Cycle Counting

Contents

Introduction to Cycle count    

System Reference    

User Responsibilities    

Ownership    

Prerequisites    

Steps for ABC Analysis    

1. Create a ABC compile    

2. Generate ABC descending value report    

3. Define ABC Classes    

4. Define ABC Assignment Groups    

5. Associate Classes and Assignment Groups    

6. Assign Items to Classes    

7. Update Item Assignment (if required)   

8. Generate ABC Assignment Report    

CYCLE COUNTING    

Cycle Counting Defining    

 > Scope and Control Tab    

 > Serial and Schedule Tab    

 > Adjustment and ABC Tab    

Assign ABC Classes to Cycle Count    

Cycle Count Items    

Cycle Count Scheduler    

Perform Full Cycle Count    

Generating Cycle Count Listing    

Entering Actual Quantities    

Approving the adjustments     

Introduction to Cycle count

Cycle Counting is:

• Performed periodically to ensure accuracy of inventory quantities & values.
• Frequency of counting item may be based on the classification of items.
1. Example:
• Class A items shall be counted 4 times a year
• Class B items shall be counted 2 times a year
• Class C items shall be counted once in a year
• A method of taking inventory that does not require the inventory organization to shut down in order to count actual inventory items.

System Reference

• Oracle Inventory: ABC Codes
• ABC Compiles.
• ABC Classes.
• ABC Assignment Groups.
• Inventory, Vision Operations (USA): Counting > Cycle Counting > Cycle Counts

User Responsibilities



The store’s in-charge is responsible for:
• Setting up the cycle count parameters and scheduling.


The store’s person is responsible for:
• Printing cycle count requests.
• Performing the item counting.
• Entering actual item counts.
• Resolving inventory discrepancies in the database with Finance department.

Ownership

The Head of Material’s Department is responsible for ensuring that this document is necessary, reflects actual practices and supports company policy.

Prerequisites

• Item classification shall be done (by finance and material dept)
• Frequency of counting shall be decides (by Material dept)
• System setup shall be done (by Material / IT)

Steps for ABC Analysis

1. Creating a ABC compile.
2. Generating ABC descending value report.
3. Defining ABC Classes.
4. Defining ABC Assignment Group.
5. Associating classes and assignment group.
6. Assigning items to classes.
7. Updating item assignment.
8. Generating the ABC assignment report.

1. Create a ABC compile



The ABC compile ranks all the items in your inventory based upon compile criteria. This ranking is used to assign classes to your items.


Compile Criterion:
ABC analysis is done based on the value of consumptions. But initially till next 6 months from the date of Oracle implementation it will be based on Stock-in-hand value. Moving ahead it will be shifted to Consumption base.

Current on-hand quantity	Use the current on-hand quantity of inventory. Assign the sequence number by descending quantity.
Current on-hand value	Use the current on-hand quantity of inventory times the cost for the cost type. Assign the sequence number by descending value.
Historical usage value	Use the historical usage value (transaction history). This is the sum of the transaction quantities times the unit cost of the transactions for the time period you specify. Assign the sequence number by descending value.
Historical usage quantity	Use the historical usage quantity (transaction history) for the time period you specify. Assign the sequence number by descending quantity.
Historical number of transactions	Use the historical number of transactions (transaction history) for the time period you specify. A ssign the sequence number by descending number of transactions.
Forecasted usage value	Use the forecasted usage value based on the forecast quantity calculated and the cost type you specify. Assign the sequence number by descending value.
Forecasted usage quantity	Use the forecasted usage quantity. Assign the sequence number by descending quantity.
Previous cycle count adjustment quantity	Use the previous cycle count adjustment quantity. Oracle Inventory sums the value of all cycle count adjustments since the last ABC compile date. Assign the sequence number by descending quantity.
Previous cycle count adjustment value	Use the previous cycle count adjustment transaction value. Oracle Inventory sums the value of all cycle count adjustments since the last ABC compile date. Assign the sequence number by descending value.
MRP demand usage quantity	Use the MRP demand usage quantity. Oracle Inventory sums the MRP gross requirements for the MRP plan you specify. Assign the sequence number by descending quantity.
MRP demand usage value	Use the MRP demand usage value. Oracle Inventory sums the MRP gross requirements for the MRP plan you specify. The value is derived from the item cost type you choose in the ABC compile form. Assign the sequence number by descending value.



• Login to Oracle.
• Select  “Inventory, Vision Operations (USA)”
• Select “ABC COMPILE”.

• Select “M1” organization
• Select New button on the form.

