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The Basics of Cycle Counting In Warehouses

The Basics of Cycle Counting In Warehouses

Counting In Warehouses

Everyone in the logistics industry knows that inventory management is an arduous task. With rising e-commerce and consumer expectations, it has become more so. It’s no longer enough to have a well-oiled distribution network. In order to clear large volumes of order within one to three days’ time, it is important to have a robust inventory management process in place, cutting across multiple locations.

Evidently, then, there is no denying the importance of inventory management in achieving customer satisfaction and therefore, success in overall business operations. There are a number of inventory management processes. Comprehensive, physical counts give an overview of your warehouse’s inventory with great accuracy, but they are time-taking, disruptive and therefore, not feasible for businesses in the long run.

Annual inventory has been also found to be cost-inefficient as it requires business to stop all other activities and engage the entire staff in counting. This causes losses in productivity and drop in customer satisfaction because the entire organisation’s priority is now shifted to inventory counting. This kind of approach also brings in inefficiencies and inaccuracies as the staff may not have the same skill or patience required in counting inventory.

In this regard, cycle counting is a favoured inventory management procedure. Let us look at the basics of cycle counting to understand how it makes for a reliable inventory management procedure.

Always On

Cycle counting is done by counting small portions of the warehouse’s full inventory in short durations. It breaks down the inventory into manageable sizes that can be covered on daily, weekly and monthly basis. This helps to keep a close tab on the status of the inventory control processes around the year.

To get the best out of cycle counting, it is important to do the counting accurately and efficiently. Usually, there is a specialised staff exclusively assigned for this task. It is true that availability of such skilled labour who can deliver consistent results in inventory management day after day depends a lot on location of the warehouse. So for instance, it would be easier to get the required staff for a warehouse in Mumbai.

Prevents Avoidable Losses

The biggest problem with annual inventories is the large gap in data that happens from one year to the next. This often results in discrepancies and sizeable losses. This unexpected loss is easily avoidable with cycle counting.

Cycle counting prevents losses due to out-of-stock situations that happen because of inaccuracies in the inventory. With this, you can always ensure that you have the required stock in hand to keep your customers happy and protect your bottom line.

Allows for Targeted Assessments

With cycle counting, it is possible to break the items into groups according to their value and priority in overall operations. In this way, it becomes possible to count the most precious items more often in the cycle than lesser valued items. When this happens, you have more consistent data and less shrinkage because there is no room for discrepancies to pile up and get out of hand over time.


All inventory management processes must be implemented with the long-term vision for the business in mind. You can start by booking a warehouse for rent and eventually owning one if your business allows. But what about inventory management?

You will realise that annual physical inventories prove unwieldy as soon as your business starts expanding. Annual counting requires you to pause operations or hire extra staff to get the count done. This is unprofitable for the business in more ways than one.

By breaking your inventory counting into smaller, manageable cycles, you will be able to expand the volume of your inventory management in line with the evolving bandwidth of your business operations without causing any breakdown or disruption.

It is possible to scale up and optimise the cycle counting process further by engaging new warehouse technologies such as bar code scanners, RFID and drones.

With this in perspective, it is clear why so many companies are choosing cycle counting today in their respective inventory management. Cycle counting gives you more accurate and consistent results, reduces disruptions and losses, and is able to adapt itself with the changing size of your business. This is exactly what all businesses need, when it comes to inventory management.

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