Warehouse & Inventory · SOP

Inventory Cycle Count Procedure

Maintain accurate inventory records through systematic daily cycle counting. This procedure covers preparation, execution, reconciliation, and reporting for all inventoried SKUs.

Estimated Time

90 min

Difficulty

Intermediate

Regulation

SupplyChain 101

Version

1.0

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Purpose

To establish a consistent, repeatable process for cycle counting inventory in a warehouse environment. Cycle counting reduces reliance on full physical inventories, improves inventory accuracy, and identifies systemic issues (mis‑picks, damage, data‑entry errors) in real time. Accurate on‑hand quantities support lean replenishment, prevent stockouts, and minimise carrying costs.

Scope

This procedure applies to all inventory locations within the warehouse — raw materials, WIP, finished goods, and consumables. It covers daily cycle counts scheduled by ABC classification, zone walk‑downs, barcode scanning, discrepancy handling, and system updates. Out of scope: yearly physical inventory, customer returns processing, and hazardous material counting (see separate SOP).

Safety Precautions

PPEWear hi‑visibility vest, steel‑toe boots, cut‑resistant gloves. Use hard hat when accessing top rack levels.
MOBIKeep mobile device/tablet in one hand, maintain three points of contact on ladders or order pickers. Never count while operating equipment.
LOTODo not enter automated storage lanes while machinery is active. Lockout/tagout zones before entering close‑aisle systems.
ERGOUse pallet jacks or forklifts to access heavy pallets. Do not climb racks or reach beyond safe working height.

Required Tools & Materials

Handheld barcode scanner or mobile device with WMS (Warehouse Management System) app
Cycle count worksheet / digital checklist (printed or loaded into the device)
PPE as listed in Safety Precautions
Pallet jack, forklift, or order picker for high or heavy locations
Stretch wrap dispenser and tape (for re‑wrapping broken pallets)

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Procedure: Step-by-Step

1 Review daily cycle count schedule — Pull the count queue from the WMS. Priorities: A‑class SKUs counted every 10 business days, B‑class monthly, C‑class quarterly. Print or load the list per zone.

2 Prepare the zone — Walk the assigned zone. Ensure all bins are clearly labelled, aisles are clear, and pallets are stable. Block off any aisles scheduled for deep cleaning or maintenance.

3 Don PPE & verify equipment — Put on safety vest, boots, gloves. Inspect pallet jack or forklift if needed. Check that handheld scanner is charged and communicating with the WMS.

4 Locate and count each SKU — Scan bin location barcode, then SKU barcode. Count all units inside the bin. Record quantity on device or paper sheet. If count is zero, scan the bin as empty. Take a photo if condition is questionable (damage, expired).

5 Flag discrepancies — Compare counted quantity to system on‑hand. For variance >2% or >3 units (whichever is greater), initiate a recount. If recount confirms variance, assign a reason code (e.g., miscount, damage, mis‑pick, data entry). Do not adjust yet.

6 Approve adjustments — Supervisor or designated lead reviews flagged variances. Once approved, enter adjustment transaction in the WMS with the root‑cause code. Update on‑hand quantity.

7 Complete zone and sign off — Finalise the count cycle in the WMS. Print end‑of‑day report listing all counted SKUs, variances, and adjustments. Store report in the cycle count log file. Discuss repeated issue patterns at next team stand‑up.

Inventory Cycle Count Procedure

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