What needs to be finished first
A complete list of items to classify is available with a numeric value per entry (revenue, volume, frequency).
What needs to be ready before start
Spreadsheet with columns Item, Value, cumulative value, share, class; short policy for threshold definitions; diagram template for Lorenz curve or bar-line plot.
One analyst who prepares the data; one domain owner per affected class (procurement, sales, or operations); one decision maker who approves the class consequences.
Classification objective (inventory management, procurement, customer prioritization); standard thresholds in the company (for example 80/15/5); special groups that must never be reduced.
60-90 min
Load the data into the spreadsheet, sort descending by value, and calculate the cumulative share. Store threshold values as constants at the top so reclassification remains traceable later.
The one question this method answers
Which items belong in A, B, and C, and which treatment rule follows from each class?
Marker: Sektion
| Step | Duration | Action | Hint |
|---|---|---|---|
1Section 1: Data check | 15 min | Check list completeness, remove duplicates, mark missing values. Document outliers separately, do not delete them. | Entering missing values as zeros distorts the distribution. Better mark them as unknown and move them to a separate U class. |
2Section 2: Define thresholds | 10 min | Set thresholds: typically A = 70-80% share of value, B = 15-25%, C = the rest. Document the thresholds in writing. | Without documented thresholds, the classification looks arbitrary and will be renegotiated in every review. |
3Section 3: Classification | 15 min | Assign items to classes based on the cumulative share. Fill the class column automatically. | If many items with the same value sit on a class boundary, define a consistent tie-breaker rule (for example, oldest items first). |
4Section 4: Treatment rules | 20 min | Define a rule per class: attention, ordering frequency, reporting depth, responsible person. A gets close reporting, C a standard process. | If all classes are treated the same, the analysis was self-purpose. The rule must be concrete, measurable, and different per class. |
5Section 5: Re-review cadence | 10 min | Set the re-review date (quarterly is typical). Define triggers for special re-reviews (market shift, class change above 10% of items). | Without a cadence, the classification hardens and ages. Items move between classes without anyone noticing. |
What comes out at the end
Tabular classification with columns Item, Value, Share, cumulative share, Class, plus threshold policy, treatment rules per class, re-review plan, and optional Lorenz curve as a visualization.
Create a new version per classification period with date, data status, and thresholds. Show class changes per item separately between versions and keep old versions.
Compact working template for ABC Analysis with context, input, output artifacts, and next step.
Classifies items by importance or value into A, B, and C classes.
When and for what do we use this method?
Which data, observations, decisions, or materials are available?
Short notes along the runsheet.
Owner, date, and success signal.
Concrete filled scenario, fictional example
Concrete filled scenario, fictional example
Thresholds: A up to 75%, B up to 95%, C up to 100% cumulative purchasing volume.
| Class | Items | Share of value | Treatment |
|---|---|---|---|
| A | 18 | 75.4% | weekly tracking, single-point-of-failure check, quarterly review |
| B | 47 | 19.8% | monthly reporting, standard contract with clauses |
| C | 247 | 4.8% | catalog ordering, automated approval up to EUR 2,500 |
Example A item: supplier ACME GmbH, EUR 412k purchasing volume, single source for component X. Owner: @maria, next review on 18.06.2026.
Class changes compared with Q4 2025: 4 items moved from B to A (volume increase), 11 items moved from C to B.
Recognize symptoms and steer against them
Class boundaries are shifted to produce politically convenient results.
Fix the thresholds in writing before calculating and document changes with reason and date. Only then classify.
The analysis looks only at revenue or only at volume, and strategic items end up in C.
Introduce a second dimension when strategy matters (for example criticality). Run the result as an ABC-XYZ matrix.
C items are completely neglected and compliance or quality issues remain hidden.
Define treatment for C as well, even if minimal. Standard process plus sampling instead of no attention.
The last update was more than a year ago and A items no longer reflect current reality.
Fix a quarterly cadence and add it as a recurring calendar series. Trigger a special re-review after major market events.
Several items with identical values sit on the A/B boundary and the assignment becomes inconsistent.
Add a tie-breaker rule (for example contract term or lead time). Record the rule in the setup document and apply it automatically.
Done signals checkable in under a minute
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