What are the key features and functions of a WMS for cycle counting and physical inventory?

From my perspective, cycle counting is a pivotal strategy in modern inventory management. I believe it's like having a vigilant auditor inside your warehouse, methodically verifying parts of your stock regularly. This approach, from my experience, not only enhances inventory accuracy but also smartly aligns with ongoing business activities, ensuring a harmonious balance between operational efficiency and inventory control.

A well executed cycle counting program enhances operations is a couple of ways. 1.) It improves inventory accuracy and that will improve efficiency and service. 2.) It eliminates the need for disruptive physical inventories. 3.) If it is supported with a strong analytics team cycle count results can be analyzed for continuous improvement projects.

In my experience, No matter how good an organizations replenishment, tracking and management systems are, organizations must do regular checks of actual inventory levels. Maintaining an accurate item count can help reduce required safety stock and lower overhead costs. Because it doesn’t force companies to shut down operations and perform a full physical inventory count at once, cycle counting has become a popular inventory management strategy for companies across all industries. Some key benefits are: 1. Higher order fulfillment rates 2. Better customer service levels 3. More accurate inventory assessments Higher sales 4. More time between physical counts Fewer errors 5. Less inventory write-offs and obsolete inventory

Cycle count is a very useful method in fast-paced and all-time-busy warehouse where activities cannot be stopped for a full physical count. It is very useful to identify and correct discrepancy on time in short duration without waiting till the end of the year where the data/record might have misplaced and it would be impossible to track & remedy the reason of discrepancy. It is also good way to make sure the warehouse staff is well practiced in performing the inventory and all other activities related to it.

End-of-period Inventory often means standstill for all warehouse operations. In most cases, nothing goes in or out of the warehouse for one of the several days and, of course, no internal warehouse movements are performed.

The solution: Cycle-counting for physical inventory. Normally, when taking a physical inventory, you have to count all items in stock in the warehouse by hand at the end-of-period date. Not so with cycle counting. Here it is counted continuously over the entire financial year. Advantage: Deviations from the target stock can be detected more quickly in this way and errors can be corrected immediately.

From my experience, physical inventory is a crucial yet intensive process, essential for maintaining the integrity of a company's financial records. I believe it acts as a comprehensive audit of a business's tangible assets, aligning the physical count with financial reporting. This method, in my view, is indispensable for ensuring compliance with regulatory standards and providing a clear snapshot of a company's inventory health at a specific moment.

I believe physical inventory is a crucial aspect of inventory management which is commonly practiced near the end of fiscal year to validate the book quantity & value with the physical stock. It plays a pivotal role in maintaining the accuracy & integrity of financial records. The multiple purposes it serves are: 1) Reconciliation & rectification of inventory records. 2) Preventing financial inaccuracies & more transparent reporting. 3) Fostering a culture of accuracy & responsibility among staff. 4) Optimize operational efficiency. 5) Helps business to implement more efficient & effective control measures while mitigating the risks. 6) Clearing of obsolete & damaged stock to minimize cost and utilize business recourses in more better way.

A physical inventory or wall to wall count is usually done once a year depending on your financial audit partner and may be determined by outputs from cycle counting. These will more than likely be done when the warehouse is not operating due to the need to verify all stocks in location to satisfy financial audit partners that financial rules and regulations for accuracy of business inventory

Unlike the cycle count that is done for a portion of the warehouse inventory without any disruption to normal operations, Physical count as name suggest is full wall to wall count of available inventory in warehouse and reset the numbers to correct system and physical level. The physical count is much more elaborate and regulatory requirement in some countries. The external auditors, finance, Resource protection and operations are engaged for specific number of days or hours to complete the count and update systems

Physical inventory is the count of inventory lying in the warehouse at specific point of time. The physical inventory audits are done in the end of each fiscal year or when required.

From my point of view, a Warehouse Management System (WMS) is an invaluable tool in modernizing and streamlining inventory management processes. I believe it acts as a digital backbone, supporting both cycle counting and physical inventory tasks. This technology, in my experience, not only enhances accuracy with tools like barcode scanners and RFID tags but also smartly schedules and organizes inventory activities, leading to a significant reduction in errors and an increase in overall efficiency.

Doing Cycle count or Physical count without a WMS is like driving super luxury sedan on desert track. It will be painful and ineffective. WMS as an application is a powerful tool built over the years to suite business and customer needs to run the operations effectively with due focus on the inventory. Inventory is cash in form of a product. Only difference is it is not in locker but in Racks and Shelves. WMS helps to provide and direct the warehouse team for defining and setting Cycle count correctly. It reduces time taken for physical count and bring real time visibility to correct mistakes of count undertaken

The first and foremost advantage is removing the need for physical inventories. These costly practices exist because effective cycle counting without a WMS is extremely rare. If you implement an effective cycle counting program within your WMS by ensuring every location or SKU is counted on a regular basis and perform a sustainable number of counts every working day, your inventory accuracy will exceed 99%. Far higher than the old way of infrequent physical counts. As an added bonus, you'll also have a digital record of all the activity to prove to Auditors that your inventory costs are accurate as well. Something that is often very painful and expensive to do without a WMS.

