Cycle Counting Definition & How-To

A cycle count is an inventory auditing procedure that allows users to check the accuracy of a subset of inventory. It helps ensure that the physical inventory present in the warehouse matches the inventory in ShipHero.

Cycle Counting - Definition
Benefits of Cycle Counting
How to Create a New Cycle Count
How to Monitor Inventory Updates During Cycle Count
Further Resources

Cycle Counting - Definition

Cycle counting allows you to perform periodic counts and maintain accurate inventory without stopping your day-to-day operations. It is a more flexible process than a total physical count, which would involve shutting down operations and counting everything in the warehouse.

Benefits of Cycle Counting

1. Cycle counts are less disruptive to daily operations since you can cycle count without shutting down your warehouse. Users can still receive inventory, pick, pack, and ship orders without disruption.
2. Cycle counts can be tailored to focus on specific items such as high-value or high-selling SKUs.
3. Having accurate inventory means:
   • Less time to fulfill orders, allowing orders to get out the door faster
   • Fewer mis-picked items
   • Faster pick times
   • Fewer emergency replenishments (occurs when you have less inventory than expected)
   • Fewer over-replenishments (occurs when you have more inventory than expected)
   • Less manual inventory adjustments
4. Cycle counting can help you identify areas to improve your operating procedures by:
   • Identifying consistent inventory mistakes
   • Finding damaged inventory before it gets picked
   • Locating inventory stored incorrectly
5. Consistent cycle counting ensures that your physical inventory matches your systematic inventory, making your whole process more efficient!

How to Create a New Cycle Count

• From the ShipHero Dashboard, navigate to Inventory > Cycle Count.
• Choose the type of Cycle Count you want to create. Your choices are:
  • Locations
  • Items
  • Items flagged for recount

NOTE: The above cycle count types are for warehouses using Dynamic Slotting.

• Next, select your filters for the Cycle Count. The filters will vary depending on the type of Cycle Count you choose.
• For Locations Cycle Counts, filters and fields include:
  • Assigned to
  • Due Date
  • Sort Options
  • Exclusions
• You can choose specific location parameters to further narrow down or expand the scope of the Cycle Count.

• For Items Cycle Counts, filters and fields include:
  • Assigned to
  • Due Date
  • Sort Options
  • Exclusions
• For Items Cycle Counts, instead of specific location parameters, you can choose to select a specific client. This is especially helpful if a client is disputing an inventory count or looking for an audit.

• For Items Flagged for Recount Cycle Counts, filters and fields are more limited. For this type of count, the most important fields are listed under Item Parameters, which allows you to input a specific SKU to be recounted. Or you can choose to recount all the items that have been flagged.

• Once you have selected the necessary filters, click the Create button. ShipHero will create a new Cycle Count for you based on your selected criteria.

Managing your Cycle Counts

You can track all of your Cycle Counts from the dashboard. At a glance, you can see if their status is Pending, In Progress, or Closed. You can also track important details such as the due date, the assigned user, the progress percentage, and any discrepancies.

Note that under the Cycle Count column, the type of cycle is listed beneath the name. Selecting a specific count will display slightly different information based on the cycle type.

For example, if you click on an Item type cycle count, you will see which SKUs are part of this cycle:

You can add items to the cycle and remove items that have not been counted yet. Once an item is assigned to a counter, the item cannot be removed from the cycle.

You can edit details such as the name and due date for the cycle:

You can also choose to end the cycle count at any time.

Click on the End Cycle Count button in the upper right-hand corner of the screen.

NOTE: The inventory total from the Cycle Count will be saved once the count has completed.

What if a cycle count batch does not close?

In some instances, a cycle count will not close. Please view the batch and check to see if some of the locations are locked (The locations will be grayed out):

If so, then check the boxes next to the items of the locations that are locked, and the option to remove the lock will appear at the top of the table:

Other details include:

• Expected quantities
• Counted quantities
• Which user counted the item
• Time tracked

When you click on a Locations type cycle count, you will see which locations are part of this cycle. You will also see all the SKUs in the bin:

NOTE: The Export CSV button allows you to download these details as a CSV file so that you can use the data to make strategic business decisions.

Recounts and How to Manage Them

A recount is when another user counts an SKU to confirm the discrepancy from a previous count.

By default, variances are not required to be recounted by another user. If you want a recount enabled, you can change this setting to flag discrepancies for a recount for additional accuracy.

Recounts are flagged until 2 consecutive counts confirm the discrepancy.

Example

Assume that the expected amount is 10, but the counter counts 8. A few are picked from that location, so the new expected is 8. If the counter counts 6, ShipHero will close the recount and update the on-hand to 6.

The SKU will be flagged for another recount if the discrepancy does not match.

Types of Recounts

• Unit Discrepancy
  • When the expected amount (what ShipHero thinks is in that location) does not match what the counter inputs during the count.

• Unexpected SKU in Location
  • When counting by location, the user must count all items in that location. If there is an unexpected item, we will flag that item for a recount and have a counter check all the sites with that SKU to see where there was a mistake.
    
    When counting by SKU, we do not check for unexpected SKUs in the location since we only care about the specific SKU for that cycle. If a SKU not part of the cycle is scanned, we return an error and tell the user to scan a different SKU.

• Lot Discrepancy
  • This is when the lot ShipHero has in that location does not match the lot that the counter identifies to be in that location. Lots will be flagged and have a discrepancy icon, but will not show to be recounted.
    
    This is because the location cannot have more than one lot, so ShipHero cannot automatically update the lot based on a recount. Instead, the system will flag that SKU and show the lot discrepancy icon in the UI, but it will be up to the manager to check the lot and transfer out the incorrect lot as necessary.

How to Monitor Inventory Updates During Cycle Count

Inventory counts are updated in two locations during a cycle count. 

1. They are logged in the Product's Inventory Log.

2. They are also logged in the Inventory Change Log.

Further Resources

• How to Choose Cycle Count Type for Dynamic Slotting
• How to Create and Manage Dynamic Slotting Cycle Counts
• How to Cycle Count Using the ShipHero Mobile App