When it comes to cutting overhead costs and improving operational efficiencies, cycle counting is often the last thing warehouse managers think about. Because of this, the process tends to get forgotten or overlooked as an area for efficiency improvement, even though it continues to suck up time, labor and resources when performed manually.
Meanwhile, outdated manual cycle count procedures continue, taking hours to complete with only subpar accuracy.
But by automating cycle counting (and physical inventories), you can streamline counts, plug hidden spending leaks, and increase your team’s productivity without increasing your overhead costs.
A typical warehouse will conduct a blend of inventory auditing procedures, such as quarterly wall-to-wall physical counts, mini physical inventories, intermittent ABC analysis, daily high-dollar cycle counts, etc. – whatever fits your operation. Many of these methods can be referred to informally as “cycle counting.”
No matter which method(s) you use to count inventory, you have to devote quite a bit of manpower to making sure that the stock levels listed in your system match what’s actually on the shelf. Not cycle counting regularly can create huge problems, delays and even loss of revenue.
Just because you have to cycle count doesn’t mean you have to do it manually. In fact, automating your cycle count process can turn this necessary evil into a cost savings opportunity. The money you save from using a cycle counting mobile app can pay for an entire mobile inventory management solution in just one year.
Manual cycle counting requires dedicated labor, time and floor space. Whether you perform these counts annually, quarterly, monthly – even daily – each time you send your team out to count stock levels, you are taking up resources that could be used more effectively on other tasks.
Meanwhile, the manual process holds your operation back through three areas of inefficiency:
To demonstrate how these points impacts your business, let’s walk through an example of where those cost and productivity leaks occur.
How a manual cycle count might proceed:
In the end, the manual cycle count takes approximately 6 hours (2 seconds per item) at about 80% accuracy.
After all this time and effort, the end result is still less than 100% accurate – even though the point of cycle counting is to improve inventory accuracy.
If you aren't running a straightforward distribution center, inventory management becomes even more challenging. Maybe you have several types of inventory, such as raw material, finished goods, spare parts, equipment and tools (fixed assets). Your inventory management workflows may be far more complex, meaning cycle counting becomes more complicated, and thus takes up more time and budget to complete.
You may have handled physical inventory and cycle counting by hand in the past, but that doesn’t mean it’s the best way to continue cycle counting in the future. Upgrading to automatic cycle counting using mobile devices like barcode scanners or handheld computers can significantly improve count speeds by condensing and simplifying the counting procedure, ultimately freeing up manpower to be re-allocated to more important revenue-generating tasks.
In this example, the worker will be using a mobile device with a cycle counting mobile app instead of a paper checklist:
At the end of the day, this cycle count takes less than 2 hours (or 0.6 seconds per item) at 99.999% accuracy – a time savings of more than 70%.
Automated cycle counting with mobility offers multiple benefits, including:
While the benefits of automating cycle counting are undisputed, you don’t have to end your digital warehouse automation efforts there. Cycle count and physical inventory mobile apps tend to come as part of a larger mobility suite, such as RFgen Mobile Foundations™, a total mobile data collection solution that provides similar efficiency-generating accelerators for other aspects of your supply chain operations as well.
Using barcode software, mobile data collection software, and mobility, warehouses in virtually any industry can benefit from digital automation technology like automated cycle counting.
Your warehouse could be next.
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