One of the reasons you conduct Cycle Count is to check the accuracy of the inventory records versus the actual inventory.
Variances could mean wrong issuance i.e. the customer order was for a potato chip cheese flavor but what was issued and eventually delivered was barbecue flavor. This results in Lost Sales as the customer would reject the Barbecue flavor as Cheese flavor sells more.
An even more significant reason for conducting cycle counts as it could hide pilferages in the warehouse.
But sometimes, the cycle count is not done in a proper fashion as in the following:
1. It is better to conduct cycle counts in a surprise or unannounced manner to preclude any cover-up of shortages;
2. A Cycle count team should be composed of one Accounting (or non-warehouse personnel) and one warehouse personnel and both should count independent of the other to preclude one copying the results of the other.
Both Cycle count members can count different portions of the warehouse simultaneously;
3. All SKUs must be subject to a cycle count preferably on a monthly basis. Hence, the Cycle count team is a permanent one i.e after the finish counting the last SKU, they then start counting the first SKU.
This method I gathered from the Logistics manager of a Philippine Supermarket chain wherein all 35,000 SKUs in their Distribution Center is counted continuously.
4. After the Cycle count has been done, determination of the variances and disposition of said variances must be done immediately to avoid any cover-up of shortages and to correct the computer records so that no errors in invoicing will occur.
By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with. If you are interested, just click the Sulit Logo below:
Variances could mean wrong issuance i.e. the customer order was for a potato chip cheese flavor but what was issued and eventually delivered was barbecue flavor. This results in Lost Sales as the customer would reject the Barbecue flavor as Cheese flavor sells more.
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| courtesy of system-ideas.com |
But sometimes, the cycle count is not done in a proper fashion as in the following:
1. It is better to conduct cycle counts in a surprise or unannounced manner to preclude any cover-up of shortages;
2. A Cycle count team should be composed of one Accounting (or non-warehouse personnel) and one warehouse personnel and both should count independent of the other to preclude one copying the results of the other.
Both Cycle count members can count different portions of the warehouse simultaneously;
3. All SKUs must be subject to a cycle count preferably on a monthly basis. Hence, the Cycle count team is a permanent one i.e after the finish counting the last SKU, they then start counting the first SKU.
This method I gathered from the Logistics manager of a Philippine Supermarket chain wherein all 35,000 SKUs in their Distribution Center is counted continuously.
4. After the Cycle count has been done, determination of the variances and disposition of said variances must be done immediately to avoid any cover-up of shortages and to correct the computer records so that no errors in invoicing will occur.
By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with. If you are interested, just click the Sulit Logo below:
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