companies
○ Company managers do not want to confront
shortages or excessive space tied up in stock.
○ Stockholders want to know the profits and losses in
a reliable way.
● Two options appear: full physical inventory and cycle
counting
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What is Cycle Counting?
● Regular process by which portions of inventory are
selected for counting on a regular basis.
● People, called “cycle counters”, are sent to the
warehouse to physically view and count the material
actually on hand.
● The result of these cycle counts are then compared to
the inventory records and used to make corrections.
● The full physical inventory is, in a sense, a
simultaneous cycle count of every location and every
item in inventory.
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Why to Cycle Count?
● Improved service levels through focus on improved flow
● It is more costly to address inventory discrepancies
after they have had a negative impact on the operation.
● Eliminate the need for wall-to-wall physical inventories.
● Measure accuracy of the firm’s inventory records.
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What should Cycle Count Deliver?
● Uncover root causes of inventory discrepancies, and
eliminate or reduce future inventory discrepancies.
● Increase labor efficiency, improve product flow and
customer service, by identifying early the discrepancies,
prior to those impacting on the operations.
● Meet the requirements of the accounting department
and external auditors for procedural controls.
● Provide appropriate tools, processes and procedures.
● Educate the distribution team on the importance of
having accurate inventory numbers.
● Provide the means to track and report compliance and
performance against pre-defined key metrics.
● Allow for reductions in safety stock levels.
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How to Cycle Count?
● To find, fix and minimize the stock errors we have the
following tools in our cycle count system:
○ Cycle Counts: (or normal counts) that are
completed on a daily basis on a set of predefined
rules and procedures.
○ Zero Confirmations: Are opportunistic counts
performed by warehouse operators during the
course of normal day-to-day warehouse operations.
○ Slot Verifications: are triggered when either a
normal warehouse operation or a cycle counting
operation uncovers a count discrepancy within a
slot.
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Cycle Counting in Odoo
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Setting up Cycle Count Rules
● First of all we need to configure how our cycle counting
planner will propose the locations to count.
● In order to define how and when to count we define
“Cycle Count Rules”.
● Cycle Count Rules must be defined and assigned to
one or more Warehouses. If none is assigned they will
be ignored.
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● We can define the Cycle Count Rules in “Inventory /
Configuration / Cycle Count Rules”.
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Warehouse Configuration
● We should define a Cycle Count Planning Horizon for
each Warehouse.
● We can also configure the accuracy computation and
see the rules applied in the Warehouse.
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Location Configuration
● Disable Zero Confirmations
● Exclude from Cycle Count
● Maximum Discrepancy Rate Threshold (more restrictive
than what is defined in the Warehouse)
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Planning Cycle Counts
● Cycle Counts are planned every day through an
scheduled action.
● All the Cycle Counts to be performed will appear in
“Inventory / Operations / Cycle Counts”.
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Executing Cycle Counts
● Go to a Cycle Count and execute it.
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Executing Cycle Counts
● Then execute the created Inventory Adjustment as
usual.
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Location Statistics
● Go to “Inventory / Configuration / Warehouse
Management / Locations”.
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The Reworked Inventory
Adjustments
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New Groups for the Inventory Validation
● Two new Groups are defined in “Extra Rights”
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The Inventory Discrepancy
● The discrepancy and discrepancy % is computed for
every line in the inventory adjustment.
● If a line exceeds the predefined Threshold for its
Location or Warehouse, it will be highlighted in red.
● When trying to validate an inventory, its state will
change to “Pending to Approve” if at least one line
exceeds the Threshold.
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Configure the Thresholds
● We can define the Maximum Discrepancy Percent
acceptable for an inventory line in either the Warehouse
or the Location.
● If defined in both, the one in the Location has
preference.
● If set to 0.0 in both, Warehouse and Location, the
Inventories will be validated always, no matter the
number or the size of the discrepancies.
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Configure the Thresholds
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Slot Verification Requests
● Any stock user can request a slot verification from an
inventory in state “Pending to Approve”.
● A Slot Verification Request will be created for each line
that exceeds the Threshold.
● From a configured Slot Verification Request you can
check the involved stock moves and inventory
adjustment lines.
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Slot Verification Requests
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Final Recommendations
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Thank you!
Jordi Ballester Alomar
mail: jordi.ballester@eficent.com
twitter: @jbeficent_erp
Lois Rilo
mail: lois.rilo@eficent.com
twitter: @lreficent

Improve your Inventory Accuracy with a Cycle Count Program

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