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Logistics
Cycle counting
Quick answer
Continuous small-batch counting with no activity stops - modern alternative to annual physical inventory.
Key takeaways
- ABC analysis: A SKUs (top 20% sales) counted monthly; B (60% sales) quarterly; C (rest) twice a year
- Trigger-based: auto-count on understock, after return, after GRN discrepancy
- Location-based: rotated geographically
Definition
Cycle counting is the technique of counting small SKU subsets continuously throughout the year, instead of a 1-3 day annual physical inventory that halts operations.
Prioritization
- ABC analysis: A SKUs (top 20% sales) counted monthly; B (60% sales) quarterly; C (rest) twice a year
- Trigger-based: auto-count on understock, after return, after GRN discrepancy
- Location-based: rotated geographically
Benefits
- Uninterrupted operation (warehouse keeps running)
- Stock accuracy constantly >99% (vs 92-95% pre-annual)
- Early error detection (no "surprise" at year-end)
- Fiscal compliance if the procedure is documented
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Frequently asked
Can I fully replace annual physical inventory with cycle counting?+
Operationally, yes. Fiscally, many jurisdictions require an annual validation - which can be a full cycle sweep, but not a blackout.
Where CRMconnect fits
Related terms
Logistics
WMS (Warehouse Management System)
The system orchestrating physical warehouse operations: receiving, putaway, picking, packing, shipping.
OperationsNIR / Goods Receipt Note (GRN)
Internal document confirming the physical receipt of goods in the warehouse - the pivot between supplier delivery note and invoice.