Overcome the Difficulties of Cycle Counting Areas with High Volumes of Production with no Down Time

Posted by Gerry Poe



The Materials Supply Problem:Inventory-Cycle-Count

  • Material management fails to solve daily demand and order fulfillment requirements.
  • The company is unable to give customers a delivery date promise
  • Suppliers are unable to deliver goods on time and in needed quantities
  • Forecasts are inaccurate and unreliable
  • Operations cannot assess material needs and identify bottlenecks
  • Procurement based on previous years and forecasts from spreadsheets
  • Real-time data is unavailable or does not represent the real world.

Best Practices:

Inventory cycle counting, stock-take, inventory counting processes, policies, and procedures, traditionally cause much pain and are costly. Whether you are a manufacturer, distributor, retailer, eCommerce, construction or plumbing company your inventory levels can make or break your day.

In the world of "counting tools" at Santa Clarita Consultants, there are advanced methods and software to assist. Advanced cycle count systems provide us with fast and accurate ways to verify and schedule inventory quantity verification. As an example, the ability to assign stock codes into control group ensures us that our high volume inventory is accurate, enabling reliability to meet customer needs.

High volume, sales, warehouse transfers, job issues, PO receipts, and Inventory cycle counting: How do these factors affect your business daily operations?

  • Transaction timing and relevance to material needs assessments
  • Sales order commitment delays for order promise dates
  • Job processing and material issues
  • Purchasing, forecasts and demands
  • Shipping, packaging, and delivery
  • Inventory Cycle count criterion and business interruptions

Cycle counting is a daily business grind and not usually anyone’s cup of tea. Cycle counting can cause under/overruns, shortages, job stoppage, shipping delays, cash depletion and revenue delays, cashflow and budgeting conflicts.

In short, chaos can result from an inability to handle material counts effectively and efficiently without stopping the business or doing overtime on a long weekend to complete a “full count.” Partial counts, called cycle-counts, refer to a structured schedule of rolling through the entire warehouse in a single month. Dedicating time each day to count a row, aisle, set of bins, stock codes, product classes, ABC-classes or other strategic material management process, will help alleviate stock anomalies.

Reasons for item strategies vary from most to least moved, forecasted, dependent and independent demand, valuation, product class, and so on. If you can count materials any way you need to align best to your business model or change it up as required, this creates flexibility, adding valuable tools for material management.

The best ERP software solutions have cycle counting as standard functionality including cycle counting based on some or all of these:

  • Ad-hoc and scheduled, counts are date/time stamped. This then, when posting (confirming) the counts, adjusts for all electronic (virtual) movements occurring between the capture and the confirmation.
  • Ensures the company operations can persist without downtime and the counts represent the before and after count results. (in all cases, of course, materials cannot be physically moved – only electronic transactions are performed (i.e.: virtual movements)
  • Counts based on:
  • Part number ranges or lists
  • Warehouse
  • Product Class
  • bin-code
  • Cycle Count Rules or Codes
  • ABC Class
  • Variations enable complex counting to act as standard methods available to the company need to count parts.
  • Stock Take confirmation, journals, are posted to the General Ledger

Advanced Cycle Count is another option to help facilitate ease of processing using more complex methods such as:

  • Inventory Slotting
  • Provides users with a formalized random selection of stock codes for cycle counts;
  • Assigns count frequency based on ABC Class;
  • Ability to assign troublesome stock codes into more frequently counted Control Groups;
  • Allows similar items are counted together;
  • Flexible Count Frequency Daily, Weekly, Bi-Weekly, Monthly;
  • Maintains a complete history of cycle count results for analysis;
  • Records the date of the last cycle count for each stock code;
  • Records the number of cycle counts for each stock code;
  • Works in conjunction with the standard Stock Take System to add more detailed control and accuracy to the cycle counting process.
  • Added tables are defined to Report Writer and Crystal Reports, allowing users to do custom analysis of Cycle Count History

Industries in which Advanced and Standard Cycle Counting solution applies:

Aerospace, Apparel and Accessories, Automotive - 1st Tier, Automotive - Component and Accessories, Automotive - Specialist Vehicles, Consumer Durables, Defense, Safety and Security, Electronics, Food and Beverage, Furniture and Fittings, Glass, Machinery and Equipment, Medical Devices, Metal - Fabrication, Metal - Foundries, Milling, Packaging, Pharmaceutical, Plastics and Rubber, Printing, Stationery and Labeling, Public Sector - Utilities, Retail, Storage Services and Warehousing, Telecommunications, Textiles, Toys and Recreational Products, Transport Freight and Logistics, Tubes, Piping and Hoses, Wholesale Suppliers and Distributors. 

Summary:

Companies require on-time and reliable delivery of materials and the ability to confidently commit customer available-to-promise deliveries. When a customer orders products they expect the company to deliver on their promises because their downstream customers are expecting order fulfillment.

In a supply chain of order to fulfillment, there are many processes, purchases and manufacturing, shipping and delivery options. The supply chain management systems are a composite of people, computers, hardware and software built to manage the entire business cycle to the consumer.

Technologies are linked to help us plan, budget, forecast and execute against these high stakes of demand fulfillment. Volume purchasing, sales and delivery systems are best when automated helping grow and sustain business profitability.

Your company may require different capabilities than we have presented; those needs can be assessed by scheduling a discussion with one of our materials handling experts.


Schedule a Personal Consultation Here

 

Tags: Inventory Control, Materials Supply, Inventory Cycling

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