It is the process of continually validating the accuracy of the inventory in your system by regularly counting a portion of your inventory, on a daily or weekly basis, so that every item in your inventory is counted at least several times a year.

• Strong ARS (Auto replenishment System) lead to increase in sales: It's impossible to fully take advantage of the replenishment functionality found in many small retail software packages without maintaining accurate inventories in your system. It's the old saw; garbage in, garbage out. And experience has proven time and again that maintaining accurate inventories and fully utilizing replenishment software leads directly to sales increases.

• Correct Inventory Information in Software, to confident in front of customer: Customer service is not taken care by salespeople, who don't trust the inventory in the system. When the information is wrong, and the needed re-orders aren't coming in when they're needed, it's very difficult for even the most skilled salespeople to present a confident, positive face to the customer. In fact, it's usually the best salespeople who are the best gauge of how far off the inventories in the system have become. A regular cycle counting program directly impacts your customer service and the face you are putting forward to your customers.

• Increase Operational Efficiency: Counting your inventory on regular basis imposes an additional level of operational efficiency. If you are constantly counting something, then inventory must always be organized, retail displays filled in, fresh receipts promptly put away, committed inventory properly tagged, transfers processed and closed out. Work cannot be allowed to linger uncompleted, so things become more buttoned down. And when you are counting something every day, every member of your team will become more aware of both physical inventory control and inventory accuracy in your system.

• Quick Diagnose and Quick action for any malfunctioning: Frequent cycle counting shortens the period of time between physical counts of any given item. As a result, the cause of any discrepancies that turn up during a cycle count will have been recent. This gives you a much better opportunity to fully diagnose the cause of the discrepancy, close any procedural loopholes and coach any human errors. Inventory write-offs, as a percentage of inventory investment, are much lower with regular cycle counting.

• Control group cycle counting – This type of cycle counting focuses on counting the same items many times over a short period. The repeated counting reveals errors in the count technique, which can then be rectified to design an accurate count procedure. It will be planned for Continuous Negative or Positive Articles

• Random sample cycle counting – If warehouse has a large number of similar items, we might randomly select a certain number of items to be counted during each cycle count. This helps reduce disruption of any one category at once, and we can carry out a count during business hours.

• ABC cycle counting – ABC cycle counting uses the ABC inventory management technique and Pareto principle to classify items in A, B or C categories based on value or Qty. With this approach, A items are counted more frequently than B and C items

• Cycle counting must become part of daily or weekly routine. The only way to get the full benefit of any cycle count program is to count regularly, every day or every week, without fail.

• Set up a schedule for conducting cycle counts. Recommendation of develop a 13-week cycle count calendar. Schedule to count everything at least once in that 13-week period, and faster turning, higher volume items and categories two or three times. Most software packages allow to conduct a cycle count by category or subcategory, so break down what we plan to count each day by category or subcategory, and schedule counts. Then, keep our schedule.

• Like any physical inventory, the key to obtaining an accurate count is the Pre preparation before begin counting. These pre-count preparations includes filling in and organizing all display tables, shelf facings, organizing all understock, overstock and backstock areas. This preparation needs to take place the day or night before the actual cycle count, so that on the day of the cycle count there's no question that the inventory is ready to be counted.

• Like a full physical inventory, we will need to close out any open inventory transactions in those categories or subcategories that need to count before we start. All restocking from understock, overstock or backstock must be completed before counting begins. All received purchase orders and inbound transfers need to be received in the system and physically put away. All completed customer orders need to be closed and invoiced. If we have any transactions still open, they will need to be reconciled with actual count before closing and posting the cycle count, and that makes reconciliation as time taking process.

• Cycle counting inventory on the sales floor often is the biggest challenge for small retailers. It's not always possible to complete a cycle count before the store opens. In that case, need to keep track of any inventory movement on the sales floor in the category or subcategory that are counting after the cycle count has been opened, but before the actual counting has occurred. This movement includes any sales might make, but also includes any merchandise a customer might pick up and carry around the sales floor before purchasing. We will need to add back these units to your actual count before we enter it in the system.

• Start small. Don't try to count your biggest or best-selling category or subcategory right away. Start with something smaller, with less movement, to learn how software package works and build up understanding of the process. Recommendation to spend a month of counting carefully selected categories or subcategories, building up skill and confidence, before implementing a 13-week schedule.

• Cycle counting should be a part of the normal operations of the facility.

• Cycle counting should be scheduled to be done as frequentlystrong> as possible. The higher the frequency of cycle counting, the higher will be the accuracy of inventory and lower will be the inventory write-offs.

• A proper classification of items into ABC groups should be done. Item classification should be reviewed periodically (monthly/ quarterly). Generally accepted rules of thumb are that Group A should comprise of about top 70% of inventory value, group B next 15% and Group C the bottom 15% of inventory value. The best way to base ABC classifications is on value of shipments and value of inventory at hand.

• The assignment of dedicated cycle count teams allows to train a number of individuals in the organization to perform these tasks. The size of the team will be dependent on the size and complexity of a company’s inventory.

• It is recommended that on an average every product should be counted at least once every quarter.

• Items should be counted by individuals independently, and a blind comparison of their counts should be made before adjustments are recorded.

• Sources of error should be investigated and action should be taken to prevent those errors from occurring in the future. It is crucial to identify and fix process or training issues that cause inventory errors.

• Inventory accuracy metrics should be tracked over time and targets set for inventory accuracy.

• Cycle counting should be done at the start of the day before the operations of the facility have begun in full-swing.

• Cycle counting process should be well-defined and documented.