Traditionally, a physical inventory count is executed once a year by many organizations. Throughout the process, all shipments and receipts are detained (which often holds up the shipment process), and employees count everything in stock. Once inventory is calculated, inventory records are corrected and companies know what they have in inventory for a short time. The dilemma is that the day after the count is completed, inventory is often wrong once again. Cycle Counting can decrease the problems of missed counted inventory (Cycle Counting 2009).
Cycle Counting consists of counting each shipment received from suppliers daily and quarterly every year. Currently, when shipment arrives at the receiving dock area, receiving supervisors compares shipping documents against scheduled incoming orders (University of Phoenix 2009). Following validation of the materials to be received, the receiving area team moves the raw materials into the raw material area in the factory. At the end of the day, the receiving area supervisor gives the log of raw materials received during the day and the associated shipping documents to the receiving clerk. Lastly, the inventory clerk enters the information related to the raw materials receipts into the inventory system (University of Phoenix 2009). The implementation of cycle counting will initiate in the beginning of the current processes.
Once the shipment arrives at the dock, the receiving supervisor will compare the bill along with the inventory team specialist who counts each shipment by hand (along with another team member) and examining the merchandise to guarantee top notch condition before the product is shipped to the customer. As the shipment is moves from each department, the product is counted to insure accuracy. Managers, employees and supervisor all work together as a team in eliminating missed inventory, damage goods and the mishandling of material by making cycle counting part of the daily processes. Cycle Counting will insure a more accurate inventory and will help correct and identify problems before they become extensive, and an atmosphere of continuous improvement and problem solving through ongoing corrective action (Cycle Counting 2009).
References
University of Phoenix. (2009). Week Four overview. Retrieved January 7, 2009, from,
University of Phoenix, week three, Resource. MGT449—Quality Management and
Productivity Web Site:
Cycle Counting Can Improve Your Inventory Accuracy (2009) Retrieved January 21, 2009 from,
