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ABC Analysis - based on annualconsumption.

XYZ Analysis-Left out stock value

VED Analysis - criticality for

production.FSN Analysis - consumption rate.

HML Analysis - weight / cost permit

SDE Analysis - availability.SOS Analysis-based on seasonality

GOLF analysis-based on suppliers

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ABC ANALYSIS CONTD

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ABC ANALYSIS CONTD

Control is better

Permits selectiveinventory control

Risk fewer stocks outs

Reduces investments

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This classification is already

based on valueof material

actually held on stores atagiven time

It helps to control average

inventory value of focusingeffort to reduce the inventory

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X items are those whose value of

left out stock is very high.

Y items are those whose left-outstock value is moderate.

Z items are the residual items,

whose left-out stock value areneither high nor moderate.

Materials managers, based on

such analysis, can plan not onlyfor procurement but also for

secured storage of items.

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VED ANALYSIS

V-Vital

E-EssentialD-Desirable

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VED ANALYSIS CONTD

The Inventory policy has to keep atleast one number of the vital sparesirrespective of its value.

Also, spare parts should be supplied tothe foreign manufacture as the arealso treated as vital spares because oflong lead time.

The desirable spare parts are thosewhich is not available can beemanufactured by the maintenance

department.

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FSN ANALYSIS

Fast-moving (F),

Slow-moving (S) andNon-moving (N)

items.

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Past consumption

patternF-S-N analysis is useful

to control obsolescence'sof raw materials,

components, tools andspare parts.

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HML ANALYSIS

High value (H),

Medium value (M) and

Low value (L) help in bringingcontrols over consumption at thedepartmental level.

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SOS ANALYSIS

S- Seasonal Items

OS non-seasonal Items

It may be advantageous to buy

seasonal items at a low prices andkeep inventory or buy at a high

price during off seasons.

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Example: in case of sugar mills whoseprocurement is seasonal, these companies

need to procure their requirement for alonger duration so as to adjust theirproduction plans. Green tea leaves areavailable for a longer duration from

February to October. Non-seasonal itemsare available throughout the year withoutany major price variation. Since seasonalproduct, which are available for a limited

period, are procured in bulk to manage theproduction process throughout the year.

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It is similar to SDE analysis, and it isbased on the nature of market andsuppliers. Suppliers or Vendors are

classified as under:

G-Government

O-Ordinary or Non-governmentL-Local

F-Foreign

G-O-L-F ANALYSIS

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All these suppliers have their

own payment terms, ownadministrative procedure andsoon. For a materials

Manager, therefore, it isimportant to keep in mind all

these issues to functionefficiently and smoothly.

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