ABC/XYZ Analysis

Business Problem

Managing a product portfolio demand and supply is complex and challenging. Understanding demand importance and variability is inevitable to better manage resources and achieve the right focus and customer satisfaction.

LOGIBLOX Solution

With LOGIBLOX you get a great template to conduct ABC/XYZ analysis with ease and derive valuable actions. By combining the ABC and XYZ segmentation analysis, companies can gain a more comprehensive view of their goods and better understand their customers' needs. Unlike the traditional three-category ABC analysis, the ABC/XYZ analysis provides nine categories for classifying materials, goods, and consumption. This analysis is especially crucial in material management and helps optimize inventory in the long term.

This method provides a more detailed view of an enterprise's product assortment and allows for tailoring the assortment more specifically to the market's needs. With precise sales analysis, even articles with unforeseen sales can be quickly identified and taken into account. Combining both methods is an effective tool for rationalizing inventory and achieving an optimal ordering rhythm for products, which can prevent excessive capital commitments and write-offs. The combination of ABC and XYZ analysis establishes a link between the value of individual goods and the temporal need or consumption process of each item. From this, valuable insights can be drawn for future assortment planning.

Here are the nine classifications at a glance:

XA: High value items with continuous demand

XB: Medium value items with continuous demand

XC: Low value items with continuous demand

YA: High value items with intermittent demand

YB: Medium value items with intermittent demand

YC: Low value items with intermittent demand

ZA: High value items with very rare demand

ZB: Medium value items with very rare demand

ZC: Low value items with very rare demand

With ABC / XYZ on LOGIBLOX, it`s very easy to:

• Focus on the most important products / materials / items
• Identify optimization potential
• Control and plan operational processes in a targeted manner
• Improve operations efficiency
• Control profitability within the company