ABC analysis

How does ABC-logic work?

Logisticar operating models relies strongly on ABC analysis, which is based on the 20/80 rule by Vilfredo Pareto. The main goal of our philosophy is to save time, effort and money for the customer.

What is ABC logic?

ABC analysis can be used e.g. to analyze and classify items, stocks, customers and suppliers. This analysis is based on a supposition that not all items are as important, but are categorized according to different values. Value in this can be sales volume and demand. Based on this classification, it is possible to define product policy for each product group. For example, appropriate inventory levels and closer monitoring for items that have faster turn over or are more valuable than others.

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A general rule regarding ABC logic:

20% of the customers bring in 80% of the sales
20% of the products bring in 80% of the sales
20% of the products are supplied by 80% of the suppliers

Logisticar operating model is based on the 9-class ABC analysis, which is developed based on the 20/80 rule. It can be applied on purchasing, sales, management, inventory and production management, time management of personnel and customer stock control. ABC analysis allows you to categorize your company’s purchases and prioritize both products and customers by dividing them according to consumption and purchases. This can also be applied to different supplier groups.

The main goal of ABC analysis is to find out how much your company can save money by improving its supply chain management and personnel skills. Our job is to show you how to manage your products and items more efficiently. As a result, inventory value and amount of purchased or manufactured items will drop, availability will improve and your business will be more efficient and the profit will be significantly improved.

In brief this is what we can accomplish:

Reduce capital invested in inventories by providing knowledge, expertise and tools to improve inventory control and order planning
Increase the stock availability with lower inventory value
Increase efficiency and reduce transactions and costs in purchasing and production
Support the creation of common reporting and analysis model providing transparency in the whole supply chain

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More information?

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Contact information

Logisticar Oy

+358 50 318 2000

Niittytie 13 A
01300 Vantaa, Finland

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