Inventory Control – Manufacturing – Cycle Count

One common requirement for Inventory Control is to Cycle Count inventory to ensure that the perpetual inventory is staying in line with the actual as well as gauge the accuracy of the current perpetual inventory. To use InControl to help with this need, you would need to do the following:

1) Select a location to cycle count. In most cases the most accurate and effective way to cycle count is by location. As a cycle count will occur while the plant is operating, tracking down the inventory for a given product code is extremely problematic as it could be spread out all over your plant and will be too dynamic. The first step is to select a location to cycle count. Marking off the area to indicate that no material should be moved from it during the count is a good idea. The script would allow selection of a location (either a scan or manual entry/selection) and then would validate that it is a recognized location. Many cycle count programs also require that everything be counted multiple times with increasing frequency based on the ABC classification or turns velocity of that product code. This script could use a table to keep tabs on when the last time the location was counted would be very useful in that it could check this date and notify the user if that location had already been counted in the required time frame (controlled by system parameters set in the InSuite Application Configuration module). allowing them to move to another location that needs counting.

2) Once a suitable location has been selected, the system would take a snapshot in the background effectively freezing the inventory for that location. The user could then proceed to scan all products/lots physically in that location. This would allow the application to compare these scans to the snapshot and notify the user (via screen prompts and different sounds) whether that product indeed is expected in that location. If the product is expected there, the script would then ask for a count – usually without telling the user the quantity – and again either confirm or alert the user to the match or discrepancy by providing screen and audible feedback. If the quantities are off, they can recount/ confirm the quantity and these differences would be fed into a potential inventory adjustment table for later review by an inventory control specialist/supervisor. If the product is NOT expected, then a list of expected inventory locations for that product can be displayed for immediate corrective action or recorded for further analysis. Efficiency can sometimes be improved by having general stockroom employees simply scan inventory to cycle count and having other specialists follow up later and correct inventory based on their company’s procedures. In addition, workflows can be created to do some of the research automatically such as identifying whether the inventory that is physically in the stockroom matches inventory in the perpetual that is “upstream”. An example of this is product that was received or inspected and physically moved to the stockroom but the transaction to move it from the receiving dock or quality control department simply was not recorded. This would allow automation of common inventory corrections and streamline the process.

3) Once all inventory has been counted for a location, that can be recorded to a table and this will tell the system that this location does not need counting until it is due again based on the interval set by the inventory control department. Also, these activities will be recorded by location, operator, and product which will provide valuable insight into the inventory accuracy of a given product or product line, the counting efficiency of the operator, and the general accuracy of a department or warehouse. This information can be presented as a dashboard of kpis, graphs, and reports to provide management the information they need to monitor and control this critical process.

4) Finally, because InControl is a workflow based product, automated and trigger based email alerts and reports can be generated using our InQue product. Also, other processes may be easily integrated such as managing retesting and disposal of product with expiration dates to keep your inventory clean and available for production when and where it is needed!

About the Author

Dan Mindlin is the President and Principal Consultant and has been with the Mindlin Consulting Group since its inception in 1999.