This is perceived as being more efficient from a supply chain management perspective by concentrating effort on higher volume of use items.
[1] The main shortcoming is that low value items may be ignored and cause an entire assembly line to halt while a minor component is re-ordered.
This method conducts inventory checks at key points in the material management process.
This method uses statistical process control to audit items with the highest chance of inventory inaccuracy.
The basic process of cycle counting is generate list, audit, review, repeat.
These systems may include mobile computers with integrated barcode scanners that allow the operator to automatically identify items, and enter inventory counts via keypad.
The software transmits data to a database on a host system which can generate inventory reports.
Based on user defined criteria, the software will select a number of items to count at specific locations for the specified period of time.
Ideally, these selections are daily but many companies choose to generate cycle count items weekly.
Cycle counts should only be conducted by trained and tested personnel to reduce the risks of inventory loss.