July 2013
Advice and Assistance for Manufacturers
Cycle counting is much better than periodic (annual) physical inventory for so many reasons, not the least of which is that the people doing the counting are, presumably, inventory specialists – they know what they’re doing and inventory accuracy is a big part of their responsibilities. It’s why they come to work every day.
That said, there’s still a concern that cycle counters, like anyone else, can get complacent. The job can get to be rather routine and results may suffer.
In the early days of cycle counting, it can be pretty exciting. Starting with the control group, each count is likely to reveal errors that are, of course, rechecked and corrected, but then the fun begins. The responsible individual plays the role of CSI investigator, searching through a history of activity for the items in question, seeking to identify what happened and why the records were not updated correctly to reflect the new balance. It can be challenging, interesting, and, yes, fun.
After the big problems with the reporting procedures are ironed out, and the regular cycle counting program begins (using real cycles rather than the control group), there will still be lots of opportunities to research and investigate errors and develop improved processes and procedures to avoid their recurrence.
Eventually, things will settle down. The reporting system will be operating smoothly, errors will be rare, inventory accuracy will gradually rise into the high 90% range, and the program will be declared an unqualified success.
Now it all becomes routine.
It’s easy to see how the dedicated inventory accuracy specialist (cycle counter) can lose his or her edge; counting every day and finding few errors, knowing just where to look when errors are found, just coasting along day-to-day.
When this occurs, however, inventory accuracy will start to deteriorate and the job may become more challenging again – if anybody notices. Senior management must be vigilant to assure that this unfortunate scenario doesn’t come to pass. Challenge the inventory specialist from time to time. Mix it up a bit. Assign them to find better ways to manage floor stock. Get them involved in bill of material accuracy audits and improvements. Have them work on warehouse productivity improvements – location assignment and put-away procedures, location labeling and scanning improvements, etc. Get them involved in safety stock policies and management.
Keep their focus on inventory but use their intimate knowledge of inventory, its location and handling to spearhead improvement projects that will both keep their interest and involvement high and generate benefits for the company and the ‘customers’ of the inventory and warehouse (shipping / fulfillment, production).