ABC Inventory Classification System

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The original commitment date can refer to a range as opposed to a strict date that is acceptable to the customer. Besides, measuring the frequency of accepting the customer’s original request date, vs. commit date, can be a useful measure of the overall customer satisfaction.
Several SCOR diagnostic metrics exist and can be used to focus on improving the delivery performance. Some of these include: o % Orders Scheduled to Request o % Orders Shipped on time o Carrier Performance Reliability
In order to improve Delivery Performance to Customer Commit Date, the following practices should be applied:
- Distribution planning
Cf. % of Orders Delivered in Full
- ABC Inventory Classification System
The ABC inventory classification system is: o 'A' …show more content…
ABC inventory classification will simplify the rules for planning and procurement as corresponding rules are defined not for individual materials but for all A-parts, B-parts, and C-parts.
According to apics-redwood.org and eazystock.com, ABC analysis provides the means for identifying the parts that make the largest impact on a company’s overall inventory cost performance. Different controls are used to improve the overall inventory performance: o ‘A’ items have tighter controls on inventory records and more frequent reviews of forecasting, demand requirements, order quantities, safety stocks, and cycle counts. o ‘B’ items have reviews less frequently than ‘A’ items. o ‘C’ items have the simplest controls. They are only important if there is a shortage of one of them. They can be ordered in larger quantities and have higher safety stocks.
- By focusing efforts on higher value inventory, a company can assign more appropriate resources to acquire the optimum inventory levels, reducing inventory costs, and ensuring that customers’ needs are met and orders delivered on time.
- Demand Planning
Cf. % of Orders Delivered in Full
- Supply Chain …show more content…
In-transit, visibility can show if there are any delays or potential shipping issues such as customs (when DCD exports to the USA for instance), weather delays, or other areas where the return process may be off schedule.
Different technology can be applied to the electronic tracking. The simplest form is barcoding, 2DBarcoding and Unique IDentification (UID), and through the most sophisticated which Active Radio Frequency IDentification (RFID) or Auto-ID data capture (AIDC). Regardless of the kind of electronic tracking used, an information technology system must be set up to track item locations as they are scanned in through the supply chain and display the item location to managers.
More sophisticated systems can be set up to do automated analysis of information to immediately identify potential issues. An example is to review transfer cycle times to see if they fall within a certain time limit, and if they are outside that range then a supply chain analyst would be notified to find a resolution. Setting up business rules and notifications within the tracking systems helps to automate the return process and reduce required
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