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

SAP Term: ABC category

• Component: SCM-EWM

• Component Name: Extended Warehouse Management

• Description: A group of products that have the same importance in an ABC analysis. During ABC analysis, you group products together and assign an importance to them. There are usually three categories: A Most Important B Relatively Important C Least Important For example, in an ABC analysis based on percentage of quantity moved in the warehouse, ABC category A might contain the products that make up 80% of the goods movements in the warehouse.

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• Key Concepts: 
  ABC category is a classification system used in SAP Extended Warehouse Management (EWM) to categorize items based on their characteristics. It is used to group items into categories for easier management and tracking. The categories are based on the ABC analysis, which is a method of categorizing items according to their importance or value. 
  
  How to use it: 
  In SAP EWM, the ABC category is used to classify items into three categories: A, B, and C. Items in the A category are the most important or valuable, while items in the B and C categories are less important or valuable. The ABC category can be used to prioritize inventory management tasks, such as reordering and stocking levels. 
  
  Tips & Tricks: 
  When setting up the ABC category in SAP EWM, it is important to consider the importance of each item and its value to the business. This will help ensure that the most important items are given priority when it comes to inventory management tasks. 
  
  Related Information: 
  The ABC category is closely related to other inventory management concepts such as reorder points and safety stock levels. It can also be used in conjunction with other inventory management tools such as cycle counting and stocktaking.