28 May 2008                www.strategosinc.com

Inventory Accuracy, Cycle Counting & Lean

Counting That Really Counts

We rarely hear of cycle counting as an element of Lean Manufacturing. I suspect that Taiichi Ohno would have turned purple at the idea and Shigeo Shingo would have dismissed it sarcastically.

And, rightly so since Cycle Counting, alone, is a backwards way to get accuracy. It fixes errors after the fact (waste). It does nothing to prevent, and even encourages, future errors.

Yet, inventory and the need for accuracy will be with most firms for a long time. With poor accuracy, the spectre of a stockout looms large in the minds of many and this pervasive fear inhibits lean implementation.

What most firms need is not Cycle Counting but an Inventory Accuracy program that integrates with lean strategy. Such an approach includes:

• Physical Inventory- One complete, accurate, last, and final physical inventory to jump-start the program.

• Error Prevention- Aggressive efforts to identify and eliminate root causes of inventory errors and reduce the error creation rate.

• Transaction Reduction- Using Kanban, workcells and lean to reduce the volume of transactions and, thus, new errors.

• Cycle Counting- To locate and correct those errors that do enter the system.

If shortages and high inventory hamper your lean efforts, our new pages on  Inventory Accuracy and our Cycle Counting Seminar may interest you. We also have a free Cycle Count Estimator to estimate count frequency.

Regards,

Quarterman Lee

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