Why and How to Do Cycle Counting
You can't manage inventory properly if the counts are not correct in your system. Good counts bring better inventory management.
What is Cycle Counting?
Cycle counting means taking a manageable section of your warehouse, daily or weekly, and verifying the quantity of the item(s)—instead of doing one total year-end physical count, possibly making 3-4 passes through the warehouse.
When using the cycle count feature in Epicor Prophet 21, you have the option to count by item, bin and even ABC classes. Counting by either purchase or putaway class, the option becomes available to count specific classes such as A more often than, say, class B. One theory is to count by putaway hits, assuming the items touched the most stand a better chance of being less accurate.
Another good gage is monitoring the service level of miss-ships, and how many times during the shipping process the quantity needed to be edited. There is a company lost sales feature to help you monitor this.
When to Do It
It is always best to count in the early morning, before any pick tickets have been printed and pulled. You always need to verify items removed from the bin before the count, as the bin will be less that amount.
Most times, I recommend blind counts, meaning you don’t list the quantity that should be in the bin. This “forces” a count, demonstrating why it is better to perform the count before any activity.
The other option would be to list the quantity as well as any allocations, and then, the counter could locate the missing quantity that has been pulled, to verify the count.
Types of Counts
I always recommend bins for the best success in counting. This way, when using advance bins in Epicor Prophet 21, the counts will walk through the warehouse in a manageable path. If tracking lots, tags or serial numbers, these will be verified, as well. Keep in mind that during an item adjustment, you can check “add to the next count”; this will help verify these items being adjusted.
Another option is physical count; the physical count feature will allow you to select a range of bins, ABC purchase class, and limit by supplier. With either method, the “physical vs. on hand” report can be used to obtain a list of items to be recounted, whether by quantity or value, but the cycle count accuracy report is only a cycle count feature—not a physical count.
Cycle Counting and Wireless
When using Epicor Prophet 21 Wireless Warehouse Management System (WMS), any bin activity is captured in real time, so there is no need to verify allocations. Once the item has been picked or moved, the count sheet is updated, maintaining accurate bin counts. With WMS, there is also no need to count early in the morning, since the counting process can happen any time during the day.
Posted by Neil VanWalbeck, Senior Professional Services Consultant at Epicor Software