Documentation >
MAC-PAC Reference Library >
Manufacturing >
Inventory Control >
Key Concepts and Procedures >
Cycle Counting
Cycle Counting
MAC-PAC supports two methods of tracing inventory: cycle counting and conducting a physical inventory.
At least yearly, companies must perform a physical inventory in which they count every part stored in every stock location. This costly and laborious procedure adds no value to the parts and may take up to five days to complete. To conduct a physical inventory, the company must cease production, shipping, and receiving.
Rather than perform a physical inventory, a company could cycle count. During cycle counting, a subset of the company's parts is counted daily, allowing the company to receive an accurate picture of its inventory every 1-3 months. Cycle counting schedules inventory so that a company's most valuable items are counted more often than its low-value items. Inventory Control can classify parts by value automatically (based on their lead time, unit cost, inventory value, percentage of total inventory, activity amount, or percentage of activity.)
Once all inventory is classified, Inventory Control creates a schedule that specifies which parts should be counted and when they should be counted. It produces a report that can be used to fill in the counted quantity for each item. Differences between inventory counts and system balances are resolved through cycle count adjustments to the system balances.
Related