By Dr. Biraja Nath
Warehouses dealing with large inventory volumes necessitate a variety of specialized procedures. Similarly, facilities that haven't automated these processes may encounter difficulties with cycle counting due to the complexity of their operations. Manual stock audits are both resource-intensive and inefficient, as they can potentially disrupt employees from their usual duties for an indefinite period of time.
When manual cycle counting processes are prone to errors, they can unexpectedly disrupt warehouse operations. Physical inventory counts can result in inaccuracies that lead to inventory shortages. Additionally, inadequate automation of inventory tracking and tracing capabilities can increase the risk of theft in the workplace and cause unexpected system downtime. Accurate cycle counting is essential for warehouses to prevent stockouts, which can severely disrupt operations and potentially force the facility to close temporarily. Incorrect inventory counts can result in production lines being stopped indefinitely or excess stock taking up valuable warehouse space.
The approach to managing inventory varies among businesses. While each organization may have its own practices, there are some widely recognized best cycle counting methods that are commonly used in successful warehouses. In this article, we will explore these recommended techniques and then introduce a platform, Smart WMS from Nirmalya, which can help improve the accuracy and efficiency of cycle counting through automation.
Cycle counting and physical inventory are commonly mistaken as being the same concept, but they actually refer to two distinct procedures. Physical inventory, in particular, entails shutting down your warehouse distribution center entirely and ceasing all operations until you have thoroughly accounted for all existing inventory items.
The physical inventory process can be costly. Any interruption to your ongoing operations comes with a price tag. You must allocate a considerable amount of labor resources, often leading to the need to pay for overtime hours in order to efficiently complete a physical inventory count. If your operations are not meeting expected production rates or failing process audits, it will inevitably result in a slowdown. You may have to draw from other departments like engineering and technology just to meet your deadline, while those key employees are diverted from their core duties.
Given the challenges associated with conducting physical inventory counts, many companies opt to delay these events as a cost-saving measure. However, postponing these counts can lead to inaccuracies and complicate the documentation process, ultimately increasing the risk for errors.
Cycle counts, conversely, focus on a single sample group of items within your total inventory. The accuracy of this sample is assumed to be representative of the overall accuracy of your inventory. Warehouses typically conduct cycle counts more often than physical inventory counts. These facilities subsequently reduce a lot of the logistical problems of tracking their stock, namely those of their industry counterparts who rely solely on completing a physical inventory check once a year.
When conducting physical inventory and cycle counting, it is important to recognize the potential for human statistical processing errors. To minimize these errors, incorporating an automated cycle counting platform into your inventory management process is the most effective approach. In the following sections, we will explore recommended best practices for cycle counting and discuss methods for automating this aspect of your inventory management processes.
When auditing warehouse goods, focus on achieving accuracy and efficiency, regardless of the chosen method. The frequency of cycle counting should be based on the specifics of your inventory, such as distribution rates and usage. Some warehouses opt for daily cycle counting, while others may find less frequent intervals more suitable.
It is up to you to decide the most suitable method for cycle counting. Typically, warehouses will first close all inventory transactions prior to initiating a cycle counting session. Following this, categorize your items into counting groups and utilize a designated and established counting process. It's important to meticulously document each product under every SKU and identify the items that should be given priority during the counting process.
In the majority of warehouses, the priority is given to the counting of valuable items and items that are frequently moving in and out. It is more efficient to conduct stock counts for items that have a low turnover rate, such as on a quarterly or annual basis. Ultimately, warehouses with high accuracy rates designate trained staff for cycle counting and enforce thorough auditing procedures at each step to guarantee precise record-keeping.
Automating the cycle counting process in your warehouse can greatly enhance accuracy levels. By implementing a WMS system to replace manual procedures, you can reduce labor costs, boost operational efficiency, and maintain optimal stock levels.
Implement automatic cycle counting and track stock levels in real-time with our intelligent WMS software. Reduce dependence on manual control systems, clipboards, or error-prone Excel spreadsheets. Smart WMS provides accurate and fast reporting to improve decision-making, while RFID technology and barcode scanning enable instant updates to inventory records.
Automating your cycle counting process not only saves time but also reduces the high expenses associated with managing a manual counting team quarterly in hopes of achieving accurate results. Nirmalya's Smart WMS allows warehouses to efficiently track their automated cycle counting processes and optimize data tracking by offering access to real-time information.
Implementing cycle counting is a crucial aspect for every warehouse operation. By utilizing Smart WMS to automate this task, companies can experience a substantial return on investment, especially those relying on manual processes. Nirmalya offers assistance to businesses in the industrial warehousing and manufacturing industries to optimize their cycle counting through our advanced automation platforms.
Our Smart WMS warehouse management platform streamlines cycle counting processes, reducing time and enhancing accuracy. For insights on how automation can lower expenses linked to physical inventory and manual counting, contact us for further information.
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