Also called perpetual inventory, ABC counting, inventory accuracy
What is cycle counting?
Counting a few parts every week all year, instead of shutting the plant to count everything once.
What else it is called
- Other names
- perpetual inventory, ABC counting, inventory accuracy
- In French
- inventaire tournant
Related entries
Understanding cycle counting
Rather than stopping production for an annual wall-to-wall count, a small number of items are counted every day or week on a rotation, with the most important parts coming round most often. Classifying parts by value and movement, then counting the top class monthly and the bottom class once or twice a year, is the usual arrangement.
The real benefit is not the count but the investigation. If a part is wrong by six units this week, the receipts, issues and scrap tickets from the last few days are still traceable and somebody can find out what happened. Wait a year and the answer is unknowable, so the record gets adjusted and the same cause carries on producing errors.
This is what stands between a plant and a planning system that works. A material requirements plan run on records that are 85 per cent accurate generates orders nobody trusts, planners go back to their spreadsheets, and an expensive implementation quietly fails.
In practice
Track the reasons rather than the adjustments. If half your discrepancies trace to unrecorded scrap at one operation, that is one fix worth more than a year of counting.
Frequently asked
Can cycle counting replace the annual physical count?
Often yes, if the programme is well run and the accuracy is demonstrated. Your auditors have to agree, so raise it with them before assuming it. Many Canadian manufacturers run a documented cycle count programme and have dropped the annual shutdown entirely.
What accuracy should we be aiming for?
Above 95 per cent by part number is the usual working threshold for planning to be trusted, and 98 or better for parts that stop the line. Measure it by part rather than by dollar value, because a cheap missing fastener stops production just as effectively as an expensive casting.