Cycle Count
Cycle counting is an easy to use method allowing for high risk items to be more closely monitored than
those either not as easily lost or of a lower value. In addition, inventory levels of items are monitored at a
higher and more reliable rate than other options allowing for problems to be identified in a timely manner.
Oracle Inventory Cycle Counting is another way to audit the inventory success and catch the trouble
spots that cause Inventory Shrink
Cycle counting is the periodic counting of individual items throughout the course of the year to ensure the
accuracy of inventory quantities and values. Accurate system on-hand quantities are essential for
managing supply and demand, maintaining high service levels, and planning production.
Understanding Cycle count
• Oracle provides ABC analysis and “minimum per year” cycle counts based on the ABC value
• the key here is “minimum per year” counts. The algorithm may cause an item to be counted more
than the number of counts required per year
• Because the cycle count process is random, you may NOT get an evenly spaced occurrence of
counts
• You have no access to see when an item will be counted during the year
• If a 4 count a year item is added during the middle of the year, it will still get counted at least 4 times
that year
• You can defeat the “randomness” by using manual Cycle Counts for every item but then you are
missing the point of Cycle Counting
• Cycle counting is a measure of your inventory accuracy . If you manipulate the process and remove
the randomness, you will manipulate the accuracy
• You may not want to display system quantity, it could influence a count entry
Some Insights on Cycle Count Formula:
The first criterion of selecting the items to schedule, is whether these items are marked as a control
group items or not and what is the criterion on which the Cycle count scheduler is being run (Include
Control Group Items is checked or not). Based on this the scheduler will select the Control Group Items or
Non Control Group Items to schedule counts.
The second criterion is Max items to Schedule, which is defined as:
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MaxItemsToSchedule = (TotalItemsInClass * NWorkingDays) /ClassCountInterval + 1;
TotalItemsInClass = the number of items defined in the class
NWorkingDays = BeginDate - EndDate + 1 (this will be printed in the concurrent log file of the
scheduler).
ClassCountInterval = NumWorkDaysThisYear / NumCountsPerYear (these will also be
printed in the concurrent log file of the scheduler).
Once MaxItemsToSchedule is calculated, these numbers of items are picked randomly and
will get scheduled and will be marked, so that these not picked in the scheduled run.
Now let’s consider the following possible cases:
CASE 1
No. of items in class = 100
Counts per year for class = 1
No. of working days in the year = 200 (taken, for easy calculation)
Count Frequency = Daily
Now since the count frequency is 'Daily' you can run the scheduler on every working day.
Using the above formula, Maximum Items to schedule = ((100*1*1)/200)+1 = 0+1 = 1 The
above formula has integer division and so instead of 0.5+1 we have 0+1.
So, in this case all the 100 items in the class will be counted twice in a year. But, now if you
change the count frequency from 'Daily' to 'Weekly' as shown in Case 2.
CASE 2
No. of items in class = 100
Counts per year for class = 1
No. of working days in the year = 200 (taken, for easy calculation)
Count Frequency = Weekly (say 5 work days in a week)
Maximum Items to schedule = ((100*1*5)/200)+1 = 3
Here, all the 100 items will be counted at least once, but some of the items may be counted
twice since in our formula we are doing the ROUNDING off. In this case 80 items were
counted only once and 20 items got counted twice.
If we do not do the rounding off (using integer division and adding 1), then in the above case
we will have 2.5 items to schedule. Now, we can schedule either 2 or 3 items. So, if we
schedule 2 items then all the 100 items will not be scheduled at least once (20 items will be
left out). So we do the rounding off so that all the items are scheduled at least once.
You can see that by changing the count frequency from 'Daily' to 'Weekly' the number of
items that are getting counted twice have been reduced from 100 as in Case 1, to 20 in Case
2. Since we are doing 'Rounding off' in the formula, some items of the class may be counted
more than the number of counts specified. But, as I have mentioned before, Counts per year
is the minimum guaranteed number of counts per year for all items in the class.
In cases where you have very few items and count frequency is 'Daily', the magnitude of the
difference between 'actual number of counts' and 'counts per year specified' will be much
higher. In these cases, by changing the count frequency from 'Daily' to 'weekly/period', will
reduce the magnitude of difference. Also, we allow the user to change the 'Counts per year'
at any point in time in the year. So, once this value is changed then all the items in the class
are scheduled afresh,
irrespective of their scheduling before the change of value for counts per year.
The logic for Cycle counting is forward looking.
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The counts per year for a class ensures that all items in that class are scheduled at least that
many items in a year. That is, if the count per year for a class is 10 and the class has 100
items, then each of the 100 items in the class is scheduled at least 10 times.
In cases where you have very few items in the class and have high count frequency (say
Daily), there are chances that it will be counted more number of times, then specified in its
class. However, in those cases you would ideally like to reduce the count frequency (say,
from 'daily' to 'weekly').
