Inventory is often the largest consumer of capital for an enterprise.
In order for a business to operate effectively and efficiently, maintaining accurate inventory balances—whether dollar or item based—is imperative. There’s no doubt that poor inventory accuracy may result in poor customer service.
There are many reasons why inventory levels may be inaccurate. By establishing a cycle count program, high inventory accuracy can be achieved and sustained through root cause analysis.
In addition, a cycle count program can spread out the work load as compared to a traditional wall-to-wall physical inventory count once a year.
The basics of cycle counting are simple in theory; establish a methodology, perform periodic counts, reconcile and investigate the discrepancies. However, in practice this process can be much more difficult to manage due to the complexities of your business, the volume of inventory, cycle counting methodology or methodologies, etc.Continue Reading