Applying Cycle Counting - Optional

Cycle Counting is an inventory procedure in which selected materials are inventoried multiple times within a fiscal year. The Cycle Counting procedure is a complete inventory. All stock units are inventoried at least once a year.

With the Cycle Counting method, you can include stock units of the following stock types:

• Unrestricted-use stock
• Stock in quality inspection
• Blocked stock

Using the Cycle Counting indicator, the relevant materials for each plant are grouped into categories. For each of these categories, the number of physical inventories to be conducted each year is defined.

The physical inventory documents are created using batch input. Using the Cycle Counting indicator of the material and the last inventory date, the system determines the planned count date for the inventory stock unit and creates a batch input session. When the session is run, the system creates the physical inventory documents.

You can define the physical inventory cycle for each indicator of the CC inventory in Customizing for Inventory Management and Physical Inventory under Physical Inventory→Cycle Counting (OMCO).

The CC indicator can be set manually and by an ABC analysis. With the report RMCBIN00, ABC analysis of Cycle Counting, you can perform an analysis that assigns the materials to the individual categories according to consumption or requirements. The report offers a material selection per plant and material type. The analysis optionally considers only the materials with cycle counting indicator or all materials. The cycle counting indicator in the material master records can be automatically updated with this program.

For the ABC analysis, the consumption or demand values are determined as follows:

• Consumption analysis:

  The system uses the consumption quantities updated in the material master. The consumption value is determined from the corrected quantity of the total consumption and the valuation price for the specified plant.

• Requirement analysis:

  The system determines the total requirement value of the materials using independent requirements, sales orders, dependent requirements, stock transport order requirements, and the valuation price of the material.

CC inventory indicators can be fixed manually in the material master record to prevent automatic changes by the report. Manually fixed indicators in the material master are highlighted in green in the report.

To start the ABC analysis for setting the CC indicator, choose Logistics→Materials Management→Physical Inventory→Special Procedures→Cycle Counting→Set Cycle-Counting Indicator (or call transaction MIBC).

The report issues a list in the standard system that contains the following information:

• Material number with short text
• CC indicator resulting from the analysis
• Old CC indicator
• Value of the requirement or consumption in the selected time period
• Part of the total value comprised by the material
• Cumulated value

The pumps are analyzed in the ABC analysis of the cycle counting according to consumption as follows:

• The first 9 materials have indicator A. They account for 56% of the consumption (sorted in descending order).
• For pump 11, CC indicator A is maintained and fixed manually in the material master record, which means that it can no longer be changed with the CC report.
• 21 materials have indicator B. These account for 28% of the total consumption value.
• 51 materials have indicator C. These account for 14% of the total consumption value.
• 118 materials have indicator D. These account for 2% of the consumption value.
• Among the 200 materials, there are a total of 517 inventory counts.

You can manually change individual values using the report for nonfixed indicators. The value is not fixed, but can be changed by the report.

You use the Create Physical Inventory Documents for Cycle Counting program (report RM07ICN1) to create a batch input session for creating physical inventory documents. You can use the report to prepare cycle counting inventory for unrestricted-use stock, stock in quality inspection, and blocked stock.

To select the materials due for an inventory, enter an interval for the planned count date. When you execute the program, the system checks for which materials the inventory is to be carried out in the interval entered. In doing so, the system calculates the planned count date for all stock types as follows:

• Date of the last physical inventory of the unrestricted-use stock + predefined interval (depending on the CC indicator in the material master record).

You can decide whether a control list is displayed first or whether a batch input session is created immediately. From the control list, you can trigger the creation of the batch input session manually via Edit→Create session.

In the control list you will find the following information:

• First, the inventory units for which no inventory document can be created are listed.

• Then the stock units are listed for which the inventory is already active. Since the inventory has not been completed within the predefined buffer time, it must still be completed urgently. These stock management units are therefore not taken into account when the batch input session is created, because active physical inventory documents still exist.

• The materials for which a cycle-counting inventory is required in the planning period (specified interval for the planned count date) are then listed. If the inventory should have taken place before the planning period, the planned inventory date is displayed in highlighted color.

The inventory documents are created when the batch input session is processed. When you carry out the inventory, the count date is recorded as the date of the last inventory in the inventory data of the material during the difference posting.