Cycle counting: count a little, all year

The annual stock count has a certain cult following. The shop closes, everyone brings a clipboard, someone orders pizza, and for a weekend the whole place feels like a very dull heist. By Monday the numbers are fixed, and by March they have drifted again.

There is a gentler way. Cycle counting means counting a few items every week, so that over the year you count everything, and the important things you count several times.

Why little and often works

Errors pile up the longer you leave them. A mistake in January is easy to trace, since the receipts and picks are fresh in everyone's mind. By December, you can only guess. Counting a slice at a time keeps the gap between 'the system says' and 'the shelf says' small.

It also spreads the work. Twenty items on a Tuesday morning is a coffee-break job. Nobody has to shut the doors.

Not everything gets counted equally

This is where the A, B and C groups come in. An expensive, fast-moving item deserves more attention than a box of rubber bands. So you count A items often, B items less often, and C items rarely.

Count the things that matter often, and the things that do not matter rarely.

How to start

1. Group your items by stock value into A, B and C (see The 80/20 rule that quietly runs your shop).
2. Record the date each item was last counted.
3. Each week, count whatever is past its interval, starting with the A items.
4. Investigate every difference while the history is fresh.
5. Adjust the intervals if A items keep matching and C items keep surprising you.

Do not skip the investigation. A count that finds a difference and moves on has fixed a number. A count that finds a difference and asks why has fixed a process.

When it does not fit

Cycle counting suits a shop that keeps trading all year. It does not replace a full count if your accountant needs a year-end total on a specific date. Some businesses do both: cycle count through the year, then a lighter full count to confirm.

A sample week

Say you have 300 items. Thirty are A, about a hundred are B, and the rest are C. Counting A every 14 days means roughly two or three A items a day. B every 30 days is about three a day. C every 90 days is about two a day.

That is under ten items a day in total, a task for twenty minutes with a coffee, and across a year you will have counted every A item about twenty-six times, every B item about twelve and every C item four. A single annual count would have given you one.

The arithmetic is also the argument. Ten items a day is a habit people keep. A full weekend count is an ordeal that gets postponed, and a postponed count is a count that does not happen.