A WMS can streamline your cycle counting and physical inventory processes by automating data capture and real-time tracking. You'll leverage advanced features like dynamic cycle counting, which prioritizes high-value or fast-moving items, ensuring accuracy without halting operations. Using barcode scanners or RFID, inventory data syncs instantly, reducing discrepancies. The system also optimizes scheduling by integrating with your inventory turnover rates, enabling more frequent counts where it matters most. This strategic approach minimizes disruptions and enhances overall inventory accuracy, directly impacting your bottom line.

WMS plays a vital role in making the cycle count effective by locking the specific bin and ensuring no transaction happens during the process. The WMS also helps in picking, scanning and maintaining the reports for cycle count.

From my experience, effectively tracking KPIs is critical for optimizing cycle counting and physical inventory processes. I believe that focusing on metrics like inventory accuracy, count frequency, and count variance provides a clear insight into the health of inventory management. These KPIs, in my view, serve as vital indicators of operational efficiency, pinpointing areas for improvement and ensuring a robust inventory system that supports informed decision-making and minimizes financial discrepancies.

Inventory accuracy, count frequency, count variance, count adjustment, and count efficiency are some common KPIs for cycle counting.

A process effectiveness is measured by the successful end result expected and overall goal of the business. for an assembly line like automotive, 100% accuracy is must while others may be happy with 99.5%. It varies from industry to industry. In general the KPIs for Cycle count and physical count like 1. Net unit accuracy 2. Absolute unit accuracy 3. RCA measurment 4. Process like Shipping, picking, putaway, receiving accuracy 5. Net dollar accuracy

Two Inventory KPIs that we often use are: #1. Number of inventory inspections per product: For the required type and number of inventory inspections (permanent, end-of-period inventory, etc.) #2. Number of inventory inspections per storage bin: For the required type and number of inventory inspections (permanent, end-of period inventory, etc.) For both only the quantity is taken as a key figure.

In my experience it is beneficial to ensure KPIs drive the correct behaviours in a warehouse My preference in bonded warehouses was to ensure total accuracy of stock due to HMRC considerations. So I used Stock Unit Accuracy (>99.96%) coupled with frequency of counts for bins containing alcohol (every bin containing alcohol every 28 days). This insured that bins were counted accurately and often to ensure compliance to HMRC rules. Some KPIs and Formulas are as below Stock Line Accuracy % =(# of correct lines counted / # of lines counted)* 100 Location Stock Accuracy % = (# of correct locations / # of locations) *100 Stock Unit Accuracy % = (Actual QTY by SKU / expected QTY by SKU)*100

Enhancing cycle counting and physical inventory KPIs hinges on the strategic use of a Warehouse Management System (WMS). I believe that by clearly defining roles, offering comprehensive training on the WMS and counting tools, and setting achievable targets, a company can significantly improve its inventory management. This approach, based on my experience, not only streamlines the counting process but also ensures ongoing analysis and refinement of warehouse operations, leading to more accurate and efficient inventory control.

To improve and reach best inventory holding standards, three elements needs to be considered. 1. WMS for effective system support 2. Warehouse employees defined training 3. Effective Tools and Process adherences. Cycle count and Physical count should be collective responsibility and not of one Inventory coordinator job. A well define count process in WMS, a periodic review of the count results and action based on the RCAs helps in improving KPIs

To improve your cycle counting and physical inventory KPIs one should define the roles and responsibilities of their ground staff involved in the process. Make sure that no inward and outward transaction is happening from the bin wherein your team is performing the cycle count to have high level of inventory accuracy and reduce the inventory errors.

In my experience, it's key to make sure everyone knows their job and to set realistic goals. Training wasn't always enough, which led to mistakes using our inventory system. Checking our progress regularly helps us spot problems early. We started using RFID tags, and although it was tough at first, it really cut down on errors. Keeping everyone accountable and fixing mistakes fast is crucial for keeping our stock numbers right and making the whole process smoother.

Enhancements can be achieved by: Implementing Best Practices: Assigning responsibilities, setting realistic targets, and providing adequate training on WMS use. Regular KPI Review and Analysis: Monitoring performance and taking corrective actions as necessary. Process and Procedure Optimization: Continuously refining warehouse operations to minimize inventory errors.