Listaso Blog

The Basics of Cycle Counting

Cycle counting is a proactive inventory management approach that involves counting a small portion of the inventory regularly. Check out this blog to learn the basics of cycle counting.

Carmen Canas vicepresident and cofunder of Listaso
Jairo González
B2B Specialist

Cycle counting is a crucial process for companies looking to improve their inventory management practices. The process involves regularly counting a portion of the inventory in a warehouse, distribution center, or store, instead of conducting a full inventory count all at once. This way, cycle counting helps companies maintain an accurate inventory count, identify discrepancies, and take corrective action promptly.

In this blog, we will discuss the basics of cycle counting, the benefits it offers, and the steps you can take to implement it successfully in your business.

What is cycle counting?

Cycle counting is a proactive inventory management approach that involves counting a small portion of the inventory regularly. This method allows companies to verify the accuracy of their inventory count, identify any discrepancies or issues, and take corrective action promptly. It is an efficient and cost-effective way to maintain inventory accuracy, reduce the risk of loss or theft, and improve warehouse efficiency.

How does cycle counting work?

In a typical cycle counting process, the inventory is divided into categories or groups. A certain number of items are selected from each group, either randomly or based on a predetermined schedule. Once the items are selected, they are counted, and the results are compared to the expected inventory count. If any discrepancies are identified, corrective action is taken to address the issue.

What are the benefits of cycle counting?

Cost-effective: Conducting a full inventory count can be a time-consuming and expensive process. On the other hand, cycle counting is a more cost-effective approach that requires less labor and time. It enables businesses to maintain inventory accuracy and make timely adjustments without incurring high costs.

Improved efficiency: By identifying and addressing inventory discrepancies early, cycle counting can help improve the overall efficiency of warehouse operations. It can lead to faster order fulfillment times, reduce stockouts, and improve customer satisfaction.

Better inventory accuracy: One of the significant benefits of cycle counting is that it helps maintain an accurate inventory count. By counting inventory regularly, businesses can identify discrepancies, take corrective action promptly, and prevent any issues from becoming more significant problems.

Better data: By regularly counting inventory, businesses can gather more accurate data on inventory levels, demand, and trends. This data can be used to make better business decisions, optimize inventory management, and ensure that the business is meeting customer demand.

Compliance: For companies in regulated industries, cycle counting can help ensure compliance with regulatory requirements.

How to implement cycle counting?

To implement cycle counting successfully, businesses need to follow the following steps:

Divide inventory into categories: Divide the inventory into categories based on factors such as product type, location, or value. This will enable businesses to focus on specific items and ensure that every item is counted regularly.

Determine the frequency of cycle counts: Depending on the size of the inventory, businesses may choose to perform cycle counts daily, weekly, or monthly. The frequency of cycle counts should be determined based on the business's needs, the size of the inventory, and the availability of resources.

Establish counting procedures: Develop procedures for counting inventory, including how to select items for counting, how to count them, and how to record the results. It is essential to standardize the counting procedures to ensure that every item is counted consistently and accurately.

Analyze results: Analyze the results of each cycle count and identify any discrepancies or issues. Take corrective action as necessary to address any problems.

Cycle counting is a valuable tool for businesses looking to improve their inventory management processes. By following the steps outlined in this blog, you can implement a cycle counting program in your business and start reaping the benefits of more accurate and efficient inventory management. Listaso’s Cycle Count Module can help companies maintain accurate inventory counts, improve efficiency, and reduce the risk of errors and loss. So don't wait any longer and Schedule a Free Demo now!

See Listaso in Action
Product Tour
A complete solution for your Sales Reps!
Schedule a DEMOWarehouse Worker 2 Listaso
Learn more about Inventory!

Subscribe to our Blog!

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.