Purpose of ABC analysis in material management is ?

Concept:

• Material management includes managing the materials from the time of purchasing till the time of disposal
• Material managers will have few strategies to maintain the inventory
  • ABC analysis
  • VED analysis
• 
• In VED analysis the materials are categorized into Vital, Essential and desirable materials
• Category A items will have high value but less count where as the Category C items will be less cost more count
• Category A items are like ventilators, ICU beds, oxygen cylinders these where very high value items but required in less count
• Category C items are like needles, syringes, cotton, medicine etc., which are having low value but required in large quantity
• During inventory this categorization helps the material manager to minimize the un necessary costs and have a better budget

Additional Information

• ABC -> Always Better Control 
• VED -> Vital, Essential Desirable
• HML -> High, Medium, Low
• FSN -> Fast, Slow moving, Non moving
• SDE -> Scare, Difficult, Easy
• The above are the types of analysis in material management.