     Complete “Define ABC Compile” form.
• Enter a Unique name for ABC compile.
• Optionally, enter a description of the ABC compile.
• Content Scope
• If you select “Organization” ranking will be done for all the items defined for your current organization even those with zero cost and zero quantity.
• If you select “Subinventory “ ranking will be done for all those items for which you have defined an Item/ Subinventory relationship. In this case you can also select specific subinventory defined in system.
• Valuation Scope
• Ranking must be done at the organization level if you did not select a Subinventory in the Content Scope field. If you only want to include items in a subinventory but you want the ranking to be done based on the organization wide ranking, select “Organization”.
• If you select “Subinventory” than only those quantities which are lying in specified subinventory will be considered. Quantities lying in other then specified subinventory will not be considered.
• Compile Specification
• Criterion
• Cost Type defaulted as per setup, Forecast depends on criterion, i.e. if forecast, must select forecast, Plan Name, From Date and To Date are required for some specific criterion.
• Save your work
• Execute the Compile
• Click the compile button and then a concurrent program will get fired.
   
• If needed compile results can be printed
• Open output of ‘Compile ABC analysis’ to view Compile Result

• Verify that compile ABC analysis is completed with a status of Normal.

Note: As this is in test system we got only 504 items in this compile but in actual we would be much more.

2. Generate ABC descending value report

• Select the ABC descending value report.
• Click the view output button to view output.
• Take Print if required.

3. Define ABC Classes

Use your own terminology to determine what are commonly used as ABC classes. Define class names that suit your business environment.
Navigation: Inventory, Vision Operations (USA) > ABC Codes > ABC Classes

• Enter Class Names and description
• Save your work

4. Define ABC Assignment Groups



ABC assignment groups associate ABC classes with an ABC compile. You assign item to ABC classes within a particular group. This allows you to assign items to different ABC classes in different group.


For example, suppose you define ABC groups “Cycle Counting” and “Planning”. You can define different ABC classes to these two groups. You can then assign an item to a different ABC class in each group. This allows you to prioritize item differently for Cycle Counting and Planning.

Navigation:

Inventory, Vision Operations (USA): ABC Codes > ABC Assignment Groups


Complete the ABC Assignment Groups form. On a blank line fill the following information.
• Enter a unique ABC group name.
• Associate Compile Name and save

5. Associate Classes and Assignment Groups

• Choose classes to use with assignment group
• Assign ranking to the classes within an assignment group.


ABC Group Class Assignment

• Select your assignment group from the list. Click the Group Class button.
• ABC Group Class Assignment window will get open.
• Complete the ABC Group Class Assignment form.
• Priority: Enter the sequence number in which classes are ordered. Number “1” is the most important, number “2” is second, and so for.
• Select the class names you defined.

6. Assign Items to Classes



Assignment may be made based upon following criterion.
1. Sequence Number
2. Items Percent
3. Inventory Value
4. Value Percent
• Open ABC Assignment Groups window.

• Select your assignment group from the list.
• Click the Assign Item button.
• Assign ABC Items window will get open.

As numbers of items in the compile are very less, here we are taking 50 items in Class A, next 100 items in Class B and rest in Class C.

In real business scenario it might be different, it could be based on the value.

Example:
Top Items having 85% of value is considered as Class A item.
Next Items having 10% of value is considered as Class B item.
And rest of the items would be considered as Class C item.

• Specify the cutoff point for each ABC class. Each ABC class must have at least one item assigned to it, and all items in the ABC compile must be assigned to an ABC class. You can use any of the following fields to determine the cutoff point.


Sequence:    You can enter the sequence number from the ABC Descending Value Report for the last item to be included in each ABC class. This value will be automatically calculated if you choose to assign classes by another method.


Inventory Value:    You can enter the cumulative value from the ABC Descending Value report for last item to include in each ABC class. Maximum value is automatically calculated. This maximum value is restricted to the total inventory value compiled and displayed in the Total Compiled Value Field.


% Item:    You can enter the percent of number of items compiled from the ABC Descending Value report to include in each class. This value is automatically calculated if you choose to assign classes by another method.


% Value:    You can enter the percent of total compile value from the ABC Descending Value report to include in each class. This value is automatically calculated if you choose to assign classes by another method.


Attention:     It is possible to have several items in the ABC compile with Zero Value. If any item with zero value is in a class other than the last class, you may only assign item using Sequence


For the inventory value, % item and % value field, if the value entered does not exactly match any item, the first item with value greater than the value entered is taken.
 



