In manufacturing goods is often based on the value and importance of the ABC classification of the items used to manage. When a business use to a lot of items, the item classification is an effective management approach, for example, inventory checks can focus on objects and ignore A Class C Class items; in the analysis of safety stock setting of a reasonable, A first assessment should be re-assessed categories of articles last C class items.
1. ABC classification of the general approach
The most basic classification is based on the current inventory to calculate the amount and classification of inventory table, for example, if the business principles set ABC Category: 75,15,10, that is, 75% of the value of the inventory items belongs to A class, 15% of the value of the items belong to B, 10% of the value of the items belong to C class. Based on these basic information, you can follow these steps to carry out calculation and classification:
 beginning with the largest amount of all items according to their order;  calculated the value of each item the proportion of the total value, and calculate the ratio of total value;  According to the ABC classification principles have been identified, compared the cumulative value of each line item to determine the proportion of their respective categories.
Different companies can use different methods, according to the results of different methods of calculation are not the same. The calculation process is only one way for ABC classification, this method is the simplest one classification method, because the inventory information is relatively easy access is also more accurate. However, if a company's goods consumption is very uneven, often used in many new items, and some old items no longer needed because of the sluggish stock items will be, in this case, as with the stock balances Lai ABC classification becomes the basis for calculation is not appropriate, then we can adopt another way. Here we analyzed several different ways:
To a period of time in front of the consumption amount calculated on the basis
This approach is not to balance the value of inventory items is calculated based on, but some time before the actual value of the goods consumed in the calculation basis. Assume that "earlier time" refers to "the month", then the calculation is as follows:
 The amount of all items by issue month (month to issue the balance amount of X month price) from big to small order;  start from scratch, the value of each item the proportion of the total value, and calculate the ratio of total value; [ 3] According to the ABC classification principles have been identified, compared to the cumulative value of each line item to determine the proportion of their respective categories;
The two calculation methods produce very different results, for example, if a particular item to calculate the amount of inventory balances, are C class articles, and in accordance with the previous period to calculate the actual amount consumed, but became A-class articles.
To the needs of the next period of time is calculated based on the amount consumed
This method is not inventory to see what is not is to look at what happened in the past consumption, but rather with how the needs of the future. Calculation: The items in the future need to consume the amount of time (month balance of the price X for some time need to consume the quantity) is calculated on the basis, then the ratio under the various items to determine their share of the amount of ABC classification.
2. Companies do pay attention to what ABC classification
Several listed above ABC classification calculation methods, different methods lead to different results, this is normal is correct. Manufacturing businesses in varied management needs are also different. Some companies concerned about information in accordance with the consumption of the past reserves of materials, but also some companies pay more attention to customer orders directly to demand-pull on the material, in different situations, companies can determine the most appropriate method own ABC. At the same time, companies do pay attention when ABC classification of the following:
Reasonable to determine the respective proportion of ABC classification
Some enterprises have set the ratio of ABC: 80,15,5, and the enterprise as: 70,20,10. We say that ratio is only a "gauge", is according to the needs and goals set. Even a business division of the ABC is not just three, while the use of the ABCD four categories, these are possible. The so-called ABC classification, only provide a way to ABC is not limited to only three.
ABC classification key to determine what basis
Is based on the actual situation can be designed according to business, not single, not static. If an enterprise should not only take into account the current stock value, we should also take into account future demand, then also a "weighted" approach, the ultimate goal is to really express the results of ABC classification of the actual situation of enterprises to meet business management needs.
But also to determine the validity of ABC classification
Enterprises in the daily operation of the process, will continue to produce all kinds of information and is sufficient to affect the classification of ABC results, keep sending and receiving data such as inventory changes have been planned to demand information are constantly changing, we can say: at any time to re-run the ABC classification calculation process, the classification results will be produced and the last one was different, in this case, we need to keep a stable ABC classification, re-calculated to determine the cycle.
3. ABC classification of the role of
ABC classification is in accordance with the enterprise value and importance of the items were classified in the articles have focused on management, for example:
To cut costs, as the cost of compressed A class of goods or the purchase price, and find ways to reduce the loss rate of A Class articles
A class of single articles may be of great value, single value may be small but significant consumption, therefore, reduce its cost or the cost of the purchase price for the total decline is obvious effects.
If you want to compress stock funds, on the possible cost of compressed A class of goods or the purchase price, and find ways to reduce the number of A class of stock items
A class is the number of items not priced high, so the total amount will be higher, so stock funds should be compressed to the compressed A better way is to type the cost of goods, purchase price and inventory, this is an easy effective way.
If you want an accurate inventory records, then the strategy can make use of cycle counting Class A inventory items are high-frequency
Inventory of the traditional methods of business are the following defects:  inventory, the transceiver operation to stop (closing inventory);  important inventory items and important items is the same frequency. Now many businesses have adopted the strategy of the cycle inventory, items can be set after the ABC classification of inventory cycle provide the basis for the frequency.
If you want to consider the security of supply, when considering capacity and stability, but also concerned about the A class of goods as before
In terms of supply security, the supply of some items may take some preventive measures. Therefore, enterprises need to consider the general class of objects A, A class of materials as possible to enact preventive measures to ensure security of supply.
ABC classification is a strategy, the key point is to use ABC to express the different importance of different items in order to better target enterprise management.
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