Written by Jeff Loomis, Director of Business Development at InTempo | firstname.lastname@example.org
Do you ever wonder how big box stores keep inventory? Well, let’s start with the wrong answer: Once a year, they shut down for a week and hire 1,000 temporary workers to count everything in the store at one time. Okay, so here’s the right answer: They do cycle counts, over and over and over again without fail. Cycle counts are the process of regularly and continuously validating the accuracy of your inventory on a daily, weekly, or monthly basis. Each piece of equipment and related parts are counted several times a year.
Many rental businesses take annual physical counts over cycle counts. It may seem easier to take inventory once at the end of year. However, there are three major advantages that come with doing cycle counts.
By counting what’s on the bin, shelf, or rack on a regular basis, you’ll be able to keep the inventory in your rental system accurate. Your salespeople - and your entire business for that matter - rely on the accuracy of this information. Furthermore, if you lose parts that you don’t track on work orders, then you won’t have a true picture of the ROI of your equipment. This can lead to sub-optimal decision-making around purchasing and disposal.
If you’re missing quantities or counts, those will be identified faster and you can uncover potential problems throughout the year. If you only count inventory once per year, and you’ve lost parts, it can add up over time and amount to a significant expense. For rental companies, this means you may end up taking a big hit at the end of the year.
If you commit to spending 15-20 minutes a day to find 10 items, you don’t have to take your inventory at the end of the year. With cycle counts, you don’t have to shut down the business to count inventory or distract from regular operations. You can also avoid the expense and aggravation that comes with uncovering major problems that went unnoticed for months.
(Side note: min/max order alerts are another time-saving strategy for managing your inventory. Set your optimal stock level for a specific part, then get a report when a part drops below that level. You can easily re-order before you're fully out of stock, but without accumulating extra inventory that you don't actually need.)
In short, cycle counts make it more simple and manageable to take inventory. Both of InTempo’s rental software solutions, InTempo Core and InTempo Enterprise, make it easy to perform cycle counts. You don't have to put your whole rental business on hold to take cycle counts; the software allows transactions to continue even when counts are in process. You can also print cycle count sheets that make the job easier. Cycle counts are less overwhelming, less cumbersome, less risky and more accurate than relying solely on an annual inventory.