In Logistics, it is customary to speak of many ABC segmentation rate (sometimes called simply CA): ABC of entries, Stock ABC, ABC outputs, customers, and that breaks ... that does not give much information. In this article we will try to clarify that ABC segmentation and how it's done.
ABC A segmentation is a tool that helps us focus on what is most important. It really is an application of the Pareto law, or the law 80/20. This law says that "20% of something is always responsible for 80% of the results is that 20% of something is essential and 80% is trivial. For example, if we talk about sales, 20% of products account for 80% of sales and the other 80% only represents 20% of sales. So the first 20% of products are the ones who should be most important for the company. This law is based on empirical knowledge and do not always follow them exactly. Sometimes it is 80/20 and is 80/30...depende of each particular case, but there is a "little" representing a "lot"
For ABC segmentation, which is usually done is defined as:
Class A is the% of that something (eg products), which represents 80% of the results (ie sales)
Class B: the% of that something (products), regardless of class, which represents 15% of the remaining results (sales)
Class C: the rest of% of that something (products) without considering the class A and B to represent the result left: 5%.
When we talk about AC segmentation what is often considered is that CLACE C is the set of class B and C above. That is, A accounts for 80% of the sale and C 20% (Law 80/20).
Redial, that the ABC is always considered a given period. For example, I can do an ABC sales every 6 months where I check which were the products A, B and C in that period (The classification may change if we consider an earlier or later period.) The ABC is both a period associated.
Later, we will show a video / screencast as this is done using Excel while we explain in a more applied, but for now we will see some applications:
Shopping:
shopping is widely used in the ABC reference / purchase price (amount purchased in the period by the unit cost)
References A: represent the references that account for 80% of the value (€) total purchased. These references are in you have to focus the purchasing department, as very few references (about 20%) and any action to make on them will have a major impact on the result of purchases. Typically try to negotiate great prices, try to have some stocks of these references (being very much money would be inmovilidado), seek partnerships with suppliers to try to reduce the overall cost ...
References B: represent 15% of the value and while not as important as the A, must try to control them. For example, establishing a proper frequency of orders, making a deal with suppliers with a lower frequency than the reference A. ..
References C: are the "commodities" representing only 5% of value. The purchasing department is unaware, stock associates a minimum and the system alerts you when you come to order.
used Another ABC ABC shopping is a supplier, where it could be that 80% of quality problems or incidents are caused by 20% from suppliers. In some companies this is known as the ranking of suppliers "
Inventory Management:
For example, an ABC of stocks (both in money in coverage), which references are definiento more money "immobilize" or references are those that have more coverage (days of inventory). Many times what we usually do is Matrices ABC (when parent is usually AC) which is also called cross-ABC. Ultimately what is done is to cross the two ABC results for each quadrant and implement different strategies for each quadrant. For example, a reference that is AA, A in coverage (coverage is very high) and A in stock value, requires an urgent strategy to lower inventory days of such a reference as we have much more than we need and stock is very expensive.
in inventory management are used to define other cross ABC strategies, depending on the value and demand variability, or between the rotation of the reference and demand variables but we let them to a second paper.
Store:
can also use several types of ABC, but most important is the ABC of cumulative output line (picking) by reference. This is usually the most important because most of the costs of a store (about 40-45%) is usually in the order picking tasks. In the preparation of orders, the "cost-driver is picking line, which is requiring a journey to catch a lot. It is much more expensive to go 100 times a day to take a drive in a reference to go 2 times to get 50, so they use lines and no units. When you have many references is essential to define an ABC so that:
References A producing 80% of output lines are in place quick and easy (ergonomics) accessibility. (For example, dynamic shelves with Pick-to-light)
References B, accessibility media.
References C, often a very large number of references which produces only 5% of the outputs, which are generally put in an area part, picking racking (minimizing investment) and where what is usually sought to minimize the space occupied
Source: lrmconsultorialogistica.es
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