ABC Analysis in SAP

ABC analysis is a business term used to define an inventory categorization technique often used in materials management. It is also known as Selective Inventory Control. ABC analysis provides a mechanism for identifying items which will have a significant impact on overall inventory cost whilst also providing a mechanism for identifying different categories of stock that will require different management and controls. When carrying out an ABC analysis, inventory items are valued (item cost multiplied by quantity issued/consumed in period) with the results then ranked. The results are then grouped typically into three bands. These bands are called ABC codes.

You can use an ABC analysis to classify characteristic values in order of importance for particular key figures.

An ABC analysis divides items into three categories:

A: Important

B: Less important

C: Relatively unimportant

Domains where we can use ABC Analysis: 

 

Purchasing Information System:

You can use the ABC analysis to classify vendors in terms of the key figure invoiced amount.

 

Sales Information System:

You can use the ABC analysis to classify sales organizations with regard to the key figure incoming order or material or the key figure invoiced sales.

 

Inventory Controlling:

You can use the ABC analysis to classify materials according to the key figure usage value. 

 

Shop Floor Information System:

You can use the ABC analysis to classify work centers in terms of the key figure scrap quantity’.

 

Plant Maintenance Information System:

You can use the ABC analysis to classify object classes with regard to the key figure breakdown duration.

 

Quality Management Information System:

You can use the ABC analysis to classify vendors according to the key figure number of lots not in order.

Strategies for performing ABC Analysis:

http://help.sap.com/saphelp_erp60_sp/helpdata/EN/c1/375b98449a11d188fe0000e8322f96/content.htm

Creating an ABC Analysis:

http://help.sap.com/saphelp_erp60_sp/helpdata/EN/c1/375bd9449a11d188fe0000e8322f96/content.htm

Displaying ABC Analysis results:

http://help.sap.com/saphelp_erp60_sp/helpdata/EN/c1/375bd9449a11d188fe0000e8322f96/content.htm

 

Setting up ABC Analysis in the system for automatic cycle count: 

Transaction Code: OMCO

 

ABC Analysis for cycle counting: 

Transaction Code: MIBC 

 

 

Usage based ABC Analysis: 

Transaction Code: MC40 

 

Requirement-Based ABC Analysis: 

Transaction Code: MC41

 

 You can also select one of the four analysis strategies in MC40 and MC41:

 

1.      Value in %

2.      Value as number

3.      No. of materials in %

4.      No. of materials as number