Product Engineering - Quality Management

How To : Run Item Classification

Item classification, is based on the Pareto (80/20) principle. This function has been added to Product Engineering so users can classify items based on their contribution to the Activity (ABC) as well as based on the turnover of the item (abc). The combination can then be used to set the Skip Pattern: Aa, Ab, Ac, Ba, Bb, Bc, Ca, Cb, Cc.
To create or update a classification:

  1. Choose the Lightbulb that opens the Tell Me feature icon (Alt+Q)
  2. Type Classification Worksheet in the Search box
  3. From the Actions menu complete the following steps:
    1. Set Periods and Classes
    2. Set Items to include
    3. Calculate
    4. Implement

1. Set Periods and Classes

Parameters can be defined for each of the relevant business areas. The periods are set as a date formula so the calculation is based on rolling periods:
Periods example:

Area Start Length
Sales -3Y 3Y
Production -2Y 2Y
Project -2Y 2Y
Transfer -1Y 1Y
Assembly -2Y 2Y

In this example sales are included for a period of 3 years starting 3 years in the past from the work date. Production, Projects and Assembly demands for 2 years and Transfers (Ship) for 1 year.

For Activity as well as Turnover you can set a percentage for each of the classes.
Classes example:

Type Class A Class B Class C
Activity 10 20 70
Turnover 10 20 70

In this example: When for Class A 10 (%) is specified it means that the items, sorted from highest to lowest, that make up 10% of the total value are assigned class A, the next 20% to B and the remaining 70% to C.

ABC Statistics
Once calculated the calculated values will show in this section of Classification Setup page.

2. Set Items to include

The classification for the Item determines the skip pattern. Use this page to select the Items for which a classification must be calculated. With the Action "Update Item Selection" you can update the list with the help of filters.
The current item classifications are also shown on this page and will be updated by the Implement action in the classification worksheet.
The Critical field designates a, quality, critical item for which skips are not allowed.

3. Calculate

The classifcation is calculated with the Calculate action and based on the periods and classes specified in the setup. The results are shown in the worksheet. For Activity as well as turnover 3 columns are shown:

  • Actual = retrieved from the "Set Items to include" page
  • Calculated = the new calculated value
  • New = same as calculated but this field is editable so it can be updated

4. Implement

After the results of the calculation have been reviewed, and - optionally - corrected, the new calculated value can be Implemented. The implement action will update the values on the "Set Items to include" page.

See also

Quality Management