Cycle Counting

Strategy & Process

March 09
Agenda

Purpose

Features & functionality

Business process considerations

Setup & configuration

Process

Special considerations

Summary

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Purpose

High level understanding of how Oracle cycle counting works

Understand business process considerations

How to setup in Oracle apps (11.5.10)

Best way to deploy

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Features & Functionality

Part of Inventory module – One of 3 ways to count
 Physical Inventory
 Replenishment Counting
 Cycle Counting

Automates periodic cycle counting

Identifies criteria for automating

Provides variance reporting

Allows approval control

Supports serial & lot control items

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Features & Functionality (Cont’d)

Allows manual adjustments

Fully integrated with cost accounting methods

Integrated with ABC Analysis
 Required to leverage full functionality of Cycle Counting

Provides ability to classify items into ABC ranks

Flexibility to update & change “on the fly”

Target inventory to count by Subinventory or organization

Facilitate recounts & rejects

Reporting & Analysis of transactions

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Business Process Considerations

What type of business?
 Manufacturing
 Distribution
 Other

What inventory accuracy is important to your company?
 Business critical
 Mildly important
 Not important

What inventory control disciplines are in place?
 World class (>95% inventory accuracy)
 Above 90% accuracy
 Below 90%

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Business Process Considerations (Cont’d)

Logistics - Method currently in place
 RF bar codes enabled
 Bar code only
 Written

Logistics - Timing of cut-off
 Multiple shifts
 Resources available
 Data entry
 Approval

Management Reporting Requirements
 External audit requirements
 Variance reports
 Internal audit requirements

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Setup & Configuration

ABC Analysis – First Hurdle
 ABC’s of ABC’s
 ABC Classes
 ABC Compile
 ABC Assignment Groups

Cycle Counting – 2nd Hurdle

 Cycle Count
 Attach ABC Group
 Load ABC Items

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Setup & Configuration (Cont’d)

ABC’s of ABC’s

The ABC classification process is an analysis of a range

of items, such as finished products or customers
into three categories:
A - outstandingly important
B - of average importance
C - relatively unimportant
as a basis for a control scheme. Each category can
and sometimes should be handled in a different
way, with more attention being devoted to
category A, less to B, and less to C.

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Setup & Configuration (Cont’d)

ABC Classes

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Setup & Configuration (Cont’d)

ABC Compile

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Setup & Configuration (Cont’d)

ABC Compile Criterion
 Current on-hand quantity
 Current on-hand value
 Historical usage value
 Historical usage quantity
 Historical number of transactions
 Forecasted usage value
 Forecasted usage quantity
 Previous cycle count adjustment quantity
 Previous cycle count adjustment value
 MRP demand usage quantity
 Use the MRP demand usage quantity
 MRP demand usage value

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Setup & Configuration (Cont’d)

ABC Assignment Groups

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Setup & Configuration (Cont’d)

ABC Assignment Groups (Cont’d)

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Setup & Configuration (Cont’d)

ABC Assignment Groups (Cont’d)

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Setup & Configuration (Cont’d)

Cycle Count

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Setup & Configuration (Cont’d)

Cycle Count (Cont’d)

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Setup & Configuration (Cont’d)

Cycle Count (Cont’d)

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Setup & Configuration (Cont’d)

Attach ABC Group

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Setup & Configuration (Cont’d)

Load ABC Items

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Count Process

Perform Full Cycle Count
 Generate Automatic Schedule Requests
 Generate Cycle Count Requests
 Cycle Count Listing

Count items
 Blind count
 Record quantity

Approve & Update
 Approve cycle counts
 Request recount
 Save & Update inventory

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Count Process (Cont’d)

Perform Full Cycle Count

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Count Process (Cont’d)

Perform Full Cycle Count

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Count Process (Cont’d)

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Count Process (Cont’d)

Update Items

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Special Considerations

Establish timely approach

Execution is everything!

What about locations audit?

How to handle reservations and allocations

What about “Kits”?

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Summary

Determine what type of industry and counting applies

Understand ABC Analysis

Analyze data ahead of time for ABC compiles

Execute properly

Test process thoroughly

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Thanks for attending
Ed McDonough
mcdonoughe@tusc.com

March 09