Importance of inventory cycle counting and why is it necessary for warehouses

One of the essential aspects of warehousing is inventory control. The inventory control system is a systematic solution for tracking and keeping accounts of your stocks across the supply chain. Warehousing companies in Chennai offer built-to-suit spaces that enable strategic planning of your inventory.

Inventory cycle counting is a process by which companies measure how much product they have in stock on any given day, week, or month. This information is used to determine how much stock needs to be ordered from suppliers and how much can be expected to be sold. Understanding how your inventory changes over time ensures you are always stocked up on the products your customers are most likely to buy.

What is an Inventory Cycle Count?

It is a sampling technique that indicates whether the digital inventory verifies with the physical stocks. 

For example, you have three large shelves in your warehouse. Every shelf contains a subset of one category of products. Let’s say you want a record of high-demand products, and its subset is X material. For every shelf, you will physically count only this specific categorisation in one cycle count. This helps in minimising time instead of measuring the entire inventory at once and not disrupting the supply chain. 

Benefits of Inventory Cycle Counting 

Inventory cycle counting is a fundamental process in warehousing for the following reasons–

1. Helps to ensure that products are being moved from inventory to the sales floor at the correct rate, which in turn helps to optimise throughput and minimise waste. 

2. Cycle counting can help identify inventory record discrepancies early on, which can save time and money down the line. 

3. Detects any thefts.

4. Reduces contingency costs by minimising errors.

5. Allows frequent tracking of products. 

6. Helps in categorically sorting your products.

Difference Between a Physical Count and Cycle Count

When a business needs to figure out how much inventory it has on hand, it often uses a physical count. This is when a business physically scans all its products and records the number of each that it finds. A cycle count is a more modern method for determining how much inventory a business has. It is based on the principle that if a business can’t find any of its products in stock, it must have sold all of them.

The cycle count method is more accurate than the physical count method because it takes into account how often a product is used. For example, if a product is used once every two weeks, but is kept on the shelves for six months, then the cycle count would register as if the product was used every day. This can result in businesses overstocking their warehouses with products they don’t need.

Different methods of Inventory Cycle Counting

Inventory cycle counting is vital for warehouses because it allows managers to identify and correct problems early. Cycle count methods include:

-Fixed Cycle Count: This method counts the total number of items on hand at regular intervals, such as once a day or every other day. This can help you track inventory levels and prevent overstocking.

-Moving Average Cycle Count: This method uses a moving average to track inventory levels. The average is based on the past specific number of inventory transactions. This can help you avoid peaks and valleys in your inventory, which could indicate overstock or understock.

-ABC method: This method helps to understand which products are critical to the profitability of your business. You can divide your inventory into three categories based on sales volume:

A: Highest order volume

B: Average order volume

C: Lowest order volume

Each category would be counted in different cycles, where A has the highest frequency of counts while C is assessed less often. This helps in keeping up with the demand-supply chain of your business. Warehousing in Chennai often records high daily transactions due to the city’s industrial expansion. These methods help in keeping an accurate track record.

Best practices for Inventory Cycle Counting

Here are some tips for effective inventory cycle counting:

1. Start with an accurate count of current inventory. This will help to ensure that you are moving products at the correct rate.

2. Make sure that you are tracking all changes in inventory levels, including new product arrivals, product deletions, and stock adjustments. 

3. Regularly check your cycle count against sales data to ensure accuracy. If there are any discrepancies, investigate them ASAP.

4. Use cycle counting to monitor your warehouse performance over time and make adjustments as needed. 

Best warehousing solutions for effective inventory cycle counting

The inventory control system is significantly affected by the space. To ensure efficient inventory tracking, your warehouse should be conducive to the procedure. Hiranandani Industrial Parks in Chennai is a prime example of warehouses that have apt storage solutions. With optimum floor plates, one can ensure that the storage shelves are placed strategically. You can also customise these floor plates for scaling your business requirements. 

This warehouse service provider in Chennai ensures that your bare shell space is well-equipped to accommodate a systematic plan for inventory storage. 

Moreover, these warehousing services in Chennai provide Grade A infrastructure that ensures timely management of the supply-delivery cycle, thus helping to maintain precision in your inventory movement. Browse through https://hiranandaniindustrialparks.com/ to get your ideal warehouse for rent in Chennai.