Cycle count

What is cycle count?

Cycle count is an inventory auditing method where a small subset of inventory is counted on a rotating schedule throughout the year, rather than conducting a single annual count. This systematic approach helps maintain accurate inventory records while minimizing operational disruptions.

Cycle counting components

Effective programs include:

• Counting schedules
• Item classification
• Count procedures
• Accuracy metrics

Counting methodologies

Count prioritization

Organizations typically prioritize items based on value, movement frequency, or criticality. This ABC analysis ensures high-value and fast-moving items receive more frequent verification.

Accuracy verification

The counting process identifies discrepancies between physical counts and system records, enabling quick investigation and correction of inventory variances.

Implementation considerations

Organizations must establish clear procedures for:

Program management

Success requires:
• Regular schedules
• Clear procedures
• Error investigation
• Performance tracking

Cycle count best practices

Organizations should maintain:

• Consistent procedures
• Trained counters
• Documentation standards
• Root cause analysis

Cycle counting serves as a crucial inventory management tool, enabling organizations to maintain accurate stock records while minimizing the disruption of full physical inventories.