If you plan on shipping and storing your inventory overseas, there are a few things you need to do in order to ensure that everything is properly accounted for and secured. Storage warehouses provide an excellent storage place for your items. However, controlling your inventory is extremely important. It can be done with a method called cycle counting. In this article, we will show you what is cycle counting and all of the basics of this inventory-control method. Additionally, it is important that you remember to do your research and hire trusted storage experts such as Four Winds Saudi Arabia to help you with your items.
What is cycle counting in short
As mentioned above, the most basic definition is that cycle counting is an inventory-control method. It enables businesses to conduct a regular count of several items in different areas in a warehouse. However, it is done without constantly adding up the entire inventory. Performing a full physical count of inventory is very disruptive. Cycle counting on the other hand is not. A small team can perform a cycle count. When storing items overseas, always contact and get a reliable warehouse Saudi Arabia for your items.
How it works
Cycle counting, as mentioned above, requires only a small team. Someone physically counts a portion of an inventory at a preset frequency. So, in an accounting period, usually a year, each item is counted at least once. Items that are more expensive or are fast-moving are counted more often. Sometimes, everyday items are counted. There are three main methods for cycle counting. They are control groups, random sampling, or ABC analyses. Therefore, let’s take a closer look at each one. Get a secure warehouse Jeddah when storing office inventory overseas.
A control group
A designated group tests that the method chosen for counting provides the best results. This means that this designated group counts a small group of items. They count it several times in a short period. During that period, they find and fix possible errors.
Random-sample cycle counting
The second method involves selecting items at random for a tally. There are two techniques in this method that can be used. They are:
- constant-population counting
- diminished-population counting
So, these two techniques differ slightly. For constant-population counting, you add the same number of items each time. On the other hand, for diminished-population counting, you count a number of items but then exclude them from the next count. When it comes to your items in storage, get reliable pallet racking Saudi Arabia experts to assist you.
The ABC cycle-counting
Finally, the last method is Abc cycle counting. This method is based on the Pareto principle. Basically, 80% of the effects come from 20% of the causes. An inventory-control software is very helpful for this. It helps companies categorize items. This method assumes that 20 percent of the items in a warehouse correlate to 80 percent of sales. These are A items. B items are 30 percent of the items and 15 percent of sales. Lastly, C items represent 50 percent of the items stored but only 5 percent of sales.