What is ABC indicator in SAP (LO-LIS - Logistics Information System (LIS))?

SAP Term: ABC indicator

• Component: LO-LIS

• Component Name: Logistics Information System (LIS)

• Description: An indicator that is assigned by the procedure of ABC analysis. The following ABC indicators are possible: A - Important B - Less important C - Relatively unimportant According to these criteria, "A" materials are those materials that are of greatest importance for the production operations of a company. Examples of use for ABC indicators are vendor master records, material master records, and master records of technical objects.

Smart SAP Assistant

• Key Concepts: 
  The ABC indicator is a feature of the Logistics Information System (LIS) component of SAP. It is used to classify materials and services into three categories: A, B, and C. Materials and services in category A are considered to be the most important, while those in category C are the least important. 
  
  How to use it: 
  The ABC indicator can be used to prioritize materials and services for production or procurement. It can also be used to determine which materials and services should be stocked in inventory. The indicator can be set up in the SAP system by assigning a value of A, B, or C to each material or service. 
  
  Tips & Tricks: 
  When setting up the ABC indicator, it is important to consider the importance of each material or service in relation to the company’s overall goals. For example, if a company is focused on reducing costs, then materials and services in category C may be given a higher priority than those in category A. 
  
  Related Information: 
  The ABC indicator is closely related to other features of SAP such as material requirements planning (MRP) and inventory management. It can also be used in conjunction with other features such as cost accounting and budgeting.