5Cycle Counts

This chapter contains the following:

Cycle counting is an inventory accuracy analysis technique where inventory is counted on a cyclic schedule rather than once a year to ensure the accuracy of inventory quantities and values.

Cycle counting enables you to keep inventory records accurate by correcting errors between the on-hand (perpetual) and actual on-hand (physical) quantities. Cycle counting can also be a valuable tool to help identify patterns in the errors found. Analysis of these patterns can suggest and help to prioritize improvements in training, tools, and processes. Over a period of time these improvements may increase the average level of inventory record accuracy.

Accurate on-hand quantities are essential for managing supply and demand, maintaining high service levels, and planning production. Most effective cycle counting procedures require the counting of a certain number of items every workday with each item counted at a prescribed frequency. You can perform cycle counting instead of taking complete physical inventories, or you can use both techniques side-by-side to verify inventory quantities and values.

Create and Manage Cycle Counts

Cycle counting is the periodic counting of individual items throughout the course of the year. Cycle counting increases your level of inventory accuracy.

You can perform cycle counts using either of these as criteria for your cycle count:

  • ABC classes

  • Item categories from Product Information Management

You can manage all of your cycle counting tasks from the Inventory Management work area. Select Counts from the task panel.

ABC Classes

You can group items assigned to specific ABC classes. With ABC classification of your items as the basis for deciding the count frequency, your A class items get counted more frequently compared to B or C class items. For this method, you specify ABC assignment groups and ABC assignment group synchronization options.

Item Categories

You can assign items associated with specific item categories to a cycle count. All items belonging to those item categories are included in a cycle count regardless of the subinventory or locator they're stored in. This lets you define the items in the cycle count based on common grouping criteria already established in Oracle Fusion Product Information Management item categories.

Creating a cycle count includes specifying schedules, approvals, parameters, items, item categories, and classes to include in a cycle count. Use the Create Cycle Count and Manage Cycle Counts tasks from the Inventory work area to create and manage your cycle counts.

You can perform cycle counts using ABC classes or PIM item categories as criteria for your cycle count.

Note: To create a cycle count using item categories from Oracle Fusion Product Information Management, you must first enable the Perform Cycle Count Based on Item Category feature in the Setup and Maintenance work area.

The process can includes seven train stops:

  • Enter primary details

  • Define schedules and approvals

  • Define parameters

  • Define item categories

  • Define items in item categories

  • Define classes and items

  • Review

Enter Primary Details

On the Create Cycle Count: Enter Primary Details page, choose the subinventories to include in the cycle count. Also, specify ABC assignment groups and ABC assignment group synchronization options.

To create a cycle count using item categories from PIM, select the Enable cycle count by item category check box.

You can automatically add items to a cycle count by selecting an ABC assignment group. In this case, all of the ABC assignment group's items are added to the cycle count.

Define Schedules and Approvals

On the Create Cycle Count: Define Schedules and Approvals page, define the schedule for the cycle count. Also, specify whether and when approval is required for variances between the actual counted quantity and on-hand quantity.

Define Parameters

On the Create Cycle Count: Define Parameters page, specify count parameters, serial number options, and count accuracy values for the cycle count.

Enter the required fields and save your count definition in order to enable the Define classes and Items stop enabled. This only applies if ABC assignment groups are selected.

Define Item Categories

On the Create Cycle Count: Define Item Categories page, select the item categories from PIM to use in the cycle count. Also, specify your options for synchronizing item categories with items.

Note: This stop is available only if you select the Enable cycle count by item category check box on the Enter Primary Details page.

Define Items in Item Categories

On the Create Cycle Count: Define Items in Item Categories page, select the items to use in the cycle count.

Manually add items to a cycle count by searching for and selecting the desired individual items on this page. You can also enter the number of counts per year for the selected items.

Note: This stop is available only if you select the Enable cycle count by item category check box on the Enter Primary Details page.

Define Classes and Items

On the Create Cycle Count: Define Classes and Items page, select the ABC classes and items to use in the cycle count.

Manually add items to a cycle count by searching for and selecting the desired individual items on this page.

Review

On the Create Cycle Count: Review page, review the selections made on previous pages. You can click the Subinventories to Count link to display the subinventories to be included in the count.

