Classify inventory into A, B, and C control levels and explain why different governance is necessary.
The move: match control effort to consequence, not to SKU count. ABC analysis usually starts with annual usage value: unit cost multiplied by annual demand. That ranking exposes a common pattern: a small share of items carries a large share of inventory value. In materials management, add a second lens: operational consequence. A cheap gasket with a 16-week lead time and no substitute can behave like an A item even if its dollar value is low. Use three control postures. A items get tight records, frequent cycle counts, supplier review, and visible reorder triggers. B items get regular but lighter…
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