What is Cycle Count?
Cycle counting falls under the category of continual inventory management. With a cycle count, only a small fraction of the entire inventory is tallied at once to generate data for the full stock. It is a procedure of balancing and verifying that the physical counts match the inventory data, which is how e-commerce logistics do it.
Significance of Cycle Count in E-commerce Logistics
E-commerce logistics that use cycle counting do not have to stop their operations to undertake physical counting. In addition, since cycle count needs less work, businesses can focus on sales.
- Enhanced customer service: Customers will have precise information on product availability because cycle count offers precise records. Customers receive good service as a result of this.
- Minimal errors: Cycle counting shortens the intervals between counts, giving you adequate time to correct any mistakes that may have occurred.
- Increase in sales: Happy customers and positive feedback help to increase sales.
Prerequisites of Cycle Count and How It Works
Cycle count is performed by an individual who counts an inventory segment at a predetermined frequency, ensuring that each item is counted at least once within an accounting cycle. Cycle count requires –
- Dedicated team: For correct accounting, cycle counting needs a committed team with expertise.
- Suitable method: There are several methods for counting stacked supplies in e-commerce warehouses. You must choose the most suitable method.
- Stock list: It is required to keep a complete list of the selected stocks for cycle counting.
Use Case with Cycle Count
By physical counts, staff counts the stock once a year or in the last days of the financial year. Contrarily, cycle counting accounts for shorter, pre-selected portions of inventory several times a year.
For example, if you want to count 10,000 items per year, you need to count 830 items per month, 210 items per week, and 30 items per day, assuming you count each item just once a year.