Inventory Cycle Counting
Premise:
Inventory counted on cyclical schedule with predictable results.
(Count on regular and preplanned defined basis)
The most effective method is counting a certain number of items daily
w/prescribed frequency for each item
Step 1
1. Pick 100 representative parts
2. Divide into 25 per day – Monday thru Thursday (Friday for clean up)
3. Begin with accurate count
4. Note and investigate variances each day
5. Keep track of daily accuracy percentage (spreadsheet)
6. Checklist for Cycle Counter to lead through each possible root cause
7. After finding root cause, correct inventory record (spreadsheet)
8. Record of Cause, who will fix and when
9. Keep checking until you’ve attained 100% accuracy for two or three weeks
(Predictable results)
If time available, also check negative on-hand items
Results Step 1
You have begun to establish the discipline necessary to maintain an accurate
inventory
You have identified and corrected most of the errors that are causing inaccurate
inventories
Step 2
1. Expand to a larger number of items (600 to 700?)
2. Use ABC categories
–A – count bimonthly
–B – count monthly
–C – count quarterly
3. Keep inventory accuracy and Cause records (spreadsheets)
4. Example formula for counts
–Counting 4 days/week
–A’s – every 2 weeks (once every 8 days)
100 A items = 100/8 = 13 items/day
–B’s – monthly (once every 16 days)
200 B items = 200/16 = 13 items/day
–C’s – quarterly (once every 52 days)
400 C Items = 400/52 = 8 items day
All 600 items can be divided into 34 items/day
In a quarter, all A items will have been counted 6 times, B items 3 times, C
items once.
5. Continue until you’ve attained 100% accuracy for two or three weeks
(Predictable results)
Step 3
Once the root causes are identified and are being dealt with for the items in
the Expanded Test, and the Cycle Counting procedures have been reviewed and are
in place, the Cycle Counting program should be expanded to include all of the
inventory items.
You can achieve 97%+ accuracy
If accuracy level maintained long enough – you may be able to eliminate
periodic physical inventory counts
Questions or inexpensive help with your problems call Chad at 727-862-1189