Cycle Counting

SOP for cycle counting part inventory

Manufacturing operations cause incongruencies in inventory counts. In order to have an accurate count of your inventory you need to get on the floor, Gemba, cycle count, and adjust inventory so that the physical matches the digital. We recognize that cycle counting is always a big lift, so we are here to provide ion-related guidance on how to get your part inventory data out quickly so you can get to counting parts.

Two types of cycle counting:

There are two main types of cycle counts part-based and location-based. Both methods aim to maintain accurate inventory records, but they differ in their approach, focusing either on specific locations or specific parts.

Location-Based Cycle Counting: This is a method of inventory auditing where specific storage locations within a warehouse or storage facility are selected for counting at regular intervals. The focus is on verifying the accuracy of inventory at particular locations, regardless of the parts or products stored there.

Part-Based Cycle Counting: This inventory auditing approach targets specific parts or items, regardless of their storage location. Parts are selected for counting based on certain criteria such as value, movement frequency, or historical accuracy. The aim is to ensure the accuracy of inventory records for specific items across all locations.

Location-Based Cycle Counting:

The main requirements for conducting a successful location-based cycle count are:

  1. Creating a cycle counting schedule

  2. Having a trained cycle count staff

  3. Generating your cycle count sheets

  4. Time to close off the location from inventory changes

Creating a cycle count schedule:

Establishing a regular schedule for cycle counting brings organization and consistency to your inventory management efforts. By planning in advance, you can strategically target crucial storage areas, ensuring that high-value items or frequently accessed locations are counted regularly. Base your schedule on two key attributes: the consumption rate of the inventory and the value of the parts in each location. This approach enables you to develop a tailored count cadence that aligns with your operational needs.

An illustrative schedule provided below includes a column to automatically calculate the next cycle count date for each location, factoring in both the count cadence and the most recent cycle count date. Adopting this systematic approach not only helps manage workload throughout the year, preventing the last-minute scramble often associated with year-end counts but also serves as a tangible record of your commitment to best practices in inventory management. This documentation is invaluable, demonstrating your proactive and disciplined approach to ensuring inventory accuracy and integrity.

Training your staff on cycle counting:

Good cycle counting is crucial for managing inventory, and all staff need clear and complete training to do it well. Training should cover both the ideas behind cycle counting and how to do it in practice, making sure everyone understands its importance and pays close attention to the details. Using hands-on exercises and real examples can help staff get ready to handle common issues.

Make sure your team knows how important their role is in keeping inventory records accurate and supporting the whole business. Keep their skills sharp with regular updates and refresher training, ensuring they always know the best way to help with inventory management.

Generating your cycle count sheets:

To conduct an accurate cycle count, you'll need access to the specific part inventory data for the location you're working on. We suggest using our API to create a pick sheet that will help you in this process. If you’re not yet familiar with how our API works, please visit our API information page, where you can learn more and generate your API keys if needed.

You can use the following Python script, linked here, to input the cycle count location of your choice. This will generate a .csv file listing all the inventory in that location, excluding any items that are currently installed. The file will include columns for 'part number,' 'revision,' 'total quantity,' and 'floor count.' Use the 'floor count' column to record the actual quantities you observe on site. You can record these quantities directly in the .csv file or print the sheet for manual recording. To ensure an unbiased count, we suggest hiding the 'total quantity' column during the counting process. With your count sheets prepared, you’re ready to start the cycle counting.

Closing off a location for cycle counting:

Closing off a location for cycle counting involves temporarily restricting access to and movement of inventory within the specified area, ensuring that the count is as accurate as possible. Start by informing all relevant personnel about the cycle counting schedule and the areas affected, and then physically or systematically secure the location to prevent any inventory adjustments during the count. This may involve placing signage, locking entry points, or using your inventory management system to restrict transactions. Closing off the location is crucial as it eliminates the possibility of discrepancies caused by incoming or outgoing inventory, ensuring that the physical count truly reflects the current state of inventory. This practice ultimately supports inventory accuracy, better informs decision-making, and maintains the integrity of the inventory management system.

Adjusting inventory after a cycle count:

Adjusting inventory is the most important step in the process. You must now make the physical match the digital through manual adjustment. Here is our recommendation for how to do this in ion.

  1. Keep the inventory location closed until adjustments are finalized

  2. Use the count sheet to make the digital inventory and physical inventory match as closely as possible

    Observed Discrepancy:

    Potential Causes:


    Digital > physical

    • Parts are not being consumed onto aBOM’s

    • part status is incorrect (installed, on_order, unavailable)

    • parts scanned to location accidentally

    • parts were not moved correctly


    1. making sure all higher level assemblies are consumed

    2. move MRB parts to correct location

    3. LAST RESORT: move extra parts to a cycle count discrepancy location

    Digital < physical

    • parts were not put into kits correctly

    • parts are in a status that makes them unavailable for use

    • parts were moved physically but not digitally


    1. Find part inventories at MRB locations and move them to the lineside location

    2. Return excess parts to inventory

  3. Record major discrepancies

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