• Assign Item
• Click the Assign button.
• Click the OK button.
• A request is generated, press OK.
• Check the request status.

7. Update Item Assignment (if required)



Find Your ABC Assignment
• Go to ABC Assignment Groups window.
• Select your Assignment Group from the list.
• Click the Update Item button if required.
• Update ABC Item Assignment screen will appear.

• To enter a new item assignment.
• Click the New Record button on the toolbar.
• In the blank record, enter the item number and ABC class.
• To edit the class of a specific item.
• Find the item number in the list or use find to search for an item number.
• Use the list of values to select a new class for the item.
• Save your work and close the window.

8. Generate ABC Assignment Report



Navigation
Inventory, Vision Operations (USA): Reports > ABC and Counting

• Select ABC and Counting
• Submit a New Request screen will open.
• Select Single Request and press OK.
• ABC and Counting Report form will open.
• Request
Use the list of Values to find the name of report “ABC assignments report”
 
•  Complete the Parameter form
• ABC Group: Use List of Values to select ABC Assignment Group
• Sort Option: Use the list of Values to select the sort order for the report
Press OK button.
• Click Submit button on ABC and Counting Reports.

CYCLE COUNTING



Cycle Counting consists of:
• Cycle Counting Defining
• Generating Cycle Count Listing
• Entering Actual Quantities
• Approving Adjustment

Cycle Counting Defining



Navigation:
Inventory, Vision Operations (USA): Counting: Cycle Counting>


Cycle Count Select New
• Enter a unique name for the cycle count.
• Enter the calendar to use for this cycle count.
This calendar is used to determine the days on which to automatically schedule cycle count.
• Adjustment Account

• Scope and Control Tab

Enter the Scope and Control information for your cycle count.

Count Controls
• Optionally, enter the date on which the cycle count becomes inactive.
• Late Days: Enter the number of workdays that can pass after the date the count request was generated, before a schedule count becomes a late count.
• Starting Sequence :
Default to 1. You may leave this default or enter the number to use as starting number in the next count request generator. The count sequence number uniquely identifies a particular count and is used in ordering the cycle count listing.
• Unscheduled Entries
Optionally, specify whether you can enter counts for items that are not scheduled to be counted.
• Display System Qty
Select this field to display system on-hand quantities during count entry.


Automatic Recounts
Select to automatically assign a status of Recount to out of tolerance counts and include them in next cycle counting.
• Maximum
If you selected automatic recounts, enter the maximum number of times inventory can generate an automatic recount request. Once this number is reached the adjustment must be approved or rejected.


Count Subinventories
Defaults to ALL. You may leave this default or select SPECIFIC. If you choose “Specific” subinventories, you can navigate to the Subinventory region and select the subinventories to include in the cycle count.

• Serial and Schedule Tab



Select Serial & Schedule Tab. And complete the form.

Serial Control Option
• Count
Select the count option to determine whether to exclude serialized items from the cycle count ( Not Allowed), create one count request for each serial number ( One per Request ), or create multiple serial details in a count request ( Multiple per Request ).
• Detail
Quantity & Serial Numbers: Serial number & quantity are required and are
Validated when entering adjustment.


Quantity Only:     Serial number entry is optional if the count quantity
Matches the system quantity, regardless of whether the serial numbers match. If you do not enter serial number, the count is marked as completed. And no adjustments are performed. If you do enter serial numbers, both quantity and serial numbers are validated when determining whether adjustments are required.
• Adjustment
Adjust if Possible:    If a discrepancy exists between a count quantity & a system quantity or if the entered serial numbers do not correspond to the serial number already in the specified location, then the system will attempt to make adjustment if the adjustment variance & value are within tolerances. These adjustments consists of receipt & issue of the appropriate serial numbers to & from the specified location and are applicable only to instances in which new serial numbers or shipped serial numbers are counted.
Review All Adjustments: No automatic adjustments are attempted.
• Discrepancy
Select the 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.


If you turn automatic scheduling on, enter the following information


Auto Schedule
• Select to automatically schedule this cycle count.
• Frequency: Select “Daily”. This information is used along with the count frequency of each cycle count class, when performing automatic cycle count scheduling. The value you enter here dictates the window of time within which you can enter the count against schedule buckets.
• Count Zero Quantity: Determine whether to automatically generate requests to count items with an on-hand quantity of zero.
• Last Date: Display the last date this cycle count was automatically scheduled.
• Next Date: Leave blank or enter the date of the first workday (Monday) for the next schedule interval when this cycle count is scheduled.

