Cycle Counting Method of Physical Inventory
Cycle counting is a method of physical inventory whereby inventory is counted at regular intervals within a fiscal year. These intervals depend on the cycle counting indicator set for the material.
Cycle Counting allows you to count fast-moving items more frequently than slow-moving items, for example.
Mark all materials that are to be included in cycle counting with a cycle counting indicator in the material master record (storage data). The cycle counting indicator is used to group the materials together into various cycle counting categories (for example, A, B, C, and D). In Customizing for Inventory Management, you can define for each category the time intervals at which the materials are to be counted.
You can use the program ABC Cycle Counting Analysis (RMCBIN00) to perform an analysis. In this analysis, the system assigns the materials to the individual categories according to consumption or requirements. You can also specify whether this analysis is to consider only the materials with cycle counting indicator or all materials. The cycle counting indicator in the material master records can be updated automatically by this program.
For the planning of cycle counting, run the program Create physical inventory documents for cycle counting (RM07ICN1). This program checks all cycle counting materials to determine whether a physical inventory is due to be carried out.
For more information on programs used for cycle counting, see the relevant report documentation.
You can create physical inventory documents for the following stock types, as well as unrestricted-use stock (stock type 1):
- quality inspection stock
- blocked stock
The system calculates the planned count date for all stock types as folllows:
Date of last physical inventory of unrestricted-use stock + predefined interval
If a material needs to be counted, use the program to create a batch input session for creating physical inventory documents. To create the physical inventory documents, process the batch input session .
When the inventory differences are posted, the actual count date is recorded in the physical inventory data of the material as the date of the last physical inventory.
Marking Materials for Cycle Counting
This step is only required if you perform cycle counting for the first time or if you want to update the cycle counting indicators.
In the material master record (storage data), maintain the cycle counting indicator for all the materials that are to be included in cycle counting.
You can set the indicator in one of the following two ways:
- manually in the material master record. To do this, choose Material ® Change from the Material Master menu.
- automatically using ABC analysis To do this, choose Special procedures ® Cycle counting ® Set CC indicator from the Physical Inventory menu.
Creating Physical Inventory Documents for Cycle Counting