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Warehouse Cycle Counting Guide

By Bill Carlin

Bill Carlin is a graduate of the Wharton School at the University of Pennsylvania. He has experience selling on every major eCommerce platform including Amazon, Ebay, Walmart.com, and more. Contact Bill today to learn more about Shipmate Fulfillment.

One of the most important aspects of inventory management is insuring that all inventory counts are accurate. Accurate inventory counts allow your business to know where stock levels are at all times and helps to prevent over selling. Cycle counts are a key practice to establishing good inventory management within your business.

Inventory counting

 

Counting Individual Items

Many times, smaller size items may be stored in a singular bin to save storage space. When storing loose items that are no longer in their original case pack, there are two methods I recommend using for an accurate count.

1. The first method is uniform grouping. This method is where you place a set number of same items into groups of uniform quantity. You can then multiply the quantity of groups by the quantity in each group. For example, I like to group items into sets of 5 or 10 in piles on a large empty table. If I had 102 cell phone chargers, I could sort these into 10 piles of 10 chargers and would have a remainder of 2. This would allow me to do the simple math of (10 x 10) + 2 = 102 to get my count quickly and accurately. This is a lot faster than counting each piece one by one.

2. A faster but slightly less accurate method is estimating the count based on weight. This method is where you weigh one unit to figure out how much each piece weighs, and then divide the total weight of all units by the weight of the single unit to get an accurate estimate. There are a few things to keep in mind with this method. First, you need to remember to remove the weight of whatever container you are using from the weight of all the units. Not doing this will result in an over count. Another thing to keep in mind is that this method will result in an estimate and most likely not exact like the last method. Most items have slight variations in weight. Although these variations are not very large, over a few hundred units even a small variation in weight can result in an under or over count. To improve the accuracy of this estimate further you can take an average of multiple individual units' weights to find the average weight of each piece. This will make for a stronger estimate. For example if I know each charger weighs 0.35lbs and the entire bin of chargers weighs 35.85lbs, I know that 35.85/0.35 = about 102 chargers.

Counting Units In Cases And Cartons:

Most items come from a manufacture or supplier in what is known as a case or carton. Most cases or cartons have a uniform case pack quantity. Case pack quantity is the number of units that are placed into each carton for transit and storage. If I know the case pack is uniform I can use that information to count large amounts of inventory very quickly. It is very important to check the case pack of your item before proceeding. The carton may or may not have the case pack printed on it, but it is important to check either way as mistakes with case pack are common especially when importing. Once you confirm the case pack quantity, you can simply count the number of cases you have and multiply by the case pack quantity. For example, if my chargers come 144 per case and I have 26 cases in the warehouse, I know I have 144 x 26 = 3,744 chargers. This is the most efficient way to count case packed products.

Counting Pallets:

When you are ordering larger quantities of inventory you will have to store that inventory in an efficient way. One of the best ways to store bulk inventory is on pallets. Keeping pallets in uniform quantities makes inventory management and B2B fulfillment easy. To count the number of cases on a pallet quickly you simply multiply the number of boxes per layer or block by the number of layers per pallet. For example if I have 6 boxes per layer and 5 layers on a pallet, then I know I have 6 x 5 = 30 cases per pallet. If I know how many cases per pallet I can then multiply the number of cases per pallet by the number of pallets. Just like with our individual item example, do not forget about adding in the remainder cases. For example let's say I have 10 pallets of chargers and 5 cases sitting on a partial pallet. I then know I have (10 x 30) + 5 = 305 cases. I know how many cases I have total and can refer to the above section on counting units in cartons and cases. For example 305 cases x 144 units per case = 43,920 chargers. With this method you can count extremely large quantities of inventory in a short time.

 

Topics: inventory management, 3PL, Logistics

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