subject: The Cycle Counting Process [print this page] This article is third in a series of threeThis article is third in a series of three. Before proceeding please ensure that you have read and understood the articles, The Cycle of Counting and The Cycle Counting Program. You will recall that the purpose of cycle counting is to identify process errors, this then leading to root cause analysis and finally corrective action being implemented. For the information gathered to be accurate, the counts must be conducted and entered into the system in the right process step. Inventory moves, it is moved into a location, is stored there and then moved out. The critical aspect to the cycle counting process is that the count must be taken and entered into the system in the same sequence as in the physical environment. Goods arrive at a storage area, a check of the goods takes place (receipted), the goods are then put away into a location, and then orders can be picked from this location. Orders continue to be picked until the location is empty and then the location can be reused. Also note that during the time that the product is in the location it may be transferred, and moved to another location, so steps 3 and 4 may be repeated several times while in a storage area. The critical aspect in the process is the timing of the count. For example, let us say that inventory arrives, is received, and put into a location, but the system has not been updated, if a count is performed, the physical count will show stock but the system will not. By way of another example, stock is present both in the system and the location (60 units), an order is picked (10 units). If a count is done before the system is updated with the pick, then the system will show 60 available while the physical count will show 50. The same types of errors occur with transfers, inventory status (such as stock on hold, quarantined or available) and any other transaction. The critical question that must be asked; is the timing of the count in sequence with the update of the system? Technology such as RF assist in controlling operations and so updates the system real time. And so the logic follows that a count can be done at any time because the system is always up to date. This is true so long as the practices in the warehouse are also aligned with the necessary process. Understand the process and then review the practices. Correct timing of transactions will provide better information and so assist with identifying the root cause and thus implementing the appropriate corrective actions.
