Question

Discuss five (5) advantages of cycle counting? Full explanation

Answer 1

Besides the obvious benefit of eliminating the need to perform a yearly physical count, cycle counting provides businesses with many benefits, including: Improved operational efficiency. Improved customer service. More accurate inventory records.❤

Answer 2

A

1. In order for cycle counting to do you any good, it MUST become a part of your daily or weekly routine. Too many companies make the mistake of not counting their inventory often enough. If you rely on sporadic cycle counts, you will only receive sporadic results. You can only get the full benefit of cycle counting by counting your inventory on a regular basis (either daily or weekly).
2. Create a schedule for cycle counts. Your company is unique, so you must create the schedule that works best for your company. However, we recommend developing a 13 week cycle counting calendar. This will ensure that every item in your warehouse is counted at least once during the 13 week period.
3. Plan and prepare before you start counting. As we discussed prior to this blog, preparation is key to a successful physical count, and the same is true for cycle counting. Make sure that your warehouse is organized and that you have a plan in place for the inventory counting process.
4. Close any open inventory transactions that you are counting before you begin. Make sure that you’ve completed all overstocking, understocking and back stocking before you start counting inventory. All received orders need to be received in your ERP or accounting system and put away. If you have transactions that are still open, they will need to be reconciled with your count before closing and posting the cycle count.
5. Start with a small portion of inventory. Cycle counting should not overwhelm you; it’s meant to ease the stress involved in inventory management, not add to it. Start out small and work your way up. Don’t try to count your biggest or most popular item right away. Start with items that have less movement. Take the time to learn how your inventory counting software works and familiarize yourself with the cycle counting system before you jump into the process.

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