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Why Effective Cycle Counting Can Save Your Organization Time and Money

Posted by Cameron Loveall on Dec 18, 2018 1:27:39 PM

To achieve an optimized supply chain, many factors have to come together to reach the inventory “perfect storm” and achieve organizational efficiency. One of the most important factors is inventory accuracy, or the ability to know exactly where inventory is at all times, whether it’s in the warehouse, in the field or at remote locations.

Inventory accuracy empowers organizations to give customers the products they want, when they want it, at the time and location most convenient for them. To achieve inventory accuracy, an effective cycle counting system is crucial to have both an immediate and big-picture view of inventory.

Using an inefficient cycle-counting system runs the risk of creating misplaced inventory and unhappy customers. If your system tells you a piece of inventory is in Aisle 4 Bay 17 Position 1, but it’s really in Aisle 4 Bay 07 Position 1 (or maybe not in the warehouse at all!), you’ve wasted time searching for the product. Delays in locating products cause delays in customers receiving their orders. Issues like this result in customer dissatisfaction—and potentially missed future business opportunities.

To resolve these inventory accuracy challenges, incorporating efficient cycle-count process into your organization is an effective strategy. Not performing cycle counts can be costly for businesses; physical cycle counts often require operations to shut down, which can mean lost revenue. Unenthused workers likely will need to come in on the weekends, risking a time-coming, rushed and inaccurate count.

Many companies implement a regimented cycle-counting program to ensure accurate levels of inventory. Cycle counts can be performed in a number of different ways:

  • ABC code counting: A-type items may be counted every 30 days, B-type items counted every 60 days and C-type items are counted every 90 days.
  • Location counting: locations within a given location range are counted every X number of days.
  • Triggered counts: triggered when a location’s balance falls below a certain threshold to help gain a better inventory accuracy throughout the year rather than one physical inventory count a year.

Investing in an effective cycle-count system does more than eliminate the need to perform physical inventory counts; it can provide an accurate view into inventory at every location across the business, decrease the time from stock to dock and optimize the use of company resources.

If you are looking to improve inventory accuracy in your organization, DSI’s Direct for NetSuite bundle can help. Connect with our team to see what DSI Direct for NetSuite can do for your business. 

Topics: cycle counting, netsuite, inventory mangement, inventory visibility, inventory tracking, warehouse efficiency, warehouse management, inventory accuracy

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