When you add items to a cycle count, you specify the items that you want to include in the cycle count.

You can:

  • Manually add items to a cycle count

  • Automatically add items to a cycle count

Note: To be able to add an item to a cycle count, you must set the item's Cycle Count Enabled attribute to Yes.

Manually Adding Items to a Cycle Count

For cycle counts with ABC classes, manually add items to a cycle count by searching for and selecting the desired individual items on the Define Classes and Items page.

For cycle counts with item categories, manually add items to a cycle count by searching for and selecting the desired individual items on the Define Items in Item Categories page.

Automatically Adding Items to a Cycle Count

For cycle counts with ABC classes, automatically add items to a cycle count by selecting an ABC assignment group on the Enter Primary Details page. All of the ABC assignment group's items are added to the cycle count. The ABC assignment group's ABC classes are also added to the current cycle count classes, and classifications are maintained for the included items.

You can choose to synchronize class information for existing items in the cycle count based on the new ABC assignments. You can also choose to have any items that are no longer in the ABC group automatically deleted from the cycle count item list. To be able to change classifications of items in a cycle count independently of ABC classes, choose the None option for the synchronization mode.

For cycle counts with item categories, automatically add items to a cycle count by selecting an item category on the Define Item Category page. When you select an item category on the Define Item Category page, all items in that category populate in the item and item category tables at the next train stop.

This topic discusses how cycle count approval tolerances are calculated.

Settings That Affect Approval Tolerances

You specify values for these settings on the Define Classes and Items and Define Schedules and Approvals pages:

  • Quantity Tolerance Percentage and Negative Quantity Tolerance Percentage: Limits that you define for the positive and negative difference between the actual cycle count quantity and the tracked on-hand quantity.

  • Positive Adjustment Value Tolerance and Negative Adjustment Value Tolerance: Limits that you define for the total value of a cycle count adjustment.

How Approval Tolerances Are Calculated

Approval tolerances are first calculated using class- and item-level values that you specify on the Define Classes and Items page. If you don't specify values on the class and item level, approval tolerances are calculated using values that you specify on the Define Schedules and Approvals page.

Example: Calculating Approval Tolerances

This table provides examples of values for quantity variance and adjustment value tolerances for one item in a cycle count.

Item Attributes Value

Item Standard Cost

$10.00

Positive Quantity Tolerance Percentage

5%

Negative Quantity Tolerance Percentage

10%

Positive Adjustment Value Tolerance

$200

Negative Adjustment Value Tolerance

$250

Using the values from the previous table, the following table provides examples of four different count scenarios for the item, and the tolerances that each different scenario violates.

Application On-Hand Quantity Count Quantity Quantity Variance Adjustment Quantity Adjustment Value Tolerance Exceeded

100

106

+6%

+6

+$60

Positive Quantity Percentage

100

88

-12%

-12

-$120

Negative Quantity Percentage

100

122

+22%

+22

+$220

Positive Quantity Percentage and Positive Adjustment Value

100

73

-27%

-27

-$270

Negative Quantity Percentage and Negative Adjustment Value

FAQs for Cycle Counts

Positive and negative hit and miss percentages define the positive and negative tolerances for the percentage difference between the tracked on-hand quantity and the actual cycle count quantity. A count is considered to be a hit if it's within these tolerances, and a miss if it's outside them. The hit and miss tolerances are used to evaluate the accuracy of cycle counting procedures, rather than the accuracy of inventory.

If a serial number discrepancy exists between the count quantity and system quantity, or if the entered serial numbers don't correspond to the serial numbers already in the specified location, adjustments are attempted if the adjustment variance and value are within tolerances. These adjustments consist of receipts and issues of the appropriate serial numbers to and from the specified location and are applicable only to instances in which new serial numbers or shipped serial numbers are counted.

The cycle count includes the consigned current on-hand value and consigned current on-hand quantity.

Purge Cycle Counts

Use the Purge Cycle Count process to remove cycle count records from the database.

Purging a cycle count removes all related objects such as schedules, count sequences, count classes, items, and so forth. You can purge cycle counts from the Manage Cycle Counts page or the Scheduled Processes work area.

