What does "cycle counting" entail?

Cycle counting is a method of inventory management that involves regularly counting a portion of the inventory in a systematic manner throughout the year. This approach helps organizations maintain inventory accuracy and identify discrepancies or issues in real-time rather than waiting for a full annual count. By routinely counting selected items, businesses can ensure that their inventory records are accurate, which is essential for effective supply chain management, reducing errors, and improving overall operational efficiency.

The practice of cycle counting allows for more frequent verification of inventory levels, making it easier to identify trends or problems as they arise, leading to timely corrections and adjustments. This method is more efficient than counting the entire inventory at once, as it allows for manageable portions of stock to be verified and tends to result in less disruption to business operations.