Microsoft Dynamics AX – The Counting Journal Conundrum

Posted on: August 4, 2014 | By: Jarrod Kraemer | Microsoft Dynamics AX/365

The way organizations count, handle, and manage inventory is always evolving.  Microsoft Dynamics AX uses Counting Journals to count and validate inventory levels.  Courting Journals are constructed and designed to be used in lieu of a yearly physical inventory.  We pose a counting journal as a “conundrum” because each company has their internal processes, and rules for counting and managing their inventory levels.  (Note: Logan Consulting makes recommendations based on a client’s business needs.  Some businesses may decide to use a combination of yearly and counting journal methods). 

As mentioned earlier, a counting journal is the vehicle that is used to count and update items in AX.  Counting Journal lines can be constructed in numerous ways through filtering and sorting of particular parameters within the creating of the journal.  A user can filter on a particular item, a particular warehouse location or zone, or they can filter on a counting group that gets assigned to an item.

Counting Groups are set up in AX so that items can be classified by their importance in the cycle counting process.  In the example below, inventory is set up so that it will be counted on either a monthly, quarterly, or semiannual basis.  When setting up Counting Groups, be sure to set the Counting Code to Period and the Counting Period to the maximum number of days that should be between Cycle Counts.  For the Monthly group, any inventory item assigned this inventory code should be counted at least every 30 days.  Once counting groups are defined, these can be added to items and these items will pull when creating a counting journal based on counting group.

After an item has been counted, AX will apply a date when the item was counted.  The aforementioned counting date helps managers and supervisors determine what has been counted, and what needs to be counted.  Ideally we would want the inventory in AX to match what is physically in your warehouse.  When discrepancies occur the following troubleshooting techniques provide a roadmap for investigation:

Items counted are higher than generated by counting journal:

• Were items received between the generation of the counting journal and the actual physical count?
• Was an inventory pick reversed between the generation of the counting journal and the actual physical count?
• Were more items created by a production order than reported on the route card?
• Were too many items picked for production in AX?
• Extra inventory?

 Items counted are less than generated by counting journal:

• Were items shipped between the generation of the counting journal and the actual physical count?
• Were items picked for production between the generation of the counting journal and the actual physical count?
• Were items scrapped by a production order on the route card that were actually useable items?
• Were items scrapped by quality building between the generation of the counting journal and the actual physical count?
• Lost inventory?

 Items counted are in different locations:

• Were items moved between the generation of the counting journal and the actual physical count?
• Were items moved into/out of quality quarantine between the generation of the counting journal and the actual physical count?
• Were items moved to an unregistered location but not recorded in AX between the generation of the counting journal and the actual physical count?

This is just the tip of the iceberg when it comes to managing inventory.  There are other features used with counting journals in AX and Logan has implemented various non-system strategies for managing inventory. 

For additional information please feel free to reach out to us at info@loganconsulting.com or (312) 345-8817.

All the best!

Logan Consulting
www.loganconsulting.com

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