The counts per year for a class can be changed by the user at a later point in time. Cycle
counting does not take into account the number of counts that have already been done
before the change of value for 'counts per year'. It now takes into account the new value of
'counts per year' for all the items in the class
Prerequisites
1. Define Item Attributes
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Inventory Tab
o inventory item = YES
o stockable
o Cycle Count Enabled
Unit Cost (If ABC compile is by value)
o Tools > Item Costs (Organization cost method is Standard)
o Average Cost Update window (Organization cost method is Average)
2. Define ABC Group (Optional)
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Compile ABC
o ABC Codes > ABC compiles
o Content Scope: Items included at organization level or subinventory level
o Valuation Scope: The ranking of items at what level
o Select the Criterion for ranking the items
o Compile: Run “Compile ABC analysis” request
Define ABC classes
o ABC Codes > ABC Classes
o Priority Field: The class with the lowest number has the highest rank
Define ABC group
o ABC > ABC Assignment Groups
o Enter a group name and select the compile name
o Group Classes > Select the predefined classes
o Assign Items > Define the cutoff point for each class
o
Assign
Run ”Define ABC assignments” request
Steps to Cycle Counting
1. Define a Cycle Count
Counting > Cycle Counting > Cycle Counts > New
a. Scope and Control
 Late Days: Numbers of days can pass before a scheduled count becomes a
late count.
Note There is no restriction after late days so you can enter or update late
count entries that are past the count due date
 Sequence number: is the starting number in the next count request
generator.
 Unscheduled Entries: whether you can enter counts for items not scheduled
to be counted
 Determine whether to display system on-hand quantities during count entry.
 Automatic Recounts: automatically assigns a status of Recount to out-oftolerance counts and includes them in the next cycle count listing.
 Select the Maximum number of times to generate an automatic recount
request.
b. Serial and Schedule Tab
 Count options:
o Not Allowed: exclude serialized items
o One per Request: one count request for each serial number
o Multi Per Request: one count request for serial numbers for the same item
 Details options ( Take effect if you choose Multi per request)
o Quantity and Serial Numbers: Serial number and quantity are required and are
o Quantity Only: Serial number entry is optional if the count quantity matches
the system quantity.
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adjustment option:
o
Adjust if Possible: If a discrepancy exists between the count quantity and
system quantity then the system will attempt to make adjustments if the
adjustment variance and value are within tolerances.
o
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Review All Adjustments: No automatic adjustments are attempted.
Discrepancy option: to indicate whether an adjustment is attempted when a count
includes a serial number already assigned to the same item elsewhere in the system.
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Auto Schedule
o
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Check it if you want to generate automatic cycle counts
Frequency: Daily, Weekly, Period
Note if you select for example daily you can see only the generated count requests
for that day
o
Count Zero Quantity: whether to count items with zero system quantity
c. Adjustment and ABC Tab
 Set Approval options and tolerances at Cycle count level
 Enter ABC group (Optional)
o Reinitialize: Delete all previous information and set only ABC group
classes and items
o Update: Add the new ABC group information
Note If Update is selected it allows you to update classes or delete unused
items
o Save, to Run “Initialize cycle count items” Request
d. Classes
 Define cycle count classes
 The Minimum Count requests generated per year
 Define the Tolerances at Class level
e. Items
 Enter or Update items manually
 Define Tolerances at cycle count Items level
 Control Group Items: You can decide whether to include them in Auto scheduling.
2. Scheduling Count Requests
a. Automatically:
 Cycle Count Summery >Tools > Cycle Count Scheduler
 Decide if you want to include Control Group items
 System cannot run this request if you did not check Auto Schedule while defining
the Cycle count
b. Manually:
 Counting > Cycle Counting > Manual Request
 enter the item then specify the needed information, Schedule a date
c. Physical Location Scheduling:
 Counting > Cycle Counting > Manual Request
 Enter the Subinventory or Subinventory and Locator combination only
3. Generating Count Requests
a. Automatically:
 Cycle Count Summery >Tools > Generate Count Requests
 Count requests will be generated for both automatically and manually scheduled
Counts
b. Manually:
 Counting > Cycle Counting > Manual Count Entries
 If you did not check Unscheduled Entries while defining the Cycle count; then you
cannot enter counts manually
4. Cycle Count Entries
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Cycle Counts Summary > Counts
In Quantity Field Enter the Counted Quantity
The Adjustment Tab will show the On-hand System Quantity
Cannot navigate to the Adjustment tab if you did not check System Quantity while defining
the Cycle count
5. Approval and Adjustments
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Cycle Count Summary > Approvals
Approval Action:
o None: the quantity is out of tolerance and the Recount option in the Cycle count is
Unchecked
o Approved: the quantities are the same or within tolerance
o Rejected: can be only manually checked
o Recount: the quantity is out of tolerance and the Recount option in the Cycle count
is Checked
Note the Approval action cannot be changed unless it’s “None”.
Adjustment tab shows the system quantity and the variance
Count tab shows the counted quantity
Count History: shows the Quantities and Variances for the First, Previous and Recent Counts