Cycle Counting

Overview

If you need to count inventory on a regular basis, then you may want to learn more about how to perform cycle counts. Let's start with a definition: "A cycle count is a periodic issue of a count tag to count inventory quantity within an item site." The "periodic" aspect of cycle counting will be the focus of this article. 

Info: You may also find it useful to refer to the Count Tags tutorial, where the mechanics of count tag processing are discussed in more detail.

Cycle Counting by Class Code

To begin, let's look at a scenario in which we have a site called "WH1" and a class code called "TOYS-COMP." Our goal for this exercise will be to cycle count all the items belonging to the TOYS-COMP class code that are located in site WH1.

The screenshot below shows the item sites we will be cycle counting. To open the "Item Sites" screen, follow these steps:

  • Go to the "Inventory" module from the top menu
  • Select the "Item Site" submenu
  • Choose the "List" option
  • The "Item Sites" window will open. Click the MORE button to specify search parameters:

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Item Sites in WH1

It just so happens that several of the items located in site WH1 also belong to the TOYS-COMP class code. The next thing to do is to see whether any count tags already exist for these item sites. To check on pre-existing count tags, let's open the Count Tag Edit List, specify our site/class code combination, you can do this by following these steps:

  • Go to the "Inventory" module from the top menu
  • Select the "Physical Inventory" submenu
  • Select the "Reports" submenu
  • Choose the "Count Tag Edit List" option
  • From the "Count Tag Edit List" window select the "TOYS-COMP" class code
  • Click the QUERY button to compile a list of count tags: 

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Empty Count Tag Edit List

Before we create the count tags for our items in site WH1, let's first understand the underlying issues involved with cycle counting.

Note: Cycle count tags are the count tags created when a cycle count is performed.

Cycle Count Frequency

First of all, we need to look at cycle count frequency settings. These settings indicate how frequently an item site should be cycle counted. For example, if the cycle count frequency for an item site is set to "30," this indicates the item site should be cycle counted every 30 days; if the setting is "5," the item site should be cycle counted every 5 days, etc. The following screenshots show the item site master for item YTRUCK1, one of our target items. To open the item site master for YTRUCK1 follow these steps:

  • Return to the "Item Sites" window
  • Locate and open the YTRUCK1 item in the WH1 site
  • The "Item Site" window will open, as shown below:

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Cycle Count Frequency for Item Site

As you can see in the example, the cycle count frequency for item YTRUCK1 is set to "30." This means the item site should be cycle counted on a monthly basis. 

Info: A cycle count frequency must be specified on an item site master for cycle count tags to be created. If no cycle count frequency is specified, no cycle count tags will be created when the "Create Cycle Count Tags" utility is run.

You might ask: "How do I manage my cycle count due dates?" or, "How can I keep track of when item sites were last counted?" The answer is that xTuple ERP monitors this information for you. Take a look at the next screenshot, which shows the inventory module display "Item Sites," filtered by class code:

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Last Counted Dates for Target Item Sites

As you can see in the example, we are displaying all item sites in site WH1 belonging to the "TOYS-TRUCKS" class code. Not only do we see item numbers and item descriptions, but to the right of the window we also see a column labeled "Last Cnt'd." This column displays the date when a given item site was last counted. xTuple ERP monitors this information and displays it for us here.

Note: The term "last counted date" has a very specific meaning. Item sites are only considered to have been counted if count tags for them have been posted. Simply issuing a count tag is not enough to mark an item site as having been counted. Issued count tags must be posted for the count to be registered.

Creating Cycle Count Tags

To recap, we have identified that our item sites have not been cycle-counted recently, if at all. Remember, the cycle count frequency for these item sites indicates they should be cycle-counted monthly. So the next step is to initiate a cycle count. To do this, we open the "Create Cycle Count Tags by Site" window. This can be done by following these steps:

  • Go to the "Inventory" module from the top menu
  • Select the "Physical Inventory" submenu
  • Choose the "Create Cycle Count Tags" option to open the window shown below:

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Create Cycle Count Tags by Site

As you can see in the example, we have specified the parameters required to produce our desired result—namely, the creation of cycle count tags for items in class code: "TOYS-TRUCKS-Toy Trucks," located in site WH1. Here are the parameters we specified:

  • Site: Selected WH1.
  • Class Code: TOYS-TRUCKS
  • Mark Created Count Tag as Priority: Selected. Count tags marked as having priority status are listed first in any prioritized lists. For example, priority count tags will appear at the top of the "Count Tag Edit List;" whereas, non-priority count tags will appear at the bottom of the list.
  • Freeze Inventory: Selected. We are specifying that inventory be frozen during the cycle count. Freezing inventory during a cycle count helps preserve the integrity of "Quantity on Hand" (QOH) values. For more information on freezing and thawing, see the section dedicated to that topic.
  • Maximum Number of Tags to Create: Entered 20. Indicate the maximum number of cycle count tags you want to be created—up to a maximum of 1,000—during the cycle count. In our case, we are dealing with fewer than 20 item sites. By entering a maximum of 20 will cover our bases.
  • Comments: This is a scrolling text field with word-wrapping for entering comments related to the cycle count. Use the "Comments" field to enter any instructions or other comments that need to reach and be read by the cycle counters.

Once our parameters have been entered, we are ready to select the CREATE TAGS button. Doing so will create our cycle count tags. To verify the cycle count tags have in fact been created, we return to the "Count Tag Edit List." Sure enough, they do appear on the list, as shown in the following screenshot:

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Count Tags Edit List Showing Cycle Count Tags

Note: Cycle count tag numbers are generated automatically by the system in a sequential pattern, using specifications entered on the site master. Within the site master you can specify both the prefix to be used by count tags created in the given site (e.g., WH1) as well as the starting point for the numeric sequence.

At this point, the cycle count tags would be processed in exactly the same way as manually created count tags are processed. Again, for more information on the mechanics of count tag processing, refer to the section dedicated specifically to this topic.

Since we will not be covering count tag mechanics in this example, let's assume we have counted the item sites and posted the results. Our target item sites have now been counted. The final step would be to verify that the "Last Counted" date for these item sites has been updated. Let's look again at the "Item Sites by Class Code" window, as shown in the following screenshot:

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Item Site Display Showing Updated Last Counted Dates

The date in the "Last Cnt'd" column should be updated to correspond with our cycle count activity. With this, we have now successfully completed the cycle count.

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