SCM ABC XYZ white Paper V01
SCM Classification: ABC/XYZ Analysis – DEMYSTIFIED
Table of Contents
2 Introduction 3
3 Why ABC and XYZ only? 4
4 The ABC Analysis 5
4.1 The Details 5
4.2 The Steps 5
4.3 Limitations of ABC 6
5 REFERENCES 6
6 ABOUT AUTHOR 6
1 Introduction
This is the sequel of my quest to relate management with life. The theories of Evolution of human may be “Survival of the Fittest” or “Selective Elimination of non-adaptors” applies in our day today lives too.
As much as the industry focuses on revenue, profits, top lines and bottom lines there is more focus these days on Supply Chains, Working capital and efficiencies. Complexities of managing these supply chains have increased because of various factors like Globalization, increased product portfolio, decentralization etc. Managers across the globe are compelled to focus on their KRAs. But the big question is
How to arrive at the Result Areas which are KEY?
What to focus on?
What to ignore/eliminate?
Similar is the dilemma, with contemporary SCM Managers, Inventory Planners and Demand Planners.
What all products to plan for?
How to categories/group them?
How to apply different strategies for
1. Demand Planning
2. Inventory Planning
“How to apply different strategies” was covered in my previous paper named “Two innovative approaches for Dynamic Strategies”.
In every industry today forecasting and planning is a vital function. Especially when capital is required and unnecessary inventory pile up can become a huge burden. There are un-certainties in both Supply and Demand. Forecasting with these uncertainties does become a big challenge. It is also generally known that forecasts have their own inherent errors. This paper explains approach to enable the classification and categorization of products for any business to streamline the challenges in supply chain of the organizations. These analysis technique addresses the facets like inventory management strategies, forecast accuracy, enables better SOP process.
2 Why ABC
Table of Contents
2 Introduction 3
3 Why ABC and XYZ only? 4
4 The ABC Analysis 5
4.1 The Details 5
4.2 The Steps 5
4.3 Limitations of ABC 6
5 REFERENCES 6
6 ABOUT AUTHOR 6
1 Introduction
This is the sequel of my quest to relate management with life. The theories of Evolution of human may be “Survival of the Fittest” or “Selective Elimination of non-adaptors” applies in our day today lives too.
As much as the industry focuses on revenue, profits, top lines and bottom lines there is more focus these days on Supply Chains, Working capital and efficiencies. Complexities of managing these supply chains have increased because of various factors like Globalization, increased product portfolio, decentralization etc. Managers across the globe are compelled to focus on their KRAs. But the big question is
How to arrive at the Result Areas which are KEY?
What to focus on?
What to ignore/eliminate?
Similar is the dilemma, with contemporary SCM Managers, Inventory Planners and Demand Planners.
What all products to plan for?
How to categories/group them?
How to apply different strategies for
1. Demand Planning
2. Inventory Planning
“How to apply different strategies” was covered in my previous paper named “Two innovative approaches for Dynamic Strategies”.
In every industry today forecasting and planning is a vital function. Especially when capital is required and unnecessary inventory pile up can become a huge burden. There are un-certainties in both Supply and Demand. Forecasting with these uncertainties does become a big challenge. It is also generally known that forecasts have their own inherent errors. This paper explains approach to enable the classification and categorization of products for any business to streamline the challenges in supply chain of the organizations. These analysis technique addresses the facets like inventory management strategies, forecast accuracy, enables better SOP process.
2 Why ABC
References: “Utilization of ABC/XYZ analysis in Stock Planning in the enterprise” Ann. Warsaw Univ. of Life Sci. – SGGW, Agricult. 61, 2013 Authors: JERZY BULIŃSKI, CZESŁAW WASZKIEWICZ, PIOTR BURACZEWSKI “XYZ” Inventory Classification & Challenges” IOSR Journal of Economics and Finance (IOSR-JEF),e-ISSN: 2321-5933, p-ISSN: 2321-5925. Volume 2, Issue 2 (Nov. – Dec. 2013), PP 23-26 Authors: Dinesh Kumar Dhoka, Dr. Y. Lokeswara Choudary "ABC class" by Masaqui - Own work. Licensed under Creative Commons Attribution-Share Alike 3.0 via Wikimedia Commons - http://commons.wikimedia.org/wiki/File:ABC_class.jpg#mediaviewer/File:ABC_class.jpg “OPTIMIZATION OF LOGISTICS PROCESSES USING XYZ METHOD” ,Ing. Petriková A.1, Prof., Ing., Šebo, D., PhD2., Ing. Dušan Sabadka, PhD3. Faculty of Mechanical Engineering 1,2,, – Technical University , Košice, Slovakia 6 ABOUT AUTHOR