What is ABC analysis basis in SAP (SCM-EWM - Extended Warehouse Management)?

SAP Term: ABC analysis basis

• Component: SCM-EWM

• Component Name: Extended Warehouse Management

• Description: The underlying measurement that you use during an ABC analysis to assess the importance of products. For example, you can perform the analysis based on the number of confirmed warehouse tasks for each product. Then you can assign importance to the products based on the percentage of confirmed warehouse tasks for the product.

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• Key Concepts: 
  ABC analysis basis is a method used in SAP Extended Warehouse Management (SCM-EWM) to classify items based on their importance. It is based on the Pareto principle, which states that 80% of the effects come from 20% of the causes. This means that ABC analysis basis is used to identify the most important items in a warehouse and prioritize them for better management. 
  
  How to use it: 
  In SAP EWM, ABC analysis basis is used to classify items into three categories: A, B, and C. Items in category A are the most important and are given priority when it comes to storage, handling, and other activities. Items in category B are less important and are given less priority. Finally, items in category C are the least important and are given the least priority. 
  
  Tips & Tricks: 
  When using ABC analysis basis in SAP EWM, it is important to remember that the categories are relative. This means that what is considered an A item in one warehouse may be considered a B item in another warehouse. It is also important to remember that ABC analysis basis should be used as a guide and not as a hard rule. 
  
  Related Information: 
  ABC analysis basis is closely related to other methods of inventory management such as ABC classification and ABC inventory control. These methods can be used together with ABC analysis basis to create an effective inventory management system. Additionally, ABC analysis basis can be used in conjunction with other SAP EWM features such as stock transfer orders and stock removal orders to ensure efficient warehouse operations.