Never run out of your always-selling, cheap products. It’s simply not worth it.
Your CA-products are the products in the lower-left corner of the classic ABC matrix.
- Sold frequently and in large amounts (They scored an “A” in order lines)
- Your profit is low (They scored a “C” in turnover)
- They cost you next to nothing to keep in store
- Buy these products “too frequently”, and the profit is eaten up by your handling costs
- Your customers except them to be available, just like you expect your supermarket to have bought enough milk
Stock-outs on these products are highly annoying for your customers – and impressively cheap for you to avoid
Use the KPI tab
Create KPI boards for:
- Item numbers + no. of back orders
- Order lines 12 months + %
- Stock value 12 months + %
In ABC Analyzer it will look like this:
- Your have 344 CA products
- 143 back orders
- They account for 9 % of all order lines, that’s almost every 10th order line!
- .. and the stock value is less than 2 %
Why annoy customers with stock outs on CA products? You can double their stock value and none of your colleagues will notice it!
Avoid stock out’s in the future
- Check minimum in your ERP – it might be too low
- Buy larger quantities, it should cover at least half a year’s consumption
You save the handling costs and your customers are happy!