Warehouse Wizard Series Part 5: The Advantages of ABC Analysis

Most inventory-based businesses have some sort of item classification, but it tends to be relatively basic. We often see classification based on a basic cost analysis or how fast the item moves. These are helpful, but they become even more valuable when combined.

This is the idea behind the concept of a “Classification Matrix”. And the real benefit here is being able to focus on the most important items in your warehouse, as made visible by this 9-box matrix. Here’s an example:

Your IMS should help you create this. The matrix above is even color coded for additional help in understanding which items are most important and deserve the most attention.

There are lots of advantages to this process. Read more…The Top 5 Reasons You Need to Institute an ABC Analysis and Classification Matrix.

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