Recently the method of parts inventory management generally uses the ABC classification method, the full name should be the ABC classification inventory control method, also known as the material key management method.
The basic principle is based on the fact that there are a few materials in the inventory that occupy most of the funds, while most materials occupy very little funds. Using the law between inventory and capital occupation, the inventory materials are consumed according to their consumption quantity and value. Sorting and queuing; the one with small quantity and high value is called type A, the one with large quantity and small value is called type C, and the type between A and C is type B, and then different management methods are adopted respectively. Its control is the ABC classification method.
Class A materials should be listed as the key objects of material management, and the control method of regular ordering shall be implemented. Strict requirements shall be imposed on inventory counting, delivery period, and delivery. For Class C materials, they are defined as the general objects of material management, and a more extensive management method is adopted. That is, the control method of quantitative ordering can appropriately increase the amount of insurance reserves. For Class B materials, companies can choose comprehensive or continuous and regular control methods according to their material management capabilities and levels.
Division method
There is no fixed standard for the classification of ABC categories, and each company can determine it according to their specific circumstances. The boundaries of the three categories are also determined by different specific circumstances. The operation method of A ratio classification is very simple, only need to grasp the variety identification, annual average consumption, unit cost of all inventory, and then perform arithmetic operations to complete. Generally speaking, for items listed in category A, the usage amount does not exceed 20% of the total amount, and the usage amount accounts for more than 70% of the total amount; for category B items, the usage amount does not exceed 30% of the total amount, and The usage amount accounts for about 20%; the usage amount of category C items is more than 50%, but the usage amount only accounts for less than 10%.
Suitable Users
ABC classification management can be used for inventory management of all types and forms, and this method has a common guiding role for the classification of a large number of aggregates, and it also has a common law that can be followed for the research of general social and economic phenomena. It is mostly used for inventory control and product control in enterprise management. It is worth noting that the ABC classification method is generally based on the value of inventory funds, so it cannot reflect the degree and indicators of inventory types, urgency, etc., and in some cases, the shortage caused by category C inventory is also It may be very serious, and managers should pay full attention to the actual application of the ABC classification method. Generally, adjustments can be made on the basis of classification according to the value ratio, taking into account the loss of stocks, the difficulty of purchasing and other factors.
