ABC XYZ Analysis for Inventory Management: Example in Excel (Full Tutorial)

The ABC Analysis is a good start, but it's not good enough to classify your products and optimize your inventory.
Here are the 2 classic mistakes I have made for many years ⛔️ :

1) High Safety stock on A codes, to protect our top sellers
2) Low Safety Stock on A codes because sales volume is high, so they seem more predictable

We have the opposite mistakes for C codes:
1) High safety stock because these items are unpredictable
2) Low safety stock because we don't want to cover low selling items

Whatever the approach, the result is the same:
Too much inventory and shortages at the same time 😭

That is why I want to introduce you to the ABC XYZ Analysis.

In this new step-by-step tutorial video, I tell you:
-Why the ABC analysis is not enough
-How to define the demand uncertainty XYZ
-My step-by-step tutorial in Excel with examples
-How to combine ABC XYZ Analysis with Safety Stock
-What the limitations of ABC XYZ Analysis are
-The action plan to start optimizing your inventory TODAY 🚀

In the comments, let me know what you think of the ABC XYZ analysis. Is this method good enough? ;-)

I am always grateful to receive your comments and feedback to improve my pedagogy 😁

Edouard

▬▬▬▬▬▬▬▬▬▬▬ CHAPTERS ▬▬▬▬▬▬▬▬▬▬▬▬

ABC XYZ analysis in Excel:

00:00 Intro: ABC Classification is not enough
00:38 ABC Analysis: quick reminder
01:24 2 common mistakes
02:29 Demand Uncertainty
03:04 ABC XYZ Analysis Matrix
04:56 ABC XYZ Analysis: example in Excel
08:20 ABC XYZ Classification limits
9:05 Conclusion: Is ABC XYZ analysis good enough?
10:05 A great Supply Chain education tool
11:12 A great Crisis Management tool
12:13 Your Action Plan
13:18 Free Inventory Management Workshop

#supplychain #inventorymanagement #abcxyz

[aakashniteshkumarpatadiya]

I am 3 weeks into my first ever job as supply chain analyst and this is GOLD.

[juliopena]

Hi Edouard. Thanks for sharing those impressive IM tutorials. Very useful not only for those who are starting on the supply chain but also for those not too familiar with the topic.

[sound-engineer]

Wow. I just discovered this very underrated channel. I can't wait to watch your free cources. Thank you so much. You got my subs.

[kabirhussain]

🎉🎉🎉 You are great and thanks for your efforts ❤

[jajatikesharidev]

Hi Edouard, the tutorials are quite helpful. In this video you have mentioned about the 2nd method but its not covered in the video and I have not been able to find it in other videos of your. It would be quite helpful if you can share the 2nd method as well.

[pekandras]

Great explanation, well done. I myself opt for a lower SS on "AX" materials as those are expensive and due to predictability the business can give good enough service level without needing to tie up lot of cash. Sure companies can have different lead times and agreements which need alternative stock keeping strategy.

[danielcordova]

Great video. Exist some difference between the use of standard deviation of a sample and standard deviation of a population in the formula? Which is better?

[cocochang]

Thanks a lot, Edouard! Great video and it's very easy to understand and follow through it. I just keep watching one after another!!! Very addictive! I realized this tool is no longer available when I tried to download it. Can you please make it available again? Really appreciate it!

[jamesrudary]

Thank you so much for your videos!! They are very inspiring! My question is, when performing ABC xyz analysis, should we be using monthly dollars booked (incoming sales), or monthly sales (outgoing sales)?

[frankandersendk]

Hi Eduard. Thanks for some truly great videos.
Do you have any rule-of-thumb regarding the percentage of items which should be classified as X, Y and Z?

[dg]

Does your course come with the full access to your excel database/dashboard? I'm thinking of signing up for you course. This is great information. I appreciate your sharing and educating.

[fenixchow]

very good video, thank you very much!

[alamRizvi-sjbj]

really helpful videos. thank you for educating

[vasudevnarayan]

Thanks a lot Edouard for sharing the knowledge in a very clear way. It is really a great starting point for me to step into supply chain domain :).

[Ale-jjjk]

Great job, many thanks Edouard. I have a question: when you have to analyze 4000 items, with different units of measurement (pcs, Kg, etc), how do you do the ABC classification on the quantity consumed?

[paf]

Hi Edouard, thanks for your series of videos which I find very helpful. I have a question on your table @11:12. My understanding of safety stock is that its purpose is to cater for unexpected situations (like volatile demand), so I'm surprised that you are suggesting high safety stock for AX and low safety stock of AZ. I was expecting it to be the other way around. If the demand is predictable like it is for X materials, shouldn't you be able to reduce your safety stock?

[danielhoraciocordovazambra]

Great video!
I have some doubts. If I work at supply management I should make the global ABC XYZ analysis by costs or quantity to use(units, kg, etc) of the insums and materials used for production? On the other hand I should do the analysis according the type of insume for example ABC XYZ analysis for colorants wich uses 0, 01 kg per ton according the colour. Other ABC XYZ analysis per fragances wich uses 20 kg per ton and so on.
I am looking forward for you reponse. Thanks a lot.

[tiagra]

Great video. I am graduated in management engineering, and i found your video very useful!

I perfomed the ABC XYZ analysis on my
company's item !

I have some issues related to the coefficiente of variations : our demand Is affected by High seasonality

How could we deal with It?

[splattrick]

2 videos into this absolute masterclass of a channel and I am blown away! Thank you so much for explaining complicated concepts so clearly! I have a question, when you were talking about standard deviation in this video as a way to measure how fluctuative a particular product is, the column next to it is called "coefficient variation" and there is a percentage number, how is that calculated? I did a rough test and could it be Std. Dev/Average Sales? Anyway I will be watching the rest of the videos in this channel now, thank you so so much for the amazing material you've put up Mr Edouard!

[muizbarok]

what a great lessons, may i get file at 8:20 sir for full view procuring base on EOQ 🙏thanks a lot