What do we do differently?
We offer a fact-based overview empowering you to maximize your profit. Years of experience have taught us that a small percentage of your customers and products generate the bulk of your income.
So, how do you prioritize? How do you identify your most important products and customers?
We start by looking at your data. Using double ABC categorization, we help you to get an overview of your supply chain, and identify the small percentage driving your business forward.
Introducing double ABC categorization
ABC classification has been revolutionized by the introduction of dual−criteria analysis. While the Classic ABC categorization provided only three categories: A, B and C, two variables allow for nine and, more importantly, distinct strategies for each category.
The double ABC consists of nine boxes, each with more homogenous and unique item characteristics. Based on the parameters used in the analysis, a company's most important items (AA items) can easily be identified. This group of items is significant and unparalleled, thus management resources applied to AA items are crucial. On the opposite, CC items have almost no significance and require little attention.
Managing AA and CC items
AA class items are critically important and require close monitoring and tight control. These will typically comprise less than 8% of item count and effect more than 40% of the used criteria.
CC class items require the least attention and control. These will typically comprise more than 50% of item count and effect less than 10% of used criteria.
The larger number of categories, each requiring different management policies, deviates from the simplistic theme of ABC. However, standardized policies can be applied to multiple classes − resulting in nine classes with, e.g., four different policies.
Taking it further
More advanced categorization of items can be conducted, e.g., multi−criteria classification (AAA items) or special classes (New Items). Using ABC Analyzer, it is easy to design a categorization that fits your organization.
Read more on how we can help you optimizing your business using ABC.