Let’s all be honest with ourselves: nobody actually enjoys doing inventory counts.

Sure, knowing what you have on hand is important, and there’s always a sense of relief when it’s over/you have a better understanding of what products your inventory currently has in stock, but the idea of actually performing a top-to-bottom inventory check every time it comes around (yearly, quarterly, etc) can be exhausting for your staff and (potentially) may not be the best use of your resources.

“But what can you do?” you say, unsure if there’s any other way to handle your inventory concerns. You’ll probably be excited to learn, then, that there are other methods of counting inventory—all of which take much less time than a full inventory count and can still go a long way towards giving you the most accurate information possible about your current inventory without taking up as many man-hours as the traditional methods. Let’s take a look at a few inventory count alternatives and help you figure out which one is best for your warehouse:

 

  • Cycle counts: One of the most popular forms of alternative inventory counts available today, cycle counts are a method of counting a specific section of inventory on a set schedule. These are usually done by location, item type, or both, and can be scheduled at regular intervals during the year. For example, you can set a schedule to have one set of pallet racks or storage shelving counted every few weeks, or review a specific item type on a regular schedule to make sure they’re all still there. Cycle counts may not be a perfect solution for every warehouse, but for certain inventory types or warehouses on the larger size it might be a much better solution.
  • Inventory sampling: Inventory sampling is a method of tracking inventory that works better for warehouses that deal in a wider variety of inventory levels and item types. Inventory sampling generally requires counting a small number of your most expensive items, and then distributing the other items into smaller zones from which samples are taken. This sample data is then extrapolated into their respective zones (involving some slightly tricky math—this is where counting software may come in handy) and then added up to provide an accurate picture of how your inventory levels are looking. Automated warehouses will likely benefit the most from this method as their inventories will be a bit more strictly regulated (and not subject to human error, as many are) and while this method requires more math than usual it’s still worth looking into.
  • Sales ranked counting: This final method is something of a cross between the first two. Similar to cycle counting, sales ranked counting requires you to only count a select group of items per counting period, but in this method (also known as “ABC cycle counting”) can prove useful in many cases. In sales ranked counting, you divide your inventory up into three (or four) categories: A items that account for 20% of sales, B items that account for 15% of sales, C items that account for 4% of sales, and in certain cases you’ll have an X category that represents the bottom 1%. You’ll then set up a schedule to count these items as needed through the year—A items get counted 4-6 times per year (or every other month as needed), B items are only counted 3 times, and so on. This is a good method for warehouses that experience a pretty clear delineation in sales across multiple items, and can help you keep better aware of your inventory counts without needing to perform longer, more costly inventory counts through the year.

 

Depending on the size, layout, and primary function of your warehouse, any of these could be a good alternative for inventory counts, and may be worth considering during your next inventory period.

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