Inventory Control

What is a cycle count in the supply chain?

A man in a neon vest takes inventory using a barcode scanner.

Cycle counting is a key method of inventory control. By implementing cycle counting, businesses can easily count given subsets of inventory without having to count everything. Then, over time, the businesses can slowly but surely count all inventory. Or, quite popularly in supply chain management, the cycle count itself serves as a sampling technique. By counting some inventory regularly, warehouse managers can make assumptions about all the inventory in the warehouse.

During an inventory cycle count, employees count a specific amount of inventory on a given, recurrent day. Cycle counting is quite important in supply chain management. After all, massive warehouses may never have the resources to count everything on their many, many shelves. In this short article, we’ll review the basics of cycle counts and how they improve supply chain and inventory management. 

What is a cycle count in the supply chain?

A cycle count in the supply chain provides an opportunity for inventory managers to audit inventory levels for a certain subset of stock, ensuring that quantity is as expected. If inventory levels are higher or lower than expected, a recount is often in order. If that recount still reveals a discrepancy, inventory shrinkage may be to blame.

These are two main assumptions businesses can make when their inventory cycle counts are not as expected:

  1. If a control group cycle count is inaccurate, then the rest of your warehouse’s inventory is likely to be inaccurate.
  2. The error you found in your control group cycle count is likely to pop up for other subsets of inventory in the warehouse, too. 

By the way, a supply chain is the network that connects a company to its producers, suppliers, and customers. Some supply chains are quite complex, while others are rather simpler. Supply chains help companies reduce costs, ship items more quickly, and access more inventory without keeping every last item in-stock. 

Related: How to perform an inventory cycle count

How should I handle errors in my cycle counting? 

If your cycle counts reveal inaccuracies in your inventory, you can either assume those inaccuracies occur across all your inventory, or you can audit your entire inventory to make sure. 

Another option: random sample cycle counting, in which your warehouse counts items completely at random, but gets to everything over a given period of time. This way, you can keep maintaining accurate inventory without losing too much productivity.

Another option: applying ABC analysis to your inventory counts. By counting only the most valuable, profitable items in your inventory, you can assert tighter control over your most important stock. 

Related: How do you categorize inventory items? 

How an inventory app helps with cycle counts 

Inventory is used on smartphones, a desktop computer and a tablet.

Using modern, intuitive inventory software saves your business time, money and stress, no matter what you sell or what you’re counting. In fact, the more complex your supply chain, the more your business can benefit from an end-to-end inventory management solution.

Plus, state-of-the-art inventory apps that work on your phone, tablet or computer are way less expensive than traditional inventory software, but just as powerful. Sortly, for example, offers key automation features like QR code and barcode scanning, which are great for tedious inventory cycle counts. Plus, item histories, low stock alerts and custom reports make keeping track of everything a breeze.  

Ready to give Sortly a try? You can test out all of Sortly’s premium features, completely free, for 14 days! Try it now