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What is the difference between Stock Take and Cycle Count in a Warehouse Management System?

WMS Part 9 Back to Basic - Stock take vs Cycle Count

AC2 WAVE Warehouse Management System - Stocktake vs Cycle Count
AC2 WAVE Warehouse Management System - Stocktake vs Cycle Count

Warehouses perform “Stock Take” when they want to count all their inventory stored in the warehouses and compare the physical count result with the records in the warehouse management system (WMS). Cycle count is to physical count specific products, batches, locations or stock conditions (for example high-value items). For example, counting from row 1 to row 2 is a cycle count. The term “wall to wall count” means to count everything in the warehouse, which means “Stocktake”.

Should you halt the operation while doing stocktake or cycle count?

It depends. Short answers: ‘yes’ for stock take, ‘no’ for cycle count.

Most companies conduct a stocktake minimum once a year. It is an activity that could last for a few days for a sizable warehouse. Everything stopped during the stocktake, there should be no inbound activities such as receiving; there should be no outbound activities such as picking.

In general, you can conduct a stocktake using Radio Frequency (RF) handhelds or by using paper. Because it is an activity to count the inventory for the entire warehouse, halting the operation to get an accurate result is a better approach.

A photo of many RF Devices(barcode handheld devices) using AC2 WAVE Warehouse Management System
AC2 Warehouse Management System - RF Devices

On the other hand, you can perform a cycle count at any time during the operational hour. As such, it is not necessary to halt the operation while cycle counting. For example, you might want the warehouse management system to trigger a cycle count task upon a short pick. While usual operational activities are still running in the warehouse, a person is assigned to perform that specific cycle count task - in this case, an investigation of the short-picked location. To do this, all warehouse activities need to be updated in the system in realtime.

Realtime - this is the keyword. If you are not running your warehouse management system in realtime (for example, if you are having a paper-based operation), then you might want to consider partially halting the warehouse operation in those areas that you want to perform the cycle count.

The other difference between cycle count and stocktake is the result posting. After a stocktake, the count result is updated(posting) to a financial system (such as an ERP system or accounting system). For cycle count, the missing inventory is usually sent to a “lost & found” location for further investigation. Many times, the lost inventory is found at another location at a later time. Hence, the result of the cycle count is usually not posted in the financial system.

In addition to the tips outlined in this article, there are many valuable resources available to help you improve your operations. One book we highly recommend is 'Dodge It If You Can' by David Mouland and Aw Yang Uei. This book presents a real-life collection of anecdotal incidents from industry veterans who have built their careers from scratch, providing practical insights into navigating the challenges of business. Whether you're just starting out or looking to take your warehouse management to the next level, 'Dodge It If You Can' is a must-read for anyone interested in improving their business operations.

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