BW's Little-Known ABC Analysis Tool Has Wide Logistics Application

  • by Ned Falk, Senior Education Consultant, SAP
  • January 1, 2004
The ability to classify your business objects (customers, vendors, materials, and so on) in relation to a key figure (such as sales or costs) allows you to perform a number of valuable tasks. In inventory management, for example, you could identify your materials that have the highest inventory carrying costs or your slow sellers that you plan to liquidate.


Classifying the elements of your business processes can save money and resources. It does not take a management guru to notice that 20 percent of your parts give you 80 percent of your problems, and that it might be better to focus your attention on that 20 percent. A common classifying method is called ABC analysis. The “ABC” refers to the three levels of classification this method offers: A=important, B=less important, and C=relatively unimportant.

Ned Falk

Ned Falk is a senior education consultant at SAP. In prior positions, he implemented many ERP solutions, including SAP R/3. While at SAP, he initially focused on logistics. Now he focuses on SAP HANA, SAP BW (formerly SAP NetWeaver BW), SAP CRM, and the integration of SAP BW and SAP BusinessObjects tools. You can meet him in person when he teaches SAP HANA, SAP BW, or SAP CRM classes from the Atlanta SAP office, or in a virtual training class over the web. If you need an SAP education plan for SAP HANA, SAP BW, BusinessObjects, or SAP CRM, you may contact Ned via email.

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