Cycle counting

Cycle counting

1) Cycle counting is the physical counting of stock on a perpetual basis, rather than counting stock periodically. A cycle is the time required to count all items in the inventory at least once. The frequency of cycle counting can be varied to focus management attention on the more valuable or important items or to match work processes. Some of the systems used are:

- ABC system with the highest count frequency for items with the highest annual usage value.

- Reorder system when stocks are counted at the time of order.

- Receiver system with counting when goods are received.

- Zero balance system to count items when a backorder situation is reached to confirm that no stock is held.

- Transaction system where stocks are counted after a specified number of transactions. (Source: ILT Supply-Chain Inventory Management SIG)

Source: David Lowe. The Dictionary of Transport and Logistics. Kogan Page, 2002. – P.57 (288 p.)