Real-time inventory data are also necessary for the effective functioning of programs like Lean Distribution or Just-in-Time Inventories and for meeting ever-mounting demands to ship product faster.
"It all puts a premium on inventory accuracy and inventory control practices," says Mark Wheeler, director of supply chain solutions for the mobile technology company Zebra Technologies.
Killing the Annual Physical Inventory
- It's time to let the technology work for you.
A study by Motorola (now part of Zebra Technologies), Warehouse of the Future, showed that 41 percent of warehouses use manual cycle counting to keep track of inventory levels. But that method can be slow, labor-intensive, and inaccurate.
For many companies, cycle counting has replaced the traditional physical inventory count, which involves shutting down a facility or bringing people in during off hours to conduct a count. Although physical inventory counts are still favored by some auditors, they are tedious, time-consuming, labor-intensive, and inevitably inaccurate.
By contrast, cycle counting involves validating inventory accuracy on a continual basis, by counting a portion of the inventory at regular intervals. Cycle counts typically entail recording the type of product, the location of the product, and the quantity. They can also be expanded to include information like expiration dates, serial numbers, and lot numbers. - This becomes more important as lot and serial number control become the standard as Track and Trace takes hold.
Generally, it makes sense to count faster-moving and/or more valuable items more frequently.
To determine the optimal frequency for the counts and keep the database updated, most organizations rely on sophisticated software like the NDS-Nx system.
So assuming we want to move towards a cycle count model, what are some of the options and benefits?
Inventory information can be updated in real time. When cycle counts are performed manually with paper, the information is updated in the system in batches. Any inaccuracies that you may find are after the fact. Mobile technology, however, allows inventory information to be updated immediately, enabling operations to be adjusted accordingly. With mobile technology, you can make corrections right there at the time of picking so operations can continue with an understanding of what is happening in real time.
Counts can be made "opportunistically." While a "true cycle count" occurs when a worker is specifically tasked with counting all of the items in a specified zone, row or product line, mobile technology also enables counts to be made "opportunistically"—which occurs when an associate is asked to confirm how much inventory is left at a location where he or she is already working, A common example is a "zero confirmation," which occurs when the system shows an order picker has picked the last item in a location and asks the picker for a simple yes or no confirmation. While opportunistic counts don't eliminate the need for other kinds of cycle counting, they do reduce overhead and improve asset utilization by allowing workers to conduct counts on the spot instead of making a separate trip. However,remember that these types of counts should only be conducted for "low threshold counts," for example two items or fewer. "You don't want the order picker counting 50 items, that would only slow him or her down".
As for what technology to use for cycle counting, all of the mobile devices currently employed in the warehouse—handhelds, wearables, and tablets—can be pressed into service, with each having its strengths and weaknesses.
- Handheld devices: Mobile computers with bar-code scanning capabilities allow the user to scan bar codes for both the location and item, and then key in the count. The scanning ensures that the worker is counting the right item at the right location.
- Wearables: Scanners that are worn on the wrist or finger (as opposed to being carried) also work well for cycle counting. Among other advantages, you never have to set the device down, and you can reach into a location or slot to move items around while you count. Remember that wearables tend to have a small display, limiting the amount of information you can see. But doesn't have to be an insurmountable obstacle: a wearable can always be connected by a tether to a handheld or by Bluetooth to a handheld or tablet device, he says.
- Tablets: Recent advances in industrial tablets—especially with regard to their scanning capabilities—have made them much more suitable for cycle counting than they've been in the past. The advantage of a tablet is it has a bigger screen so it displays more information, And if you want to look something up or check something in another program, it's easier to toggle between cycle counting and other software on a tablet than on a scanner or handheld. Additionally truck mounted or forklift mounted models allow for less breakage as they cannot be dropped and can be positioned for the greatest scanning range since they are at a fixed height and typically most shelves would also be. Tablets are also especially well suited to conducting research associated with problem resolution, as they can quickly send requests and lookup information in the MDS-Nx system to help determine the root cause of errors.
It doesn't matter what the technology may be, If people don't take ownership and understand the impact of inventory accuracy on the business and how it affects them, they won't get it right.
For more information on TSH or MDS call The Systems House, Inc. at 1-800- MDS-5556. Or send a message to firstname.lastname@example.org
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