ABC(D) analysis

Assortment planning and management is one of the most important processes in retail business. Companies that do not invest time and effort into assortment will look outdated and not trendy in customers eyes.

The first thing that should be done before planning the assortment is to “measure” and assess, track your product range. There are different assortment assessment tools, and one of them is the ABC(D) analysis, the method which categorizes the importance of products or SKUs. ABC(D) analysis allows you to range your goods starting with the most (A-class) to the least (C- or D-class) important and valued. Importantly, the criteria for this assessment are custom and differ from one company to another.

If your company is using the ABM Inventory, the whole procurement and reordering process is automated, your managers can free up time for more challenging tasks. ABM Inventory has a built-in ABC(D) analysis module, that means you can set coefficients (in %) for all your product categories (and decide, if you are using additional D-class or not), add the extra data fields and manage an integrated flexible real-time reporting function. ABM Inventory can fulfill all customer needs. The system keeps record of all goods movement, activity and statuses for the last 3 months and analyzes them producing a detailed report on the first day of every month.

Each item in company’s inventory can be assessed according to its consumption value, value for the overall profit, margin or sales volumes. This selection depends on company’s business strategies or current business needs. The company may also set custom classification rules and take either all inventory as 100% or only the particular stock list inventory.

The report has two sheets, the first one presents 2 visual graphs. The upper one shows the goods and goods’ categories based on the sales volumes across the whole network. The lower image shows the goods’ categories based on the sales analysis in a particular location (store).

ABC(D)-analysis

ABC(D)-analysis (1st page)

Additionally, the page contains a Movers column, which shows the information on new products (marked NEW), or those that are taken out of the assortment (marked as OUT). There is a Stock at the end of the month (money equivalent) column and Residual on the sale days (days equivalent) which allow to quickly measure the leftovers for the particular products.

ABC(D)-analysis

ABC(D)-analysis (1st page, expanded lower table)

The second page has expanded data on warehouse (stores) inventory. Like the previous one, this page also has Movers and Residual at the end of the month columns, but there is another, even more interesting info. Here you can track the dynamics of product category change, for example, a movement from one category to another within 2 past months. You can view total sales (returns included) for the last 3 months in quantity and money equivalent, as well as product turnover rate. Additionally, you can review the pairwise comparison of sales levels within last months, as the system automatically highlights negative dynamics in red.

Product data

Product data

The information and analytics provided by the ABM Inventory helps to take well-grounded decisions and take slow-moving goods out of the assortment or expand the top-selling products range across the whole network.

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