Purge from Manage Cycle Counts Page

To purge cycle counts from the Manage Cycle Counts page:

  1. Select Manage Cycle Counts from the Counts task list in the Inventory Management work area.

  2. Search for and select a cycle count.

  3. Select Purge Cycle Count from the Actions menu.

  4. In the Purge Cycle Count dialog box, decide whether or not to select the Include Count Definition check box.

    When you select this option, the process deletes all data for the complete cycle count from the database. If you don't select this option, only the count sequences are deleted.

  5. Enter a date in the Purge Information Before field. For example, if you enter November 1, 2019, the process purges all cycle counts prior to this date.

  6. Optionally, select a value for the Purge Count Sequences field. You can choose to purge the cycle counts:

    • Purge all count sequences

    • Purge only count sequences with errors

    You can also choose to leave this field blank.

  7. Click Ok.

Purge from Scheduled Processes Work Area

To purge cycle counts from the Scheduled Processes work area:

  1. From the Navigator, select Tools > Scheduled Processes

  2. Click the Schedule New Process button.

  3. Search for and select the Purge Cycle Count process.

  4. Enter your organization and cycle count name.

  5. Determine whether to purge the count setup.

  6. Select the date before which you want to purge all cycle count records.

  7. Optionally, select a value for the Purge Count Sequences field. You can choose to purge the cycle counts:

    • Purge all count sequences

    • Purge only count sequences with errors

    You can also choose to leave this field blank.

  8. Click Submit.

Note: If you select Purge only count sequences with errors and choose No for the Purge Count Setup field, then only the count sequences that have error records in pending transactions are deleted. In this case, the Purge Count Details Before date isn't required.

If you select Purge all count sequences and choose Yes for the Purge Count Setup field, then all count sequences and pending transactions with errors before the specified date are deleted.

FAQs for Purge Cycle Counts

If you select a value for the Purge Count Sequences field when submitting the Purge Cycle Count process, the process also deletes the cycle count pending transactions (for that cycle count only). You can choose to purge all count sequences, purge only the count sequences with errors, or leave the field blank.

When purging a cycle count sequence, an error is raised if you have pending transactions for the cycle count. This could happen if someone uploaded cycle count sequences, but didn't process them yet. This error assures that you're aware of any pending transactions against the cycle count and forces you to process the pending transactions.

The Purge Cycle Count process contains a parameter to enable you to purge only the count sequences with errors, or purge all count sequences.

Create Manual Count Schedules

FAQs for Create Manual Count Schedules

You can create a manual cycle count schedule in addition to, or instead of, creating an automatic cycle count schedule. You can create a manual schedule to add an additional count for a particular item if you want to count the item more frequently than the automatically scheduled counts require. Additionally, you can create a manual schedule for specific subinventories, locators, and items, and set the count for any inventory date. For example, you could create a manual schedule to count item A wherever it can be found in subinventory X. You could also create a manual schedule to count all item quantities in subinventory Y, locator B-100.

Generate Count Schedules

This topic discusses how cycle count schedules are generated.

Settings That Affect Cycle Count Schedule Generation

Cycle counts are generated using the automatic schedule parameters that you set on the Define Schedules and Approvals page. On this page, you must enable automatic scheduling to generate cycle counts. Additionally, you must set the Cycle Count Enabled item attribute to Yes for each item you want to include in a cycle count.

How Cycle Count Schedules Are Generated

Cycle count schedules are generated at the frequency that you define. For example, if the frequency is weekly, cycle counts are scheduled for all items that need to be counted on all of the workdays in the current week. If the frequency is daily, cycle counts are scheduled for items that are due for counting on the current date.

A cycle count request is generated for each item number, revision, lot number, subinventory and locator combination for which on-hand quantities exist. Cycle count requests are ordered first by subinventory and locator, then by item, revision, and lot. A unique sequence number is assigned to each cycle count request, and can be used for reporting, querying, and rapid count entry.

Generate Count Sequences

This topic discusses how cycle count sequences are generated.

Settings That Affect Count Sequences

Count sequences are generated using the automatic schedule parameters that you define on the Define Schedules and Approvals page, and the manual schedule parameters that you define on the Manage Manual Count Schedules page.

