Each year businesses worldwide perform complicated, labor intensive physical inventory counts. These counts typically reveal a variety of inventory inaccuracies, and if you are like most businesses, creates more.
Warehouses and distribution centers have begun to implement customized cycle counting programs to increase inventory data accuracy and improve customer service levels.
The best practice of performing physical inventory counts with hand-written paper tickets has been replaced with the utilization of automated data collection tools. Warehouse and distribution centers are now integrating these devices into their warehouse management software to count, verify and update inventory data in real time. This helps to increase the efficiency and accuracy of the overall count process. Businesses are no longer required to shut down operations to perform counts, but rather perform small batch counts on a regular basis as time permits.
Cycle counting schedules vary on a business to business basis. The inventory value, flow through rate, warehouse activity levels and staff availability will all affect how often inventory items are counted and which are counted more frequently than others.
Consider these concepts when developing a cycle count strategy for your warehouse or distribution center:
- Count by bin rather than product
- Perform cycle counts on items that most frequently have discrepancies
- Improve productivity by interleaving count activities with normal activity
- Refrain from skipping empty bins
Using a real time warehouse management system with these practices can produce measurable benefits for your business. Performing these regular counts in lieu of full physical inventories allows businesses to create an accurate flow of data throughout the organization. This will help staff to better service customers, reduce inventory holding costs and increase facility efficiency.
Stay tuned to this series of brief videos to learn more about warehousing and distribution best practices for your growing supply chain operation.