Cycle counting: how often to count, and how to do it

Cycle counting versus an annual count

An annual physical count gives you one accurate snapshot, after which the numbers drift again. Cycle counting keeps the records close to reality all year, catches errors while you can still trace them, and doesn't stop the warehouse.

A simple starting schedule

Count your most important items most often. A common starting point is below. Adjust it to your own volume and how costly mistakes are.

• A items (the few that make up most of your picks or value): count monthly.
• B items: count quarterly.
• C items (slow movers): count once or twice a year.

Add counts that are triggered by events

Some of the most useful counts aren't on the schedule. Count a location when:

• it reaches zero, because an empty bin is the easiest and fastest to check
• a picker reports a shortage or finds the wrong item
• receiving had a problem, such as a damaged or mixed pallet
• an item has just been moved or re-slotted

How to count

Count one zone at a time so the work fits into a shift. Where you can, have the counter count blind, without seeing the system quantity, so they don't just confirm it. Reconcile the same day, while people still remember what happened.

Investigate variances, don't just adjust them

When a count doesn't match, find the cause before changing the record: a mis-pick, a put-away in the wrong bin, a unit-of-measure error, a missing receipt. If you only adjust the number, the same error will keep happening.

Track accuracy by location

Measure the share of counted locations that matched. Write down the main cause of each miss. After a few weeks the same two or three causes show up, and fixing those moves accuracy more than counting more often.

Do you need a WMS or scanners?

No. You can run a count program with paper or spreadsheets. Scanners and a WMS make it easier to keep going, because they assign counts, record them and flag variances automatically.