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  • Tool Box Talk - ABC Management

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    Hesham Mahdy
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    ABC classification divides inventory into categories based on cost and usage. "A" items represent 10% of parts but 70% of inventory value, are critical, and require close management. "B" items are 20% of parts and 20% of value. "C" items are 70% of parts but only 10% of value. ABC analysis guides cycle counting, obsolescence decisions, storage location, and minimum/maximum levels to focus on high-value "A" items first. The tool provides data to identify critical parts and those needing attention, but its use requires employee understanding to avoid fear and gain buy-in for effective decision making.

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    ABC classification divides inventory into categories based on cost and usage. "A" items represent 10% of parts but 70% of inventory value, are critical, and require close management. "B" items are 20% of parts and 20% of value. "C" items are 70% of parts but only 10% of value. ABC analysis guides cycle counting, obsolescence decisions, storage location, and minimum/maximum levels to focus on high-value "A" items first. The tool provides data to identify critical parts and those needing attention, but its use requires employee understanding to avoid fear and gain buy-in for effective decision making.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    11 views1 page

    Tool Box Talk - ABC Management

    Uploaded by

    Hesham Mahdy
    ABC classification divides inventory into categories based on cost and usage. "A" items represent 10% of parts but 70% of inventory value, are critical, and require close management. "B" items are 20% of parts and 20% of value. "C" items are 70% of parts but only 10% of value. ABC analysis guides cycle counting, obsolescence decisions, storage location, and minimum/maximum levels to focus on high-value "A" items first. The tool provides data to identify critical parts and those needing attention, but its use requires employee understanding to avoid fear and gain buy-in for effective decision making.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Tool Box Talk – What a

    Maintenance Manager Needs to


    Know About Managing the
    Maintenance Storeroom Using
    ABC Classification

    What Is ABC Classification? WARNING:

    Inventory is divided into categories based on the cost of “Drive out fear, so that everyone may work
    a part. “A” items represent about 10% of your stocking effectively for the company.”
    part numbers, and 70% of the inventory valuation. “B” – W. Edwards Deming, PhD
    items represent about 20% of the part numbers, and
    20% of the inventory valuation. “C” items represent We never want our employees to fear any actions we
    about 70% of the part numbers, and 10% of the take as managers. If ABC analysis is to be utilized for
    inventory valuation. decision making, its implication needs to be understood
    as to why an action is taken and how the decision is
    Guiding Principles of ABC Management made.

    ABC Management is used to guide the storeroom in: Do not follow the “just do it” approach. The storeroom
    and maintenance personnel need to buy in to the
    1. Selecting parts for cycle counting process and understand how to use it properly to assist
    them in decision making.
    a. “A” items are counted each month
    b. “B” items are counted every six months What Does the Data Tell Us?
    c. “C” items are counted every year
    By classifying parts with ABC, the storeroom manager
    2. Selecting parts to obsolete through the cost of a more easily defines:
    part number and classification. “A” items are 1. Criticality – “A” parts being the most valuable are
    most valuable and represent more dollars to the first target of the storeroom in identifying
    scrap than a “B” or “C” item, which has more critical parts. Reliability engineering and planning
    effect on the bottom line. and scheduling reinforce the selection of a
    critical part based on its hierarchy.
    3. Selecting areas to store parts in the storeroom.
    2. Parts needing attention in the storeroom – “A”
    “A” items are the most valuable and stored in an
    parts are the most valuable and need to be in
    area where they are more visible to the OEM (Original Equipment Manufacturer)
    storeroom supervisor. “B” items are next, and condition while being stored. This includes items
    “C” items are stored more randomly. This is such as electric motors, gearboxes, circuit
    significant when reorganization of stores is boards, critical bearings, etc.
    needed.
    ABC Management is an effective tool for the
    4. Setting criteria for Min/Max. The order size maintenance storeroom.
    (difference between the Min and Max value) can
    affect its determination by using ABC
    classification.

    If you have questions or need any type of assistance, GPAllied


    4200 Faber Place
    please email: ddewald@gpallied.com Charleston, SC 29405
    Office (843) 414-5760
    Fax (843) 414-5779

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