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Benefits of Cycle Counting in Inventory Management

Controlling inventory effectively is an important aspect of the success of all businesses, especially those that deal with physical products. This is essential to prevent the damaging, expiration or obsoleteness of the products. Effective inventory management helps to regulate the volume of the inventory by ensuring that there aren't too few or too many items in the store.

The issue with inventory management which gives most organizations a hard time is ensuring that their inventory management system reports inventory accurately. Accuracy in this sense refers to the preciseness of the system in determining the physical quantity and location of items in the inventory. One way in which the accuracy of the inventory can be enhanced is through Cycle Counting.

Warehouse Robotics in the Supply Chain

Although automation is already in place in many warehousing and distribution centers, its use is limited to workflow automation in warehouses. The situation is changing however as more Material handling equipment manufacturers look to bring robotics into warehousing. With this, it will be possible to introduce robotics automation into operations without any form of structural modifications in the warehouse.

What is Cycle Counting?

Cycle counting is a technique that helps in discovering the sources and reasons for inventory errors, then provide a solution to the causes of the errors so they don't happen again. As opposed to popular belief, Cycle counting is not just about counting the items in the inventory and keeping records. It’s more of a means of detecting errors and eliminating the causes of the errors. Some basic steps involved in cycle counting are:

  • Determining the causes of errors in the records of the inventory,
  • Fixing errors by correcting the causes of the errors in order to prevent them from recurring, and
  • Adjusting the inventory records.

The first and second steps involve more processes but if you are able to follow the order, you have a great chance at successfully implementing this technique in the effective management of your inventory.


Advantages of Accurate Cycle Counting

The importance of Cycle counting in ensuring the accuracy of keeping inventory record cannot be overstated. This is why you need to dedicate more time and money to successfully keeping your records accurate. Read on to get a full insight on the benefits of cycle counting.

Inexpensive to operate with improved accuracy. One of the benefits of cycle counting is its ability to keep accurate records. In keeping records accurate, cycle counting is of great help. Just as processing orders, picking and packing, and shipping are part of managing the inventory, cycle counting is an essential part too. The interesting thing about it is that it only requires a small investment at the beginning. Proceeding forward, every aspect of it requires minimum/no cost.

Improved level of customer service and satisfaction When done expertly, cycle counting helps assure you of the quantities of items in the inventory. This helps a lot in improving customer service. You will be able to make promises to your customers on the delivery of items without failing to keep the promise. In addition, your employees will also be happy because they won’t have to deal with a frustrated or angry customer.

More sales and higher revenues With improved customer service comes more sales. More sales ultimately mean increased revenues. Keeping promises is a key element of top-notch customer service. When you keep promises because you know what you have and where it is, customers will be happy. They'll choose you over the competition and stick with you for repeated sales.

There are much more benefits to cycle counting. It also helps in making decisions based on reported inventory balances. All in all, the important thing to remember is that it isn’t just about counting items and updating records. The whole point of cycle counting is to find the root cause of any error, and solve the problem so they won’t happen again. When you do this accurately, the inventory records will match the count, and you can enjoy the benefits of having accurate records.