ParityFactory food processing and food manufacturing customers often ask how they should handle cycle counts for their finished goods.
There are many options, and we see teams approach cycle counts differently across the industry. While ParityFactory’s WMS & MES are built to handle any approach to cycle counts, we do have some recommendations based on our experience.
Our overarching belief is that most organizations doing manual inventory are not cycle counting with sufficient frequency. The reason, of course, is that it’s costly and effort intensive. Even those that do cycle account still have huge inventory variance, because it’s such an error-prone process and the data is not saved/stored in any easy way to review or analyze.
By using ParityFactory, you can stop tracking inventory manually, and our cycle count features will get your inventory counts to true.
Four Common Approaches to Cycle Counting:
Option 1 – Skip Cycle Counts! (Mostly)
Customers that skip cycle counting typically produce and immediately ship to customers or to an outside storage facility. They are close to just-in-time or lack the storage capability to store products in-house.
Cycle counting makes less sense for these customers, because they have less finished goods inventory. When they do cycle count, the on-hand inventory is low as a result of their business processes.
For businesses like this, rare cycle counts are completely acceptable. However, ParityFactory makes cycle counts so easy that we still recommend doing them every six months.
Option 2 – Regularly Cycle Count the Entire Facility.
These customers conduct cycle counts for all items regularly, so they carry out the work location by location to ensure accurate inventory. This is the most labor-intensive approach, but for these customers, the ROI is worthwhile.
ParityFactory customers typically have single digit inventory variance, which drives the ROI of frequent cycle counts even higher. This high accuracy is attributable to the ease-of-use of our Cycle-Counts feature, combined with quality training and diligence from the Warehouse Team.
Option 3 – Separate Items by Location.
Customers with large cooler/freezer storage areas that separate product by location make it possible to cycle count just certain FG locations. The items are both physically separate and tracked in separate Parity.
This makes sense for folks with few SKUs or consistent grouping of SKUs, in combination with the physical space necessary to keep things separate.
For those that have the SKUs and the space, this is a great way to go!
Option 4 – Conduct Tiered (ABC) Cycle Counting.
This is the industry standard. Cycle counting by setting different product tiers allows you to do cycle counts only for certain tiers.
Each product can also be its own tier, so you can set cycle counts to only be for one product. This removes the requirement for location during cycle counts, allowing workers to only scan the products in that tier.
No Matter the Method, ParityFactory Keeps Your Cycle Counts Accurate.
Each of these methodologies has its place! That said, no matter who you are or what you make, we recommend consistent Cycle Counts to keep your inventory and books accurate! People on paper or Excel have dramatically higher inventory variances than those on a digital system. Systems like ParityFactory prevent Cycle Count errors and also keep track of which spaces and products have been counted.
Have high inventory variance? Reach out and we’re happy to demo how we solve it!
