Supply Chain

Cycle Counting Beats Physical Inventory Count, Hands Down

May 4, 2012

For those of you who still shut down your facility once or twice a year to review inventory, I have to ask why. With cycle counting, there is no need for such disruption.

The best way to ensure inventory accuracy is to continually count your products part of your inventory every day and each item several times per year.

It's no big secret that cycle counting programs are critical for any company that seeks greater efficiency in the supply chain. And even though it may not deliver perfect accuracy, cycle counting does offer a long list of benefits such as reduced operating costs, higher service levels, improved shipping accuracy, and lower inventory levels.

Some other interesting findings from a recent survey-based report on this topic include:

Top-performing companies are capable of inventory accuracy greater than 99%, while the average company can achieve 98%.

Nearly half of companies still use a combination of cycle counting and physical inventory.

Cycle count frequency rises as the priority of parts increases.

Scheduling cycle counts is generally the job of an inventory control specialist or inventory control manager.

So what cycle counting initiatives has your company undertaken, if any? Do you need better ways to help you move to cycle counting?

Jim
Tompkins Inc.

About the Author

Jim Tompkins | CEO

Dr. James A. Tompkins is an international authority on leadership, logistics, material handling, outsourcing, and supply chain best practices. As the founder and CEO of Tompkins International, he provides leadership for Tompkins globally.

His 30-plus years as CEO of a consulting / integration firm and his focus on helping companies achieve profitable growth give him an insider’s view into what makes great companies even better. Listen to an interview of Jim Tompkins on the Business Leader Radio show.

As a high-level business advisor, his unique perspective prepares corporations and executives for the future.

To share his knowledge and provide up-to-date information on supply chain and business trends, he developed the GoGoGo! Blogand Global Supply Chain Podcast.

He has written or contributed to more than 30 books and eBooks, including Caught Between the Tiger and the Dragon, Bold Leadership, Logistics and Manufacturing Outsourcing, The Supply Chain Handbook, andNo Boundaries. Jim has been quoted in hundreds of business and industry magazines such as The Journal of Commerce, Supply & Demand Chain Executive, and FORTUNE, and he has spoken at more than 4,000 international engagements.

Jim has served as President of the Institute of Industrial Engineers, the Materials Management Society, and the College-Industry Council on Material Handling Education, and Purdue has named him a Distinguished Engineering Alum. He has also received more than 50 awards for his service to his profession.