In warehousing, inventory accuracy is paramount to ensure smooth supply chain operations.  

Cycle counting is one notable method that has stood the test of time, enabling businesses to count and maintain inventory effectively. Without shutting down your operations to conduct a full-scale count, it helps to prevent overstocking or stockouts and ensure inventory integrity.  

However, despite its effectiveness, cycle counting is prone to errors. For that, you have warehouse management solutions (WMS) that automate the whole inventory cycle counting process.  

Read on to understand the cycle counting process and the role of WMS in automating it. 

Understanding Cycle Counting  

Cycle Counting is a method where you count a subset of your inventory items at a specific time on a set day. Unlike physical inventory, which comprises counting all your inventory together at once, it is when a small set of items are picked periodically and counted.  

You achieve continuous stock visibility by dividing your inventory into manageable sets for regular counting. These sets are divided according to a specific criterion, such as their turnover rate, SKU type, or size.  

The count result is taken as a reference and compared with the inventory count in your system to determine whether it matches. 

For instance, if the SKUs counted this month are roughly 15% below the count in your records, you can assume that the rest of your inventory has probably experienced a 15% shrinkage.  

Challenges In Manual Cycle Counting  

While inventory cycle counting has numerous benefits, it also has its own set of challenges: 

1. Time-Consuming And Labour Intensive  

While you’re only counting a batch of your inventory, cycle counting is still time-consuming when done manually. It will take time for any staff member to count off every item by hand and add to spreadsheets to maintain records. This often leads to another problem: hiring labourers to keep track of inventory.  

2. Susceptible to Errors  

If not appropriately conducted, cycle counts can be inaccurate. This is because they are dependent on manual counting. Any discrepancy or error in inventory records will result in having more or fewer stocks than needed.  

3. Unpredictable Demand Variations  

Unexpected fluctuations in demand and stock movement can happen during cycle counting. This leads to problems with inaccurate inventory levels and potential stockouts or overstocking situations. 

Role of WMS in Automating Cycle Counting 

A warehouse management system is a software application designed to optimise warehouse inventory management for profitable operations. It automates cycle counting, drastically improving inventory accuracy and ensuring proper stock levels.  

Some ways warehouse management solutions help with efficient cycle counting are:  

• Real-Time Inventory Visibility: WMS offers real-time visibility into your inventory levels and locations within the warehouse. This visibility helps you to conduct accurate cycle counting based on the most up-to-date information.  
• Schedule Counts: A WMS system helps to determine optimal cycle counting frequency and schedule for your inventory based on factors such as demand, value, turnover, and risk. Depending on these factors, it can even prioritise and segment your inventory into different zones or categories. 
• Utilisation of Barcode and RFID Technology: Many WMS systems integrate with barcode and RFID technology to facilitate quick and more accurate data capture during cycle counts. These technologies are available as handheld devices to scan items, and they automatically update the counts on the warehouse management system to ensure no discrepancy.  
• Automated Alerts: Some WMS solutions generate alerts when an error occurs during cycle counting. They compare the cycle counting results against inventory records to help spot discrepancies and take measures to maintain efficient warehouse inventory management.    

Final Words  

Cycle counting is a critical component of successful warehouse operations. Automating this process with warehouse management solutions reduces cost and saves time while ensuring inventory accuracy. The system even helps to compare results with expected inventory, identify variances, and generate reports to make timely and informed decisions.  

If you want to invest in one, check out the Quinta WMS, which has multiple features to manage the day-to-day operations of a warehouse effectively.