If your company operates with the help of a warehouse management system (which most of today’s larger supply chain organisations do), getting a return on investment requires using it to its full potential.
One way in which WMS can help pay for itself is by facilitating a cycle counting program to maintain a perpetually accurate picture of stock held in your warehouses.
What is a Cycle Counting Program?
There are essentially two ways you can keep tabs on how much inventory your company is holding and make sure any discrepancies are recorded and investigated.
One way is to perform a wall-to-wall count of all your stock. This form of physical count is normally an annual event, requiring a great deal of preparation and a shutdown of the supply chain over a weekend to physically perform the count.
The second way, which is easiest to perform if you have WMS in place, is to run an ongoing cycle counting program. Cycle counting involves counting small groups of products or materials on a daily basis. Each day will see a different product range being counted.
The process is perpetual, so all your products are counted a number of times throughout the course of a year, obviating the need for an annual wall-to-wall inventory count.
The Benefits of a WMS-driven Cycle Counting Program
A well-implemented program of cycle counting offers a number of important benefits for any logistics operation. For one thing, it enables inventory level accuracy to be maintained, which in itself spins off a number of improvement opportunities.
In order to implement an effective cycle counting program, you really need a WMS or similar system in place that can perpetually monitor inventory as it flows in and out of your business. WMS also allows you to set up count groups and schedule what is to be counted each day, week, or month.
The key benefits of a cycle counting program using WMS are as follows:
- Inventory discrepancies are discovered in a timely manner; root causes are more easily identified
- Labor-intensive, wall-to-wall inventory counts no longer required
- Enables monitoring and measurement of inventory accuracy via KPIs
- Enables accountability to be apportioned to employees for inventory accuracy
- Facilitates reduction of inventory levels by reducing the need for safety stock
- Supports DC efficiency improvement
Count on WMS for Warehouse Improvements
A cycle count program is just one way in which WMS can support and aid your company in making operational improvements. You can learn a lot more about warehouse management systems and the benefits they bring to supply chain organisations in Eclass numbers 10; 11, 59 and 84, accessible to members of The Supply Chain Leaders Academy.
If you haven’t yet joined our academy, why not browse our website to learn about the advantages of membership? If you have questions which you don’t find answered on the website, please make contact with us via our online enquiry form.