Counts and adjustments

Cycle counts check part of the warehouse on a schedule: a zone, a bin, a product or a lot. Each count records the scheduled date, the book quantity, the counted quantity, who counted and the variance. Counts move from Scheduled to Counted. When the variance is within tolerance, an adjustment movement is posted and the count is Adjusted. When it is larger, the count goes to Pending Review for the Inventory Manager, who investigates before any adjustment. Counts are Closed once settled.

Physical inventories count a whole warehouse at once. They move through Planning, Counting, Reconciling, Posted and Closed, with a coordinator, start and end dates and the total value of adjustments.

• Schedule by risk. Fast-moving and high-value items are counted more often.
• Tolerance decides the route. Small variances post automatically as adjustments; large ones wait for review.
• Physical inventory for the full picture. A wall-to-wall count reconciles every position and posts its adjustments together.

Agree the count frequency by ABC class. Agree the variance tolerance, by percentage and value. Agree who reviews large variances and what evidence they need, such as a recount. Agree the physical inventory calendar and the movement freeze during the count.

A cycle count on bin R-14-03 shows a book quantity of 480 bags of lot R-2602. The operator counts 478. The 0.4 percent variance is within the 2 percent tolerance, so an adjustment movement of minus 2 is posted and the count is Adjusted.

The next week, bin P-02-11 shows 120 cartons of a component on the books and 96 on the shelf. The 20 percent variance goes to Pending Review. The Inventory Manager checks recent movements and finds a pick recorded against the wrong bin. The pick is corrected with a movement to the right bin, the recount matches, and the count is closed without a write-off.

• Cycle Counts Pending Review — Counts with large variances waiting for the Inventory Manager, with book and counted quantities.
• My Cycle Counts — The signed-in operator’s assigned counts by zone and date.

• Cycle count to adjustment: Count, post or review, and close.

Plan the rollout with your warehouse leads.