Why cycle counting beats wall-to-wall
Annual physical inventories disrupt operations, require overtime, and catch errors months after they occurred. Cycle counting spreads counting throughout the year, catching discrepancies while root causes are fresh. A location counted today can be investigated tomorrow—not six months later when no one remembers what happened. Teams that cycle count maintain 99%+ accuracy without ever shutting down for a full wall-to-wall count.
Count frequency strategies
**ABC velocity counting** counts A items monthly, B items quarterly, C items annually. **Random sampling** counts a percentage of locations daily regardless of velocity. **Trigger-based counting** initiates counts when the WMS detects anomalies (zero quantity, negative adjustment, pick discrepancy). Most warehouses combine all three: trigger counts catch immediate issues, velocity-based counts maintain accuracy for important items, and random counts provide statistical coverage.
Variance investigation process
Every variance deserves investigation before adjustment. Step 1: Verify the count was performed correctly (recount if needed). Step 2: Check recent transactions—was there an uncompleted move or pick? Step 3: Search nearby locations for misplaced inventory. Step 4: Review camera footage if available. Step 5: Document root cause or mark as 'unexplained.' Step 6: Approve or reject adjustment with audit trail. Never adjust quantities without investigation—it hides systemic problems.
Counter training and tools
Counters need training on proper procedures: scan location first, count each item type, enter quantity, confirm or investigate discrepancy. Use blind counts (counters don't see expected quantity) to prevent confirmation bias. Equip counters with mobile devices that enforce the scan-count-confirm workflow. Schedule counts during slow periods when counters aren't rushing. Rotate counters to prevent the same person always counting the same areas.
KPIs and reporting
Track these metrics: **Location accuracy** (percentage of counts matching WMS). **Dollar accuracy** (variance value as percentage of inventory value). **Count completion rate** (scheduled counts completed on time). **Variance by root cause** (mispick, receiving error, theft, etc.). Report weekly to operations leadership. Set targets: 99.5% location accuracy, 99.9% dollar accuracy. Investigate patterns—if the same location or product repeatedly shows variance, there's a process problem.