Summary
The Classing Setup screen allows you to set the resolution at which ABC and XYZ classes are calculated, as well as the frequency of that calculation.
Access this screen by going to Admin --> System Configuration --> Global Class Settings
The "Recalculate Now" button at the top will allow you to recalculate classes immediately if desired, and subsequently items can be re-planned based on their new class-based service level target.
Once you have configured these global settings, you will want to configure individual class setup in the Class Settings screen.
Your options on this screen are as follows:
Settings
- Update Frequency- This option controls how often to run your classing. StockIQ recommends no less frequently than monthly on your classing, in particular since when new items are added to your catalog, they will not be assigned a class other an "X" until the classing has run.
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Un-Classed Items
- Run Classing: When a new item is introduced at any point irrespective of the update frequency, all items are classed
- Assign Default Class: When a new item is introduced at any point outside of the update frequency assigned, it has a default class of N or X. All items do NOT get reclassed. Use this option for more stability in item classing.
- Number of ABC Classes- Sets how many classes to use. 4 (A,B,C,D) is most common.
Item (Site-Group) Level Classing
- Enable Site-Group Level Classing- whether or not you'd like classing to be done at the item-site-group level. You can can configure site-group level classing in the Site Group Classing Screen.
- Prefer Site-Group Classing- StockIQ will assign class based on the site-group level where available. If not present, StockIQ will fall back on Item-Site classing
Cascading
- Cascade Spoke Class to Hub-
- Cascade Assembly Class to Components-
Class By Checkboxes
These checkboxes control the attributes by which your items are grouped before classing is done.
When no checkboxes are checked, all items at all sites are thrown into one lump, and classing is applied according to your class settings.
More common is to do classing by Site/Facility, especially when you have warehouses that are of wildly differing sizes. When this is the case, if one warehouse has a large share of volume, there will tend to be most of your A and B items assigned in that warehouse, and the other warehouses will have their own items "crushed" into the C and D classing, which may not be desirable.
So, when you class by Site, each Site will have its own mix of A, B, C, etc. that are calculated, so you end up with a good distribution that helps you understand which items are important at each location.
Similarly, if you wish to get more specific about your classing groups, you can select additional criteria such as categories etc. Each additional checkbox will determine the size of each cohort for classing activity.
XYZ Criteria
Sets what to use for your XYZ classing, e.g. the variability measure of your SKUs when stratification is done.
Calculation Method
What method is used to do the XYZ classing:
- Coefficient of Variation - Uses the standard mathematical cv of the demand history of the item to calculate XYZ. Not recommended.
- Forecastability - Sets the XYZ based on the forecastability, e.g. model error, of the product. If we can forecast it well (even if highly variable, such as a seasonal item), then it will tend more towards "X" than "Z".
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Usage Pattern - Substitutes the usage pattern for XYZ in the following way. This is our recommended setting since it is very easy to understand and map to application behavior.
- Recurring = X
- Sporadic = Y
- Slow or Dead = Z
X, Y, Z Break: Determines the values at which each class moves to the next. .50 / 1.0 are good for CV, as are 50% / 100% good for the Model Error method.
Use N Class: Determines whether StockIQ is allowed to use a special "N" class for when insufficient data is available to calculate a meaningful XYZ Class. This option is recommended.