Utilizing and Configuring Cycle Counting in Microsoft Dynamics 365 Supply Chain Management

Posted on: January 6, 2025 | By: Maya VanderWoude | Microsoft Dynamics AX/365, Microsoft Dynamics Manufacturing

As the new year begins, businesses often take the opportunity to assess and optimize their operations for the months ahead. Accurate inventory management is a critical area of focus, as it sets the foundation for smooth supply chain operations throughout the year. Microsoft Dynamics 365 Supply Chain Management (D365) provides a powerful tool for achieving this through Cycle Counting, a systematic method for routine stock level verification.

Whether you’re setting annual inventory goals or addressing discrepancies from the previous year, implementing cycle counting early can help businesses maintain accuracy, streamline operations, and prepare for success.

This blog dives into the benefits of cycle counting and walks you through its setup and utilization in D365.

What is Cycle Counting?

Cycle counting is a continuous process of counting inventoried items at scheduled intervals. Unlike a full physical inventory count, this counting happens without interrupting daily warehouse operations. Cycle counts target specific products or locations to ensure ongoing accuracy.

Step 1: Create a Cycle Counting Plan

The plan acts as the blueprint for your counting operations.

  • Navigation: Warehouse Management > Setup > Cycle Counting > Cycle Count Plans`.

  • Configuration:
    • Assign a Plan ID and Description.

  • Define the maximum number of counts per cycle.

  • Set the interval between counts.

  • Choose whether to include empty locations.

  • Apply product or location criteria to focus on specific areas or items.

Step 2: Configure Mobile Device Menu Items

Mobile devices allow warehouse staff to complete counts efficiently.

  • Navigation: Warehouse Management > Setup > Mobile Device > Mobile Device Menu Item.
  • Setup Steps:
    • Create a new menu item with `Work` mode and enable “Use existing work”.

  • Select `System Directed` and enable “Handle by License Plate”.

  • Customize item visibility, such as number of attempts, displaying product numbers, or serial numbers.

Step 3: Assign and Configure Workers

Tailor the permissions for each user:

  • Navigation: Warehouse Management > Setup > Worker.
  • Settings:
    • Designate users as supervisors if required.
    • Establish approval thresholds for percentage, quantity, or value deviations.

Step 4: Process and Review Counts

  1. Run Cycle Counting Plans:

Generate counting work manually or automate it using recurring jobs.

  1. Review and Accept Counts:

Supervisors can validate results by comparing expected and counted quantities.

  • Accept accurate counts to update inventory records.
  • Reject discrepancies for further investigation.

Best Practices for Successful Cycle Counting

  1. Automate Processes:

Set recurring jobs for consistent counting.

  1. Focus on High-Value Inventory:

Prioritize frequently moving or valuable stock.

  1. Utilize Mobile Devices:

Streamline operations by enabling mobile-friendly processes.

  1. Establish Clear Approval Policies:

Implement discrepancy thresholds for requiring manual review.

Conclusion

Start the new year with confidence by implementing effective inventory management practices. Cycle counting in Microsoft Dynamics 365 is the perfect way to ensure accuracy, reduce downtime, and set your supply chain up for success. Take control of your inventory today and make this year your most efficient yet!

Written by: Andrew Beck

Next Steps:

If you want to learn more about Cycle Counting with Microsoft Dynamics 365 Supply Chain Management, contact us here to learn how we can help you grow your business. You can also email us at info@loganconsulting.com or call (312) 345-8817.