Cycle Counting

Contents:

Flagging Materials for Cycle Counting

Creating Physical Inventory Documents for Cycle Counting

 SAP AG 2002

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 Cycle Counting: Course Objectives

At the conclusion of this unit, you will be able to:

Describe the cycle counting procedure

Describe the ways of assigning the cycle
counting indicator in the material master
record

Carry out a physical inventory using the cycle
counting procedure

List the most important indicators and
Customizing settings

 SAP AG 2002

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 Cycle Counting: Course Overview Diagram

3. Inventory
Sampling

Cycle
Counting

Physical Inv.
Management

Introduction

 SAP AG 2002

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 Cycle Counting: Business Scenario

In your company, you assign a cycle counting

indicator to materials. These indicators are set
in the material master record through an ABC
analysis. You want to count your A materials
every 30 days. In other cases, you manually
assign a cycle counting indicator to the material
master record. This indicator determines the
intervals at which the physical inventory is
carried out.

 SAP AG 2002

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 Cycle Counting

Physical inv.

Cycle Counting

Stock:
Plant 0001
Plant 0001

Stock
Indicator: B
B B C
A

...

Number of inventories: A B C D

12 x 6x 4x 1x ...n x

 SAP AG 2002

 Cycle counting is a method of physical inventory whereby material is inventoried at regular intervals
within a fiscal year. These intervals or cycles depend on the cycle counting indicator set for the
material.
 Cycle counting allows fast-moving items to be counted more frequently than slow-moving items, for
example.
 All materials to be included in the cycle counting inventory are flagged. This is done either
manually, using a cycle counting indicator in the material master record (storage data), or
automatically, by means of an ABC analysis. The cycle counting indicator allows you to classify
materials into individual cycle counting categories (for example: A, B, C, D) In Customizing, you
can set for each category how often the materials are inventoried.

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 Setting the Indicator

Purchasing

1. Manually Material
Material cc- A
master
master
data
data

Via report Consumption-based Reqmnts-based

2.
RMCBIN00 analysis analysis

Analysis

Material Text CC CC
Value Quantity new old
$ pc. Plant 0001
PP-001... No. Text CC CC
21.500 19.850 Material new old
PP-008... PP-001... A
20.330 15.100 PP-008 A A
PP-015... PP-015 B B

...
B A
C A
C C
 SAP AG 2002

You can flag materials that are to be included in cycle counting as follows:
-Manually in the material master record (storage data)
-Automatically using ABC analysis.
You can use program RMCBIN00 to carry out an ABC analysis, which assigns materials to
each category according to consumption or requirements. You can choose whether the analysis
should only include materials with cycle counting indicators or all materials. The cycle counting
indicator can be automatically updated in ABC analysis.

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 When is the Next Physical Inventory?

CC No. inv. Interval Buffer Percent

Plant Indicator
*0001 A 12 20 5 50
0001 B 6 41 10 30
0001 C 3 82 20 15
0001 D 1 247 05
= 100
Number of Number of Number of
phys. invs workdays workdays
per year that the
count day
can vary from
the planned
count day

* All materials in plant 0001 with CC indicator A must be counted 12 times

per year (every 20 days)

For all new materials in stock, the date when the accounting view
was initialized is relevant.
Batches: The date when the batch was created is relevant.

 SAP AG 2002

 To plan the cycle counting inventories, start the RM07ICN1 cycle counting program at regular
intervals. This program checks the due dates for inventories for all cycle counting materials.
 If it is time for an inventory for a certain material, use the program to create a batch input session to
create physical inventory documents. Physical inventory documents are only created for stock type 1
(unrestricted use). The planned inventory count date is calculated as follows:
Date of last inventory + pre-defined interval
 The interval between inventories for each cycle counting indicator is set in Customizing.
 Use the batch input session to create the physical inventory documents.
 Now you can carry out the inventory. When the difference is posted, the actual inventory count date
is recorded in the material inventory data as the date of the last inventory.

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 Cycle Counting: Summary

Cycle counting is a method of physical inventory

whereby material is inventoried at regular intervals
within a fiscal year. These intervals or cycles depend
on the cycle counting indicator set for the material.

 SAP AG 2002

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 Cycle Counting: Exercises

Unit: Cycle Counting

Topic: Cycle Counting

• Explanation of the cycle counting process

• Assigning a cycle counting indicator to a material
• Carrying out the cycle counting process
• Configuration and settings for cycle counting

In your company, materials are grouped in different cycle counting

categories. You have materials A, B and C. Materials belonging to group
A are the highest in value and are therefore counted every 30 days. In
some cases, you manually assign a cycle count category to a material, in
others, the cycle count program assigns the indicator.

1-1 Cycle Counting

1-1-1 Display the settings for cycle counting in Customizing and answer the
following questions by filling out the table.
What are the cycle counting indicators for plant 1000?
How many physical inventories are carried out?
What is the percentage for each indicator?

Cycle count. Number of Percentage

indicator physical
inventories

Plant 1000

1-1-2 Set the cycle count indicator for material T-AM8## in the material master to
C. Which view is this field in?

_________________________________

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 1-1-3 Determination of cycle counting indicator
Carry out this analysis of past consumption values (time period 1 year) for the
finished products in plant 1000. Choose List display first as the processing
step!
What is the suggested new cycle counting indicator for material T-AM8##?
_______________________
Only change the cycle counting indicator for your material T-AM8##.
Save the ABC analysis.

© SAP AG TSCM52 12-10

 Cycle Counting: Solutions

Unit: Cycle Counting

Topic: Cycle Counting

1-1 Cycle Counting

1-1-1 Menu path: Tools → Accelerated SAP → Customizing → Edit Projects →
SAP Reference IMG → Materials Management → Inventory Management
and Physical Inventory → Physical Inventory → Cycle Counting

Cycle count. Number of Percentage

indicator physical
inventories
A 12 56
Plant 1000 B 6 28
C 3 14
D 1 2

1-1-2 In the material master, set the cycle counting indicator for material T-
AM8## to C.
Menu path: Logistics → Materials Management → Material Master → Material →
Change → Immediately
In which view is the Cycle counting physical inventory field? Storage 1

1-1-3 Determination of cycle counting indicator.

Carry out this analysis of past consumption values (time period: 1 year) for the
finished products in plant 1000. Carry out the analysis for previous
consumption values for raw materials in plant 1000. Choose List display
first as the processing step!
What is the new cycle counting indicator for material T-AM8##? Determining
the new CC indicator depends on the consumptions of this material, for T-
AM8##, ‘D‘ should be the indicator.
Only change the cycle counting indicator for your material T-AM8##.
Select your material T-AM8## and choose 'Change CC indicator'.
Change the indicator to the calculated value.
Save the ABC analysis.

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