22 April 2022 Check out the tips for performing cycle counting and discover how the WMS can be a powerful ally for your execution If you have read our latest text on cycle or rotating inventory, you have surely already been convinced of how advantageous the periodic counting strategy is to ensure effective inventory control, high accuracy, and cost reduction. Unlike the annual/general inventory, which requires a halt in activities for counting execution, cycle counting is integrated into the operation routine without requiring process interruptions, function shifts, or employee overtime. Therefore, it is a practice that should be adopted in your warehouse, with the support of the WMS system, which will automatically coordinate the entire process. You may have already adopted cycle counting in your business or plan to implement it as soon as possible. Whether you are in one situation or the other, it is important to know the best practices for conducting this type of inventory to achieve the desired results. And that’s what we’ll talk about in this text. Before presenting important tips for effectively conducting cycle counting, we remind you that you can define the counting criteria based on the specifics of your operation, conducting inventory by sampling, moved items, quality, geography, product, or curve, for example. In planned counts, the criteria and frequency of counting for each group are defined. However, there are also exception counts, carried out when an incident occurs with a product, either during internal movements (storage/replenishment) or at exit. In this case, it is important to request an exceptional count to adjust the stock. The great advantage of performing cycle counts is that you will periodically have accurate and updated data on your actions, making quick decisions if discrepancies are detected, thus preventing the identified inconsistencies from accumulating and turning into significant losses for your company. Best Practices for Cycle Counting First of all, you need to develop a specific inventory policy for your company, considering the right strategies for your type of business and the type of merchandise you work with. It is also important to periodically monitor inventory information. If your business already has a WMS system, this control is easier because the software provides real-time inventory information. With WMS, you can also conduct cycle counts with greater agility and accuracy, as the system automatically generates counting orders and cross-checks data to detect discrepancies. Discover other tips to optimize counts: 1. Maintain Consistency and Frequency Maintaining consistent cycle counts throughout the year ensures that you have more assertive and updated information about your inventory, obtaining a trend line that assists the Purchasing and Sales teams, as well as helping monitor losses and obsolescence, preventing them from occurring. By relying on WMS, you will have the ideal tools to plan the execution of counts at the right interval, in addition to being able to monitor real-time data and evaluate performance and efficiency based on the presented metrics. All this information is essential for good inventory management. 2. Consider ABC Classification Separate your actions into categories based on their value and sales volume: A: The top 20% of products that account for 80% of sales. B: The middle 30% that accounts for 15% of sales. C: The bottom 50% that represents 5% of sales. This will give you an excellent understanding of what and where your best products are and which should be inventoried more frequently. You should also focus on maintaining the ideal inventory level for these goods, avoiding stockouts. 3. Keep Products in the Same Position After choosing an area/category to perform cycle counting, ensure that no additions or modifications to the inventory are allowed in the area during the count. 4. Train Your Employees Operators who will work directly with the counters must be well-trained to correctly carry out the process and identify all the peculiarities of the products, performing quality control. They must also know how to proceed in case of any event (shortage, excess, failure, etc.). By using WMS, your employees will have great assistance, as the system manages everything that has been checked, avoiding the common confusion in manual processes. The WMS also issues notifications whenever a discrepancy occurs. 5. Use Mobile Devices Relying on mobile counting tools can help you improve the speed and simplicity of the inventory cycle. Relying on data collectors, for example, to automatically input numbers instead of following manual processes improves accuracy and delivery times. 6. Prioritize Double-Checking and Counting as a Team It is better for cycle counts to be performed by two employees per count. This way, the risk of errors due to fatigue and neglect of details is eliminated. It is also advisable to conduct a blind comparison of the counts before making changes. 7. Optimized Layout, Always! Once the cycle counting process is established, you should aim to optimize the layout and organization of your inventory to ensure the process is executed simply and quickly. 8. Track All Your Metrics If you want to achieve excellence in cycle counting, reaching increasingly higher levels of accuracy, you need to carefully evaluate all the information obtained in each count. Determine which indicators you will evaluate during and after the inventory, investigate the causes of possible discrepancies, adopt the right measures to solve problems, and always work to ensure that your inventory is correct. It is also at this stage that the WMS will be a powerful ally, accurately providing all the necessary information for evaluation. Remember: when you have technology on your side, you eliminate errors, reduce hours and hours of rework, and, most importantly, prepare your business for the future! Cyclical Inventory: Best Practices Deagor WMS per ecommerce può aiutarti!