What is the ABC XYZ analysis for?

In order to understand what the ABC XYZ analysis is for, you first need to know: what is it? First of all, it should be noted that these two analyzes are applied in various business structures, for example, such as restaurants, shopping centers, alcohol companies, etc.

These two computational assistants help identify the problem areas of the enterprise, plan actions, raise the cost of the goods in good time, and protect the company from future mistakes. So, what is ABC XYZ analysis ?

ABC analysis is the process of classifying goods and enterprise resources into groups, according to their level of significance. This analysis uses the well-known Pareto principle. At the heart of this principle is the axiom: 20% of the total product gives 80% of turnover. In particular, this rule can be applied to ABC analysis as follows: quality control of 20% of the company's resources, brings 80% of the control of the whole system, in general, it can be products, equipment, raw materials, etc. What is needed and how is this method of analysis used ?

For example, in a fast food restaurant or cafe, ABC analysis is most often used, it is needed to "sort everything out" and determine the share of the goods in the turnover of the enterprise and to calculate the percentage of goods in the profits of the restaurant. A special table is displayed in which it is necessary to enter: the quantity of product sales per month (six months, a year), the cost of goods and the selling price. Using a certain formula, you need to order the goods on a scale from min to max. Then, using this formula, determine the share of the goods in circulation and the percentage of the share of the goods in the profit of the enterprise. After that, the table will give us the data of each product and the scale of their importance in terms of turnover and profit sharing. The scale is called "Increasing total", it builds from 1 to 100. If the assortment group on this scale falls in the interval from 1 to 50, then this is group A, if in the interval from 50-80, then the goods in group B, well in group C products are located in the range from 80 to 100. Goods that are in the group A and B have a large turnover and bring the company a good percentage of profits, but those categories that are in group C, they should be worked on, raise demand And turnover, or withdraw them from sale. According to statistics, the categories that are in group C for more than six months are eliminated.

The XYZ analysis is the classification of stocks. Forecasts consumption, the nature of changes and the needs of stocks. A certain analysis algorithm is built up, including calculation of the coefficient of variation, grouping from min to max, distribution by groups XYZ, image result on the graph.

Most often this method is used in large enterprises where there are warehouses and logistics center, which conducts XYZ assortment analysis, investigates, evaluates logistics and customers of the company.

What is included in the groups X , Y , Z ?

Group X includes the main stock items with a variation factor of the statistical sequences of shipments - 25%. These resources, which are consistent with a stable consumption, require an accurate forecast in the consumption.

In group Y there are the same nomenclature items with the coefficient of variation and have a statistical series of shipments of 25-50%. In this group of resources it is necessary to determine the need for them, these can be seasonal products (beer, water).

Group Z carries a stock of statistics with more than 50%. This group is characterized by irregular consumption of resources and inaccurate forecasting. If you combine ABC XYZ analysis, it will show a more accurate table of consumption rate and rate of shipment.

Analysis of ABC XYZ works best in pairs, to more accurately assess the effectiveness of the enterprise. This is the most powerful internal weapon of the company, setting it at the heart of business management priorities, you can identify key points, save important company resources and capture the lion's share of the market.