Cycle Counting: It's Not About the Number of Bikes in Your Warehouse

In our last post, What You Should Know About Cycle Counting, we defined the process of cycle counting and highlighted some of its positive business impacts. Now, let’s discuss how to put cycle counting into practice. 

How Does Cycle Counting Actually Work?

The two most common and organized methods of cycle counting include counting according to usage and counting according to monetary value. 

If you choose to count your inventory by usage, you must first take the time to rank your inventory items. For example, you could rank your items like this:

• “A” items move the most
• “B” items move less often than “A” items
• “C” items may move slowly and require the simplest controls
• “D,” “E,” “F,” etc. if needed

“A” items would be considered critical to the health of your business, whereas an item in the "E" category would be much less critical.
If counting by usage doesn’t make sense for your business, you can also count by monetary value. As the method implies, inventory items would be categorized and counted by dollar amount. Items of higher value would be counted more frequently, as errors in counting those are more costly than errors counting lower valued items. This approach is also closely tied to your bottom line and the positive and negative impact your inventory will have on it.

How Can Your Business Get Started?

Your CEO or inventory manager will ultimately decide the most appropriate cycle counting method to use and/or how often each category gets counted. Remember, though – the point of cycle counting is to save yourself from a big year-end count; in addition, the more often you count, the more accurate your numbers will be!

Does your business manage inventory effectively? If not, the experts at Southeast Computer Solutions can help! For more information on implementing best practices to improve your inventory management processes, contact us here or call (305) 556-4697.

About Southeast Computer Solutions

Southeast Computer Solutions is based in Miami, Florida, and has additional operations in Mexico. For over 30 years, we have positively impacted the success of small and mid-sized businesses with effective business management implementations that improve our clients’ operations. We listen, we are accessible, and we care. Learn more by visiting our website or calling 305-556-4697.

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