How Count Sequences Are Generated

Count sequences are generated for each item number, revision, lot number, subinventory and locator combination for which on-hand quantities exist. Count sequences are ordered first by subinventory and locator, then by item, revision, and lot. A unique sequence number is assigned to each count sequence. You can use this sequence number for reporting, querying and rapid count entry.

Example 1: Count Sequence Generation

Assume that an inventory organization has the following on-hand quantities:

  • Locator B1.1.1: 100 EA

  • Locator: B1.1.2: 10 EA

  • Locator: B1.1.3: Does not include any on-hand quantities

Assume that the cycle count schedule has this information:

  • Item: PLT100

  • Subinventory: BULK

  • Count Zero Quantity: No

  • No locator is specified at the schedule level

Using the on-hand quantities and cycle count scheduling information described, the count sequences generated are:

  • Item: PLT100; Subinventory: BULK; Locator: B1.1.1; Suggested Quantity: 100 EA

  • Item: PLT100; Subinventory: BULK; Locator: B1.1.2; Suggested Quantity: 10 EA

Note that cycle count sequence generation would differ if these changes existed:

  • For a lot- or revision-controlled item, generation of cycle count schedules would result in different count sequences for different revisions and lots, depending on whether the item is lot-, revision-, or lot/revision-controlled).

  • If the item is serial number-controlled, the serial number options that are defined in the cycle count properties determine that either different cycle count sequences are generated for each serial number, or one cycle count sequence is generated for multiple serial numbers.

Example 2: Count Sequence Generation

Assume that an inventory organization has these on-hand quantities:

  • Locator B1.1.1: 100 EA

  • Locator: B1.1.2: 10 EA

  • Locator: B1.1.3: Does not include any on-hand quantities

Assume that the cycle count schedule has this information:

  • Item PLT100

  • Subinventory: BULK

  • Count Zero Quantity: Yes

  • No locator is specified at the schedule level

  • The Item/locator combination exists between Item PLT100 and all of the locators in the BULK subinventory

The count sequences generated would be the following:

  • Item: PLT100; Subinventory: BULK; Locator: B1.1.1; Suggested Quantity: 100 EA

  • Item: PLT100; Subinventory: BULK; Locator: B1.1.2; Suggested Quantity: 10 EA

  • Item: PLT100; Subinventory: BULK; Locator: B1.1.3; Suggested Quantity: 0 EA

FAQs for Generate Count Sequences

Generate count sequences just before you want to count the physical material, since count sequences are generated for balances that are on hand at the moment that you generate count sequences.

No, cycle count adjustments are made in the primary UOM. You must change both the primary and secondary UOM quantities to apply secondary quantity adjustments to cycle counts.

Approve Count Sequences

FAQs for Approve Count Sequences

Change the value in the Status field on the Approve Count Sequences page. Enter your comments or reason for approval. The Owning Party field is displayed when the count is for a consigned item.

Import Count Sequences

This topic discusses how to integrate cycle counting with an external application.

You can:

  • Import count sequences

  • Export count sequences

  • Review count interface records

Importing Count Sequences

You can import an external application's count sequence records to process them in Oracle Fusion Inventory Management using the Cycle Count Open Interface. You might want to do this if, for example, your company runs Oracle Fusion applications, but your company's inventory organizations are managed by a third-party warehouse that uses a different system.

After the records are imported to the Cycle Count Open Interface's tables, cycle count adjustments can be processed using an open API, a concurrent program such as GenerateCountSchedules or GenerateCountSequences, or the Oracle Fusion Inventory Management cycle counts user interface.

Exporting Count Sequences

You can export count sequences to populate an ADFdi-enabled Excel spreadsheet. You can use this spreadsheet to:

  • Review count interface records.

  • Serve as the data source for importing count sequence records from Oracle Fusion Inventory Management to an external application's database.

    After the records are imported, you can edit count sequence data using the third-party application.

Reviewing Count Interface Records

When you review count interface records, you view and make changes to cycle count sequences in an ADFdi-enabled spreadsheet rather than in the Oracle Fusion Inventory Management cycle counting user interface.

Note: Before you can review count interface records, you must first export count sequences.