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What is Cycle Counting and why is it beneficial for retail store management


What is Cycle Counting and why is it beneficial for retail store management
Aparajita Basu Roy
January 28, 2021


Cycle Counting - The Boon To Check Your Inventory Mismatches

The stock is just vanishing ……..the store manager is clueless………….the profits are disappearing down the drain! But what was there in the stocks in the first place? The answer to this million dollar question is Cycle Counting!

What is cycle counting?

Cycle counting is the method of counting commodities in segments on an incessant rotation to ensure that you can maintain the optimum stock levels without having to suspend daily store functioning. The cycle counting method requires that you count just parts of your total inventory in a day wise or week wise manner so you don’t need to go through your full item list at all.

But notwithstanding your choice of cycle counting process, the key is to stay methodical and coordinated. Find the right method for you, write it down, mark the dates on your calendar, then administer it (and make rectifications if needed).

The next step is to arrange your tangible space. A system might work in theory but may be completely routed on a practical level, if your material was not arranged properly. Carefully organize your stuff so that you and your staff can clearly see the items and count them. Putting them in the correct designated places with legible labels would go a long way in ensuring that.

All outstanding inventory transactions need to be resolved and invoiced to customers and incoming purchases and returns need to be recorded in the system and physically put in proper places, before any counting can start.

Begin physical counting of your products once you are sure that both the actual items and their digital records are in order. The goal is to remain focused, recheck the numbers and hold on to your method. It may be wise to have two independent counting for the same set of products, to make a comparative study and ensure reliability.

Automating the cycle count by scanning the barcode of the item directly into the system ensures greater accuracy for the numbers. Not only is it much faster but it reduces the chances of human error. Using a software like Ginesys allows you to get real-time inventory data and metrics. You always have the correct numbers at hand at any given time.

Reviewing your numbers and deciding on your next course of action is what comes next. If there are huge differences in your physical numbers and digital records, it might need some more investigation of the causes of the mismatched numbers. Is it just about better organization or are you a victim of pilferage? The answer lies in being regular and methodical regarding cycle count.

If your staff knows you’re always keeping an eye on the product count, they’ll possibly be more spiffy in their admin work, with better overall organization and keeping things in proper places. They would also be discouraged from lifting products without your knowledge.

But just like any good habit, cycle counting is about repetitive regularity. If we had to leave you with one more thought, it’s this: the key to cycle counting success is to make it a habit. The benefits like stock accuracy, pilferage prevention and showroom or warehouse efficiency can only be achieved by going through the cycle counting process regularly.

Just to make it clearer - 

• More accurate inventory quantities;

• Reduced losses due to inventory shrinkage;

• Savings in personnel costs and plant downtime;

• More reliable financial reporting and conversion-cycle key performance indicators (KPIs); and

• More accurate decisions regarding out-of-stock inventory, reorder points, and excess uncleared stock.