Why cycle inventory counting is better than annual counting

Any logistics or a distribution and manufacturing company with a warehousing facility will have to manage inventory and keep the count of goods updated at all times. Several devices can help in effectively keeping a count of the inventory numbers daily. Using the barcode scanner can be of great utility to quickly do inventory counting along with good inventory management software.

There are many inherent difficulties in spending days in inventory counting and checking discrepancies as you need to also constantly interact with your customers. Hence manual counting can be a very monotonous procedure that will not be always feasible. Hence many big brand houses resort to an annual counting procedure that implies allocating a few days or week towards the end of the year to take stock of all inventory.

Though annual counting of inventory does not disrupt the daily functioning it does bring in further serious issues of discrepancies that get accumulated over a year.

What is Cycle Counting?
Before we dive into the benefits of cycle counting it is important to understand what cycle counting is all about. Cycle counting is a popular inventory counting solution that enables businesses to count the number of items in several areas within a warehouse without having to count the entire inventory. This method is more like a sampling technique where taking the count for a certain number of items will infer the count for a whole batch in the warehouse. Hence this essentially means counting a small amount of inventory on a specific day without having to do an entire manual stocktake.

There are various advantages when you implement a cycle counting method and it depends on how large your operations are based on the popularity of your brand.

5 benefits of choosing cycle counting over annual inventory counting:

Limited disruptions in your regular operations:
One of the most important and primary benefits that cycle counting will provide is it limits disruptions caused in your regular operations when performing manual counting. While carrying out annual counting the warehouse or firms needs to be shut down for at least a period till the entire counting process is over. This essentially means shutting down regular operational work which can prove to be quite expensive for the firm.
On the other hand if cycle counting is integrated into your warehouse management then the same can be carried out every week automatically which will mean lesser disruptions and fewer discrepancies in your business.

Cycle counting gives you the ability to access your inventory counts on an ongoing basis that not only helps in minimal disruptions but also a very active ongoing communication among your team members.

Lesser errors due to incorrect inventory accounts:
Cycle counting method is also proving to be useful in identifying errors and fixing issues that might have taken place during operations. Imagine if you come across discrepancies in the inventory and mismatches in numbers. It becomes way easier to identify these errors and correct them rather than wait a year long for your annual counting.

There are more chances of causing a mistake while counting large volumes of stock. As cycle counting involves lesser volumes for counting it reduces chances of possible errors. This will not only help you in maintaining the correct numbers in stock as it is conducted in shorter periods but also in effectively running your business operations. It will give you a clearer picture when to send a purchase order based on the stock numbers.

Better placed to decide on your buying:
This method is carried out on regular intervals and hence one will have a better hold of your inventory subsets. One will be able to have better buying decisions as you have a better understanding of your updated stock numbers thereby making your business more profit oriented. It also helps in creating a more valuable report for your team who are engaged in reordering and restocking the items on time.

A lot of resources and time is saved:
Annual counting which involves manual counting are prone to not only errors but also a lot of wastage of time and resources. Also once an error happens it is a tiresome process to spot the error and correct it. This not only involves disruption of services but also can cost the firm dearly. Hence cycle inventory counting is the best way forward to reduce the wastage of time and resources.

Better customer service:
Customer service is the key for any business to sustain and move forward to become market leaders. But to provide the best customer service one has to be well informed of the products available in stock that will help in faster delivery. Up to date data is the key in helping one to quicken hasslefree deliveries and attract more customers.

Final Thoughts:
Many of these benefits are very convincing to businesses to opt for cycle counting as the best method to be implemented. If you are eager in making products available to your customers then you must maintain your order levels accurately. Cycle counting will not only help you in your inventory counting but also save you plenty of time and resources thereby helping your business grow and develop.

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