TABLE OF CONTENTS


Regular audits of inventory, in combination with good inventory management policies, can help increase accuracy by finding and correcting inventory errors. It is common for financial departments to require yearly counts to validate numbers prior to year-end or other financial reporting. But more frequent counts, referred to as Cycle Counts, can result in higher levels of inventory accuracy.


Cycle Count Pages


The Cycle Counts - WOS Manager page goes over the WOS Manager (Desktop) side of the Cycle Count Procedure. This page includes: 

  • How to Perform Cycle Counts From WOS Fulfillment
  • Auto Apply Cycle Count Setting
  • Cycle Count Permissions Settings
  • Hot to Confirm Cycle Counts
  • How to Perform Recounts
  • Creating Cycle Count Tasks
  • Cycle Count Work Queue
  • Aggregate Count

 The Cycle Count - WOS Fulfillment page goes over the WOS Fulfillment (App) side of the procedure. This page includes:

  • WOS Fulfillment App Cycle Count Procedure
  • How to Perform a Spot Count
  • How to Complete Cycle Count Tasks
  • Lots

The Cycle Count - WMS Fusion page goes over the WMS Fusion (Old App) procedure. This will be deprecated in the future. 


Yearly Full Counts vs Regular Cycle Counts

WarehouseOS believes that inventory counts should be both periodic and consistent.


Yearly counts is often a monumental task to audit all inventory in a short amount of time. Extra employees who are not familiar with inventory processes, long hours over late nights or weekends, downtime in the warehouse while stock is counted, are all common aspects of a yearly full count of inventory. Over long periods of time focus can drift and the longer the counts take, the less accurate the counting processes can become.

 

In contrast, cycling through the inventory in smaller volumes at regular intervals can provide a much higher confidence in the reported inventory numbers. Teams of more dedicated employees can focus for shorter periods of time. Those familiar with inventory processes will perform counts more accurately at a faster rate. Instead of auditing inventory numbers once a year, this cyclical process can provide multiple audits throughout the year.

 

Developing a Cycle Count Plan

Depending on the size of the warehouse, it is recommended that the full inventory is counted once a quarter or no less than twice a year. The total number of locations divided by 12 (12 weeks per quarter) will provide a baseline of how many locations would need to be counted per week. This schedule can then be adjusted for a realistic expectation for what is possible for the warehouse team and operation. A cycle count plan should also consider that high touch locations, like those existing in pick faces, should be counted more frequently than backstock or reserve locations that are handled less frequently. An adjusted cycle count plan might count the pick face monthly while counting the backstock every 6 months; a plan that would compromise on the initial quarterly count expectation so that high-touch locations can be counted frequently while making it realistic for the team and size of the warehouse.


Having a drawing of the warehouse layout can help in creating a cycle count plan.  The adjusted plan presented below highlights a pick face that can be counted every 3 weeks and a backstock that is divided over an 8 week period.  This requires at least 2 aisles counted each week.  If that is too much for the team to perform, the backstock could be divided again to be counted over a 16 week period, which still meets the recommendation of frequent counts of high-touch areas while counting the whole warehouse multiple times a year.


Blind Counts

Performing a count "blind" refers to previous knowledge of what is expected to be counted. Knowing what to expect can sometimes skew results. If an employee has their focus drift or even ends up with a quantity slightly off, knowing the expected quantity could result in the employee "meeting expectations" instead of recording what the true count was. By hiding the current quantity for the count, the employee is left to report what they are actually counting with no previous expectations. Especially for more inexperienced, or less invested, employees this can result in higher accuracy.

 

Blind counts should not be considered the only right way to perform a count. Knowing the expected quantity can help those who are dedicated and invested to speed up the count and improve accuracy. For those that know the expected quantity, they can question the count they are about to submit and double check their numbers. Knowing when to use blind counts vs showing the expected quantities will be different for each operation and team performing the counts.


