How Should You Calculate Your Cycle Counts?
Faith Kubicki
Cycle counts make it easier to track your inventory levels without having to spend an entire day or week counting everything in your warehouse(s) and rental yard(s). It's a more manageable process for your team, and it lets you maintain your inventory on an ongoing basis - which helps you identify potential errors before they become a major problem.
When you first get started, you need to determine the length of a complete cycle. (In other words - how long will it take you to count items A, B, C, and D before going back to A). Too long, and discrepancies can go unnoticed. Too short, and your team will have a hard time keeping up with the workload. So: what’s the optimal approach?
Here’s a quick calculation method from InTempo's Customer Care team:
- First, figure out how long you want your team to spend counting. Is an hour a day too much time to take away from everything else on their to-do list? What about an hour a week?
- From there, run a test count. Ask your team to see how many items they can count in your desired block of time.
- Next, calculate the total number of items in your inventory. You’ll likely want to take separate totals for parts, merchandise, and equipment, as most cycle count software lets you count each of these categories as a separate process.
- Divide your total number of parts, merchandise, or rental assets by the number of items your team was able to complete during your test count. This will be your cycle count duration.
As an example:
Let’s say you have 1,000 parts in your current inventory, and your team has the time to count 20 parts per day. 1000 divided by 20 = 50; it’ll take your team 50 cycle days to count all of your parts. That means that you can count each part approximately 5 times per year if you do not count on weekends or holidays.
Once you've got this information set up in your rental inventory software, you can assign different categories and classes of inventory to each day of the cycle. On InTempo, you can automatically print each day's count sheets so you don't have to track the process manually; it's much simpler and you're less likely to accidentally skip a step. Your teams will count the items on the day's count sheet, update the quantities they currently have on hand, and resolve any discrepancies.
Get Started with Cycle Counts
Interested in using cycle counts for your rental business? We’d be happy to help.
If you’re an existing customer, let Customer Care know that you’d like some help setting up your cycle counts. If you aren't currently using InTempo, contact our team and we'd be happy to walk you through everything you can do in our rental software.
