In order to make a decision about which of the three products to use in a given situation, an organization must assess a number of factors, such as the cost of a product, the availability of the product, the ease of access to the product, the need for the product, the ease of disposal of the product, and the ability to use the product effectively.
It looks like the ABC analysis of an organization’s on-hand inventory is the most common way that organizations use product information. It’s also the method used to determine the class of each product based upon the product’s most common usage. In other words, it’s the method used to make the decision about which product to use in a given situation, not the product itself.
One of the big issues I see in many companies is how they decide which products to use in a given situation. The first step is to try to identify the products that are most commonly used in a given situation. The next step is to determine the most common usage of that product. The third step is to determine the class of the product based on the usage. The fourth step is to determine the availability of the product to the users.
The problem with using this method is that it doesn’t take into account the different situations, the different companies, the different product lines, or the different business sectors. You end up with a list of products that most frequently appear in a given situation that could be used in a different situation.
I am not suggesting that you have to use a traditional method of on-hand inventory, but rather dividing your inventory into categories based on the product’s usage. I have used this method myself to divide an organization’s on-hand inventory into three levels based on common usage. I then determined the class of a given product and the availability of the product to the users.
This is a great method to use if you need to divide your inventory into classes based on common usage. Not only will you know about your products, but you will know which products are in the most demand and which are not. And you don’t have to use a spreadsheet to do it, but it can be done in a spreadsheet.
One of the most common questions I get from the tech community is whether or not to divide our organization’s inventory into classes based on common usage. I’ll go ahead and say that I do not think that dividing inventory into these three classes is ideal. I can see how a spreadsheet would help you here, but I would argue that it is not a good idea for two reasons.
First, it is impossible to do a meaningful analysis of inventory in a way that is meaningful to your customers (you, the organization). As a general rule, the more inventory that your organization has on hand, the less valuable and expensive it is to your customers. You should only divide inventory into classes based on how you expect it to be used and not based on how it is actually used.