TABLE OF CONTENTS Day 45
By day 45, the process will have been defined, the documentation well on its way toward completion, and the control group methodology will have identified root causes with corrective actions. Cycle counting is the next step.
Cycle counting is the process of randomly sampling the inventory location balances in a planned method. This means that while checks are done at random, there is a planning element that makes sure certain parts are randomly selected within certain time periods, usually monthly, quarterly, or yearly buckets.
Many organizations stratify their inventory by value. Called ABC stratification, this layering can be designed to be and is useful for cycle counting and other inventory control purposes. Using ABC stratification, the inventory is layered into categories by value, criticality, and worth to the organization. Parts are counted at planned intervals depending on this assigned value. ABC inventory stratification is covered in detail later in this chapter.
Although it is probably the most popular method in high-performance businesses, the process of systematically counting existing inventory does not necessarily have to utilize ABC stratification. Other commonly executed methods of cycle counting involve planned counts of racks or areas within the storage areas. In this approach, inventory counts are planned by area rather than value. Either way is acceptable, but they can differ in cost to implement depending on availability of software tools and layout of inventory locations. Cycle counting is the process of planned periodic checking for process control of location balance accuracy. It...
