Cycle Counting vs. the Annual Shutdown Count
Why the annual wall-to-wall count is the most expensive way to be wrong once a year, and how a velocity-weighted cycle count program keeps accuracy high without stopping the building.
What you'll learn
- The true cost of the annual shutdown count
- How velocity-weighted cycle counting works
- Designing count frequency by ABC class
- Using count results to fix processes, not just numbers
An annual count tells you how wrong you were. A cycle count program stops you from getting wrong in the first place.
What's inside
The annual count is a ritual: shut the building, count everything, book a big adjustment, and start the new year accurate for about six weeks. Then the same processes that created last year's errors create this year's.
Cycle counting inverts the model. Count a little every day, weighted toward the items that matter, and use every miscount as a clue about process.
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What the annual count really costs
Lost shipping days during the count and the recount
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How cycle counting works
A small set of SKUs is counted each day during normal operations. Items are selected by velocity and value: A items several times a year, B items a few times, C items annually. Discrepancies are investigated while the trail is fresh.
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Designing the program
Classify SKUs by annual dollar throughput, not unit count
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The systems prerequisite
Cycle counting needs real-time transactions. If receipts and picks post in batches at day end, counts race against paperwork, and every count during the lag looks wrong even when the shelf is right.
Keep exploring Distribution & Wholesale.
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