Automated Inventory Cycle Count (AICC): Benefits & Implementation

Is your company repeatedly experiencing wait times with order fulfillment? Do you have disappointed and irritated customers as a result? If so, it may be worth considering software for inventory management. When your business is frequently experiencing discrepancies between your inventory count and your physical product, this is a clear sign that a more robust cycle counting process is needed.

What is Cycle Counting? 

 

The procedure of cycle counting works by replacing detailed and complex yearly inventories with lesser counts carried out on a recurring basis during the year. The procedure happens during regular operational business hours, and as a result, mitigates the necessity for a shutdown.

 

The inventory, procedure intricacy, and quantity will verify if cycle counting is appropriate for your company. However, this is a process that businesses — regardless of size —  can benefit from.

 

Here are 5 ways a cycle counting catalogue system can help your business.

 

1. Can Fill Orders More Efficiently: Cycle counting permits a fraction of the bundles of goods to be calculated several times annually, and stockpile variations within the ordering system are minimized. This results in a smaller number of products being back-ordered. 

 

2. Up to Date and Precise Data to Direct the Company: When the information of inventory is incorrect, extra orders are typically made to supply “wiggle room” to ensure the goods are there to meet the inventory needs.  The additional inventory inflates the carrying costs and will most likely expand the quantity of unneeded stock. 

 

3. Quicker to Notice Shipping Breakdowns: Receiving and Inventory Transactions: Enhanced transparency lowers additional prices from hastened freight obtained to make up for lost time managing incorrect records of inventory. 

 

4. Reduction in Disturbances: With just tiny batches being calculated at one time, this eliminates the necessity to halt the continuation of tabulating inventory. The procedure is unified and blended into the everyday work operations and is done by current employees during the year. 

 

5. Enhanced Capacity to Minimize Mistakes and Burglary: Repeated cycle counting permits inconsistencies to be found and rectified quicker, and this minimizes the effect of mistakes and errors. Moreover, this consistent action of frequent counting helps uncover burglary or theft so that corrective action can be implemented.

Executing Cycle Counting 

 

Cycle counting can be quite cumbersome and complex. But don’t let that deter you as the benefits far outweigh the difficulties. Here are a few pieces of advice to help get the ball rolling.

 

Clarify and Plan Your Work Processes 

 

Ensure that you get your team involved to help obtain a deep comprehension of all the stages that impact inventory. Map out the workflow and record how everything should operate – be as precise as you can — down to the single duty level for every spot within the procedure. Everything from buying, receiving, order processing, shipping, etc.

 

Make sure it is all accounted for. Stages in these operations should also include finishing and confirming paperwork, adding information via automated scanning tactics, and doing necessary examination inspections.

 

Have Your Workers Trained

 

Broadcasting your rationale behind the switch up in inventory procedure is crucial, make sure to communicate this to your staff. Additionally, have your workers trained properly. The right training will educate them on understanding the new operations as well as how a certain workflow process impacts another. And this understanding is critical for efficiency reasons.

 

Furthermore, you may want to think about doing personalized training for your workers. This will typically be specialized training that is more in-depth for newcomers, and then refresher training for your more seasoned employees.

 

Solidify Your Capabilities With Software

 

Software might take a snapshot of inventory at the beginning of a new cycle count, then permit modifications predicated on what’s detected in the physical tabulation. Monitoring, culminating, and bookkeeping for these modifications is critical.

 

Clarify the Cycle and Divide Counting

 

Start cycle counting tiny sections of the inventory every day as you do a final physical inventory. After, contrast the physical counts to the levels displayed in your management system that houses your inventory information.

 

Begin with Control Group Cycle Counting. Pick a control group consisting of a cross-section illustration of inventory. From there, tabulate the control group and contrast it with the data housed within your inventory management system.

 

Revolve these groups in accordance to a fixed regiment to secure all inventory in the storage facility; ensuring that it’s all tabulated at least yearly.

 

Once you’ve executed control group cycle counting, find any origins of inventory inaccuracies and implement the solutions — start with Random Cycle Counting. Take an arbitrary numerical instance of your inventory to examine congruence with inventory precision calculations. And then conclude the exactness in relation to your whole inventory.

 

When these methods are properly entrenched in your operations, you can decide how to cycle the counts based on what suits your operations best. For instance, you could tabulate the ratio of your quickest and best-selling product daily, and count other products less regularly.

 

Set Reasonable Aims for Error Tolerance

 

Based on the demand for your products, your threshold for tolerating error is going to fluctuate. Moreover, you should consider modifying your rates of error to a lower level if you’ve identified operational mistakes in addition to human error, and have rectified them. Consistently find and document inventory discrepancies. For instance; theft, disorganization, counting errors, etc.

 

Strive to Enhance Your Cycle Counting Process

 

Constantly seeking to improve is non-negotiable. A frequent overview of your operations and your staff will allow you to identify sticking points. From there, you can develop plans to correct these deficiencies to improve them over time. But this can only take place with a regular review of your workflow.

 

Attempt to integrate multiple improvements to your processes at a time. Then implement training with the changes incorporated into the sessions, this is a very focused way to ensure your workers are all up to speed with any new modifications.