An organization with a warehouse will have to count its inventory at least once a year. The physical stock must be matched with the recorded stock in their systems. This process is required primarily for financial and tax reporting purposes. At the end of a fiscal year, an organization should have accurate figures to report the correct assets on the balance sheet and to identify and correct issues such as shrinkage, damage, or misplacements.
Advanced Warehouse Management offers the following options to support this process:
• Cycle counting
• Spot counting
I will be publishing two blogs on the counting processes in Dynamics. The first blog will focus on cycle counting. The second will deal with spot counting.
What is spot cycle counting? Spot cycle counting is an inventory auditing method where a small, specific portion of inventory is counted on the spot—usually without a predetermined schedule—to verify accuracy or investigate discrepancies. Unlike regular cycle counting, spot counts are often triggered by events such as stock variances or quality checks, and are used to quickly validate inventory levels without performing a full count.
What are the benefits for a company?
• Quick error detection and correction Spot cycle counting helps identify and correct inventory discrepancies in real-time, reducing the risk of larger errors accumulating over time.
• Minimal disruption to operations Since it focuses on a small portion of inventory, spot cycle counting can be done quickly and without the need to pause or shut down regular warehouse operations.
Configuration
1. A cycle count work class.
2. An inventory adjustment type: This setting determines which journal is used to post the counting differences.
3. A default adjustment type and a default cycle count work class must be configured. Optionally, a priority could be set as well. The journal type is used for posting the counting differences, and the work class is used to create the cycle count work.
4. The ‘Cycle counting supervisor’ parameter has to be validated for the user. This parameter determines whether counting results need to be approved in the event of a discrepancy.
5. A mobile device menu item has to be configured to execute the spot cycle count.
6. Through the ‘Cycle counting’ menu item, additional parameters can be configured, such as the number of attempts allowed in case of a counting difference and whether or not the warehouse worker could change the counting reason code.
7. The mobile device menu items must be linked to a mobile device menu.
Demonstration
1. An item with a physical inventory of 92 in warehouse WH LT.
2. The warehouse worker opens the ‘Inventory’ menu item and then selects the ‘Counting’ menu item.
3. The warehouse worker clicks on the ‘Spot cycle counting’ menu item.
4. The warehouse worker scans the location and clicks on the confirm button
5. The warehouse worker scans the bar code of the item and clicks on the confirm button
6. The warehouse worker scans the license plate
7. The warehouse worker needs to enter the counted quantity, for example 100
8. The warehouse app asks whether the counting is complete. If not, the worker can add another item or license plate. If so, the worker can click on the confirm button.
9. Due the counting difference, the spot cycle count work isn’t completed yet. The spot cycle count work first needs to be reviewed by a supervisor.
10. The supervisor needs to review the counting result and should accept or reject the count. When the supervisor clicks on ‘Accept count’, the inventory will be updated from 92 to 100. When the supervisor clicks on ‘Reject count’, the cycle count work remains open and the warehouse worker has to count the inventory again. For this demonstration the supervisor clicks on ‘Accept count’.
11. The status is now updated and a journal has been posted.
12. The physical inventory being updated to 100.
13. The counting history being updated.
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