Confirming Cycle Counts

Cycle Counts can be applied in WarehouseOS in two different ways. By default, Cycle Count is a 2-step process that requires an approval before the counts are applied. After counts are performed on the tablet, they are made available in the Cycle Count Confirm page of WOS Manager so they can be reviewed. A completed count can be either:

  • Rejected - The count is deleted. The adjustments are not applied and no further action is taken
  • Applied - The count is confirmed and accepted. Any adjustments as a result of the count are made against inventory at this time.
  • Marked for Recount - The count needs a second review before being applied. The already completed task remains in the Cycle Count Confirm page and a new task is created to have that count performed again. When the recount is completed, the counts can be compared and assigned one of these three decisions.

A 1-step Cycle Count is also available by enabling the system setting "Auto Apply Cycle Counts". With this turned on, all counts are immediately confirmed and applied. They won't be made available in the Cycle Count Confirm page, waiting for a review. Any inventory adjustments are immediately made when the count is submitted from the tablet.


Scheduled vs Spot Counts

Scheduled Counts are planned and scheduled as tasks in the Work Queue. Employees pull tasks to the tablet and those tasks are removed from the list as they are performed. Scheduled tasks should be used when putting the yearly cycle count plan into action. Rows, Zones, or Areas can be used to select the needed locations and create the tasks to ensure they all get counted. As counts are performed the list of tasks will reduce until it's time to schedule the next section.

 

Spot counts allow for an unplanned count to occur as needed. Another term commonly used is an ad-hoc count. Tasks are not created ahead of time, but instead the details of the count are entered directly into the app as need.


Location vs Item Counts

 WarehouseOS distinguishes between a Location Count and an Item Count.

 

When performing a Location Count, ALL items within that location must be counted. If WarehouseOS has record of an item existing in the counted location, but when the count is submitted that item is not present in the counted details, it will be assumed that the item is missing and adjusted to 0 quantity in that location. A common mistake is to perform a Location Count when trying to audit a single item, resulting in all other inventory in that location being removed from inventory. Using the 2-step process where counts must be applied from the Cycle Count Confirm page can help identify this particular issue before it affects inventory.

 

Location Counts should be used when performing the cyclical inventory counts. Even empty locations should be counted and validated as being empty. Using Location Counts for this purpose ensure that any inventory that has not been accurately tracked will be found and adjusted either in or out of the system.

 

An Item Count allows for a more pointed count to validate a single item within a location. When performing an Item Count, all other items in the counted location will be ignored.

 

Item Counts should be used when trying to validate a particularly troublesome item. It will speed up the counting process by focusing on just the item in question instead of needing to count all of the inventory. Item counts can be scheduled against individual inventory records or against the item itself. By scheduling counts against the item, tasks will be created to count the item in all known locations, allowing for a full audit of the item's inventory.

 

Item Counts will not help to "find" inventory that has been misplaced. It won't add items that were not previously recorded and it won't remove items that were thought to exist, unless those scenarios exist specifically for the item being counted.

 

Special Considerations


Retail Store Inventory

Some customers have used WarehouseOS to manage inventory in their retail stores.  Because the Cycle Count function was built for a warehouse configuration, it is not setup to be ideal in a retail environment.


In a retail environment, inventory is not tracked by location.  To perform a Location Count against the retail space, it would have to be broken out into sub locations.  Each sub location could be counted in full.  But changes in layouts, new displays, and customers moving inventory in the store would have to be considered in terms of inventory management.  
Integrations become more difficult because when a sale is made, WOS would have to then identify which sub location that inventory came from.  Failing to make that determination could result in inventory not being decremented as needed.


Item Counts in the retail space could allow multiple employees to count different items.  In this scenario employees have to find and count all instances of a single item.  By using the Spot Item Count in the new WOS Fulfillment, users could find missing items by counting them into the system.  But if multiple employees are counting the same item, one count would override the other.