Advantages of Cycle Counting

Cycle Counting

Small entrepreneurs faced with limited resources can find various aspects of running a business challenging. Managing inventory manually and checking for inaccuracies can be an extremely time consuming task. While there are technology tools to help you manage inventory, including TRXio, it is also important to implement an in-house system of manual inventory count. An ongoing cycle count is a good option as an inventory auditing process, especially for small, product-based businesses.

Cycle Counting Best Practices

Effective cycle counting occurs throughout the year and on a regular, scheduled basis. This allows businesses to focus specifically on a subset of their inventory. It is a great option for businesses of all sizes and is less disruptive than doing one massive count per year, which often means shutting your doors for a day, or working through the night. When you implement an ongoing process of measuring inventory there are less chances for human error. You can even tailor your cycle counting to focus on products with higher movement volume, higher value, and/or products critical to the business’s continued success.

One advantage that cycle counting has over annual physical counts is that it does not require business operations to stop, even for a day. You can easily set up a system to regularly count smaller batches of your product inventory. This will also ensure timely tracking of products which can further help keep financial losses that incur from mismanagement of inventory, to a minimum. Some of the major benefits of cycle counting include:

  • It saves money.
  • It reduces operational disruption.
  • It is less complicated than an annual physical count.

Advantages of Cycle Counting

Less disruption. With a weekly/bi-weekly cycle count, you can easily avoid major disruptions in your warehouse. A full-day, annual inventory count forces you to shut down your operations until the job is accomplished. Cycle counting, in contrast, evaluates your inventory accurately and on a regular basis with minimal disruption.

Cut down on clutter. Cycle counting is a process that often requires you to break down boxes as soon as they arrive and not store them until inventory is being done. This allows you to optimize your warehouse or stockrooms for smoother performance. In other words, it keeps traffic ways clear and assures that everything is where it should be when you are searching for it.

Make better buying decisions. Cycle counting, as you know, is an ongoing process. You will therefore continuously have up-to-date access to your inventory. While this involves focusing on a division of inventory and having smaller check-ins etc., it will also help you to make more informed and targeted buying decisions. This can be extremely useful if your suppliers are offering special deals or discounts. Knowing exactly what you need or don’t need will ensure you make an informed purchase and not an impulse buy.

Be focused & keep inventory as your priority. As almost all product-based business owners know, inventory control can be frustrating. With small and regular cycle counts, you can keep a close eye on all stock, and are able to be more informed and confident about all of your business decisions. This in and of itself will make running your business less stressful.

All these factors help reduce discrepancies typically associated with the inventory process in product-based businesses. By shortening the time between inventory counts, you decrease the chance that errors, which may have crept in, will go unnoticed. There are many advantages of cycle counting, including that it allows you to catch mistakes faster, makes finding items in your warehouse easier, and allows you money in the long run.

What benefits do you see to cycle counting over an annual inventory count? What limitations, if any, do you think cycle counting has? What are your cycle counting best practices?

TRXio provides cycle counting and inventory control management processes to small businesses. For more information, contact us at 844-868-7225.

Photo Credit: MindFieldGroup2014 via Compfight cc

More Information on Cycle Counting:

Other Inventory Management Techniques:

ABC

Cycle Counting

Dead Inventory

Decline Stage

Excel/Spreadsheets

Just-In-Time Inventory Technique

Inventory Management Techniques: The Rundown

Kitting

Labeling

LIFO or FIFO

Manual

Min/Max Inventory Method

RFID Versus Barcodes

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