Benefits of Cycle Counting Over Annual Inventory Counts

Warehouse operators can use their existing barcode technology to facilitate more efficient and cost-effective inventory management. Cycle counting provides continuous or frequent updates of stock and can effectively replace an annual inventory count.

Under a cycle counting system, employees count selected items as part of their daily duties. Some items might be counted more frequently and others less so, but all items will be counted at least once per year – although, many experts recommend counting once every 90 days.

Although implementing a cycle counting system requires some investment in technology and training, this method is a great improvement over conducting annual inventories. Here are just a few of the advantages cycle counting has over conducting full inventories:

Creates No Disruption to Warehouse Operations

Traditional manual inventory counts require a facility to cease regular operations for hours or days, as well as significant staffing to perform them. Alternatively, inventory counts can occur outside of normal operating hours, but at significant cost if workers are entitled to receive overtime pay.

Cycle counting does not require any alteration to normal operations, nor does it require excessive hours and labor to accomplish. Instead, employees incorporate cycle counting into their daily routine.

Gives Flexibility in How Your Inventory is Counted

Cycle counting may be completed in several ways, as long as items are counted on a consistent schedule. For example, it could make sense at one warehouse to count every item in a particular area once a week and items in another area once a month. Another facility might find it advantageous to count high-value items weekly and items of lesser value less frequently.

Increases Responsiveness

An annual inventory count provides limited information about how long specific items might stay in a given warehouse. Cycle counting provides more recent data about item movement, giving a warehouse manager more insight and accuracy in anticipating future needs.

Agile companies must anticipate the possibility of supply chain disruptions continuing intermittently into the foreseeable future. Cycle counting gives them a means of ensuring critical items are on hand and in adequate quantities. It also prevents premature ordering and the associated costs of carrying excess inventory.

Provides More Transparency

Cycle counting will reveal shipping, receiving, and inventory management errors sooner than an annual inventory count can. Understanding where the system is breaking down allows a warehouse manager to implement effective remedial measures rapidly.

Discourages Theft in the Warehouse

In a cycle counting system, all warehouse inventory is counted periodically. Employees know discrepancies will be noticed sooner rather than later, and investigating who had access to the item at a given time is easier when the relevant timeframes are short. These factors might discourage dishonest employees from stealing, and provide employers information they could use to deter theft.

Instills Confidence in Your Business Decisions

Once a cycle counting procedure is established in your warehouse, inventory management and buying decisions will become more manageable because data will support them. Expeditated shipping fees and other avoidable costs will be reduced, because there is always recent, accurate stock information available.

Improves Customer Service

Cycle counting reduces backorders and ensures popular items remain in stock, satisfying customer demand for quick delivery. Salespeople can take orders with confidence that the item will be available, and ship as promised.

Let a 3PL Provider Tailor a Cycle Counting System to Your Needs

Brown West Logistics offers well-tested expertise in inventory management functions, from training workers and promoting buy-in, to partnering with technology suppliers that offer the most advanced and adaptable software. To learn more about the benefits of cycle counting over annual inventory counts, get in touch with Brown West Logistics today.