What is Cycle Count?
Cycle counting is a method of taking inventory for a particular stock that is repeated with regular intervals and is used for updating the records periodically without carrying out physical count. In contrast to the most common counting approaches, cycle counts occur at fixed intervals, focusing only on parts of the shelves or on certain types of products. The purpose of cycle counting is to make it easier for companies to maintain accurate records of their stocks, manage the working of the warehouses and at the same time minimize the cases of stock loss.
What is Inventory Cycle Counting? 
Inventory cycle counting is a managerial approach of physical stock check by counting a selected number of items in a particular area of the warehouse or distribution center at predetermined intervals of time. While it might be ideal to shut down operations and physically count all the inventory, organizations utilize cycle counts while they work.
Automated Cycle Count: Inventory Cycle Counting Software
A current feature provided by inventory management software is the simplification of cycle counting since it is mostly computerized and provides real time inventory status. Processed in conjunction with barcode scanners, RFID and/or ERP platforms, this software weaves into a smooth chain that effectively acts as a safety net in identifying discrepancies before they become an issue in production or stock sales.
Benefits of Cycle Counts:
The cycle count in warehouse are also a great way for businesses to keep a check on their assets at regular intervals, instead of waiting for a physical inventory count to take place which can reduce disruptions significantly. Here are some additional key benefits:
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Improved Accuracy:
Preventative maintenance decreases the chance of having to take large correction factors to correct inventory discrepancies stemming from manual entries or delays in the process.
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Reduced Operational Disruptions:
Instead of having to close down operations in order to physically count all the inventory, cycle counts in inventory only targets small segments of the stock.
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Enhanced Inventory Control:
Improved control over the inventory aims at increasing the reordering point reducing on chances of stock out or over stocking.
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Cost Savings:
The cycle counting inventory reduce the possibility of the following scenarios: a product is lost or misplaced and this means that it has not been sold, or the product was bought but it was not available in the shelves and that means extra costs of stock holders have to be met.
What Are the Advantages of Inventory Cycle Counting Software?
For companies in manufacturing and distribution, inventory cycle counting software provides several advantages:
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Automation and Real-Time Cycle Data:
Cycle counts that are automated also eliminate the need to manually input data and can give companies and manufacturers and distributors real-time data that will enable them to make informed decisions.
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Integration with ERP Systems:
It can also link with ERP systems that mean it can easily transfer information from inventory and production systems and sales channels, which is critical in supply chain management.
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Enhanced Productivity:
Notifications and count schedules enhance the automation of processes enabling employees to engage on other vital functions that may be pivotal to the functioning of an enterprise.
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Productivity Scalability:
With the growth of the businesses, inventory cycle count software is adaptable in a way allowing distribution networks and product portfolios to grow.
How to Implement a Good Cycle Counting Inventory:
Effective cycle counting helps to improve inventory accuracy and efficiency of the company. Here are some essential steps:
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Choose a Counting Method:
Select a counting technique for counting your inventory depending on the type of inventory you are dealing with, you could use a method for instance, where you categorize your inventory based on value.
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Set Counting Frequencies:
Determine the frequency for each category where for high value or fast moving items were counted more frequently.
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Prepare and Train Staff:
Educate your employees on cycle counting procedures and those applications or tools that may be involved.
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Monitor and Adjust:
Cycle count data should be reviewed regularly and the counting plan modified to reflect any changes that have occurred on inventory.
Enhance Inventory Cycle Count with SowaanERP’s Inventory Management:
Sowaan ERP involves an enhanced and connected inventory management which can help to tackle the problems with inventory cycle counts. With real time inventory monitoring coupled with efficient automation and Business Intelligence, SowaanERP helps your business to manage inventory effectively and with minimal disruptions. Due to its flexibility and ability to grow with businesses, SowaanERP is best suited to the manufacturing and distribution businesses where accurate stock tracking has an immediate impact on operations and revenues.
Optimize your cycle counting with SowaanERP to ensure an efficient continuous inventory management that will benefit your business needs.
FAQ SECTION:
Why is cycle counting important in inventory management?
Cycle counting is critical in inventory management because it allows a business to update its stocks’ status without conducting a complete physical stock count. Dividing the inventory into smaller segments enables companies to conduct frequent counts and avoid the experiences of having a stock out or overstock situation. It allows continuous monitoring of inventory levels which results in improved operation and higher customer satisfaction.
How inventory cycle count procedures can impact on financial management?
Inventory cycle count procedures have a relationship with the financial management because stock records are the main origin of information that has a direct impact on the financial statements and company’s budgets. By using the accurate utensils in the business, unnecessary expenses associated with the excess stock are prevented, stock outs are prevented as well as appropriate decisions on what to buy are made.
How often should you do cycle counts?
The regularity at which cycle counts are conducted depends on the nature of the inventory, its rate of usage and the general functioning of the business. Specifically, items with high value or turnover rate should be counted more frequently, that is, for example, on a monthly or weekly basis, while items of low importance can be counted, say, quarterly or semi-annually. Some organizations apply a classification system for instance ABC analysis to assess the cycle count frequency depending on the value of the inventory.