• Adjustment and ABC Tab



Select Adjustment & ABC tab and complete the form.

Approval
• Required
Determine when the approval is required for adjustments.


Never:    Adjustment transactions are automatically posted where entered Counts differ from system balance.


If Out Of Tolerance:    Adjustment transactions are not automatically posted for the counts outside a specified approval tolerance. You must approve such adjustment before posting.


Always: You must approve all cycle count adjustments, regardless of tolerance level before it is posted.
• Tolerances
Enter one or more of the following tolerances.
• Qty Variance: Enter the percentage variance of count quantity to
On-hand quantity beyond which adjustments are held for approval.
• Adjustment Value: Enter the adjustment values beyond which
  adjustments are held for approval.
• Hit/Miss Analysis: Enter the percentage variance of count quantity
to on-hand quantity beyond which a count entry is considered as a miss for hit/miss reporting.
• ABC Initialization ( Optionally)
• Enter the ABC group name on which to base the cycle count item initialization or update.
• Option: Choose one of the following
• None:    Do not change to the list of cycle count items.
• (Re)initialize:    Use the ABC group you specified to load all
Items & their ABC assignments into the list of items to include in your cycle count. If you already had items defined for your cycle count, this action deletes existing information & reloads the items from the ABC group.
• Update:    Use the ABC group you specified to insert new
cycle count item.
If you choose Update option:
• Indicate whether to update classes. If an item’s ABC class assignment in the ABC group you specified is different from the cycle count class this item is assigned. The cycle count class is updated for the item with the ABC assignment in the specified ABC group.
• Indicate whether to delete unused item assignment that are no longer referenced in the specified ABC group.


Save your work.
• Re-query the records to ensure the re-initialization has occurred. Wait for Few minutes then select Run from query menu. If the status field does not display “Completed” wait for few more minutes then Run the query again.




Assign ABC Classes to Cycle Count



Enter ABC classes to include in your cycle count.
• Click on Class button

Complete the Cycle Count classes form
• Names of the ABC classes appear in this field. These names were determined in the ABC assignment group.
• Counts per Year: Enter the number of times per year you want to count each item in this class.
• Approval Variance: Optionally, enter positive or negative tolerances. If you do not enter tolerances, a value entered in the cycle count window is used.
• Save your work & close the cycle count classes’ window.



Cycle Count Items



To define Cycle count Items
• Click on Item button

• This form displays the cycle count items. You may verify an item’s class & specify an approval variance for specific item
• Save your work & close Cycle Count Item window & Cycle Count window.

Cycle Count Scheduler

• Choose Cycle Count Scheduler from Tools menu.
• Complete cycle count schedule parameter
• Select Include Control Group Items and click OK

• Click the OK button again.

Perform Full Cycle Count

• Select Perform Full Cycle Count from the tools menu.

• Click the OK button again.
• Select Perform Full Cycle Count from the tools menu.

• Parameters
• Use the list of values to enter your cycle count name in the parameters fields next to cycle count listing.
• Click Option button.
• Select Save All Output Files & press OK button.

As we selected frequency as Daily, schedule this program on Daily basis at suitable time.

• Press Submit button on Perform full cycle count screen. Click OK & close all windows.

Generating Cycle Count Listing

Navigation:
Inventory – Inventory, Vision Operations (USA) : Reports > ABC and Counting, Single Request  OK  : ABC and Counting Report
• Complete ABC and Counting report form.
• Name
Use the list of values to find the name of report, “Cycle Count Listing”
• Complete the parameter form.
• Cycle Count Name: Use the list of values to select the name of cycle count.
• Start Date: Defaults to today’s date
• End Date: Defaults to today’s date
• Include Recounts only: Indicate whether to print the listing for recounts only (“Yes”) or all items (“No”)
• Subinventory: Use the list of values to select a specific subinventory to count or leave blank for all subinventories. Suggest to keep it blank
• Display Serial Number
Leave as default value.
• Click OK button.
• Select the report to automatically run periodically
• Click the Schedule button.
• Select Periodically


Complete the Schedule form.

Entering Actual Quantities

Navigation:
Inventory – Inventory, Vision Operations (USA): Counting > Cycle Counting > Cycle Counting Entries


• Query the cycle count to be used.
• To enter scheduled counts.
• Count Quantity
Enter the quantity that you counted for each item. Inventory uses this quantity with the specified unit of measure to determine the value of cycle count adjustment.
• Save your work and it will get submitted for approval.

Approving the adjustments

• Approver shall take appropriate action and save the response/s .