Cycle Counting – What is it and what are the benefits?

Physical inventories at the end of the year is a painful and exhausting process which disrupts daily operations.  Counts performed annually often result in a buildup of errors not discovered until the end of the year resulting in significant adjustments.  100% physical counts require a significant amount of work that needs to be completed within a small window of time and usually involves bringing in temporary staff not familiar with the policies and procedures of the  operation.  


Lansdale Warehouse has adopted daily cycle counting as an effective way to improve our operation and inventory accuracy.  We’ve assigned dedicated and trained employees on the cycle counting process.  We believe in continually validating the accuracy of inventory in our WMS system by regularly counting portions of our customer’s inventory on a daily or weekly basis depending on the activity of the customer.  We have made cycle counting part of our daily routine, we count and count and count inventory.  


What is cycle counting?

Cycle counting is the process of continually validating inventory accuracy by counting portions of inventory daily or weekly insuring that each item in inventory is counted within a set timeframe.  

Benefits of continuous cycle counting:

Better customer service.  Our customers depend on Lansdale Warehouse to make certain that inventory levels are accurate.  Nothing erodes customer relationships quicker than customers who do not trust the inventory in our system.  

Additional level of operation efficiency.  Continuous counting has improved organization within our facilities

Increases inventory accuracy preventing adjustments and gives opportunities to diagnose discrepancies when they occur.  Whether it be human error or finding additional training is needed.  

How we count

Traditional physical inventories assume that all items in stock are equal in value and importance.  Traditional physical inventories do not take into account inventory turns.  Lansdale Warehouse utilizes “ABC” grouping where items with a higher turnover are counted more frequently.  Each company is different and counting is tailored to each customer’s specific situation.

General rule of ABC grouping:

Group A comprises of top 70% of turns

Group B comprises of next 15% of turns

Group C comprises of bottom 15% of turns

Cycle count teams makes counting part of their daily routine using barcode scanners that feed counts directly into WMS systems.  Managers review results of cycle counts and find route cause of significant adjustments recorded.  Inventory errors are tracked down and corrective action is taken to ensure mistakes do not happen in the future.

Why we care about cycle counting
Lansdale Warehouse is committed to 100% customer confidence in inventory accuracy.  Cycle counting increases our ability to meet our goals in maintaining customer satisfaction.