ABC/XYZ Classification and Forecast Optimization (2024)

You use the ABC/XYZ Classification and Forecast Optimization report to classify planning objects into A, B, C and X, Y, and Z classes based on the criteria you specify in Customizing for Advanced Planning and Optimization, under ABC/XYZ Classification and Forecast Optimization (1)Supply Chain Planning ABC/XYZ Classification and Forecast Optimization (2) Demand Planning (DP) ABC/XYZ Classification and Forecast Optimization (3) Basic Settings ABC/XYZ Classification and Forecast Optimization (4) ABC/XYZ Classification ABC/XYZ Classification and Forecast Optimization (5) Specify ABC/XYZ Classification Profiles ABC/XYZ Classification and Forecast Optimization (6). The ABC classesdefine the revenue or sales value of the planning object, while the XYZ classes define the dynamics of consumption or sales. The system uses these classes to determine the best forecast profile to use for a specific planning object in forecasting.

The ABC/XYZ Classification and Forecast Optimization report generates automatic forecast profile assignment that can be used to execute demand planning in the background. The report reduces necessary manual adjustment in the demand planning process.

Integration

You can display the results of the classification on an aggregated or detailed level, and edit the class values manually, on the SAP Easy Access screen, under ABC/XYZ Classification and Forecast Optimization (7)Advanced Planning and Optimization ABC/XYZ Classification and Forecast Optimization (8) DemandPlanning ABC/XYZ Classification and Forecast Optimization (9) Environment ABC/XYZ Classification and Forecast Optimization (10) Display ABC/XYZ Classification Results ABC/XYZ Classification and Forecast Optimization (11). For more information, see ABC/XYZ Classification Result Display.

You can display and edit the results of forecast optimization on the SAP Easy Access screen, under ABC/XYZ Classification and Forecast Optimization (12)Advanced Planning and Optimization ABC/XYZ Classification and Forecast Optimization (13) Demand Planning ABC/XYZ Classification and Forecast Optimization (14) Environment ABC/XYZ Classification and Forecast Optimization (15) Assign Forecast Profiles to a Selection ABC/XYZ Classification and Forecast Optimization (16).

The system uses the forecast profile assignments during forecasting.

Prerequisites

You can run the ABC/XYZ Classification and Forecast Optimization report only if the following applies:

  • You have specified a planning area that contains the planning objects that you want to classify.

    To create or edit planning areas, on the SAP Easy Access screen, choose ABC/XYZ Classification and Forecast Optimization (17)Advanced Planning and Optimization ABC/XYZ Classification and Forecast Optimization (18) Demand Planning ABC/XYZ Classification and Forecast Optimization (19) Environment ABC/XYZ Classification and Forecast Optimization (20) Administration of Demand Planning and Supply Network Planning ABC/XYZ Classification and Forecast Optimization (21).

  • You have assigned a classification profile to the planning area that contains the planning objects that you want to classify.

    To assign a classification profile to the planning area, on the SAP Easy Access screen, choose ABC/XYZ Classification and Forecast Optimization (22)Advanced Planning and Optimization ABC/XYZ Classification and Forecast Optimization (23) Demand Planning ABC/XYZ Classification and Forecast Optimization (24) Environment ABC/XYZ Classification and Forecast Optimization (25) Demand Planning Worklist ABC/XYZ Classification and Forecast Optimization (26), and in the ABC/XYZ Configuration queries, choose AllClassification Profiles.

ABC/XYZ Classification and Forecast Optimization (27)Recommendation

We recommend that you run ABC/XYZ classification on all of the planning objects that belong to one planning area, since in the ABC/XYZ Configuration queries of the Demand Planning Worklist, you can specify criteria that can makeyour classification and forecast optimization results distorted if you run classification only on a restricted group of planning objects.

End of the recommendation.

See Also
What is ABC Analysis in Inventory Control?What is ABC Analysis: Use, Advantages, GuideABC Analysis: Meaning, Advantages, Challenges & Implementation Explained | GEP BlogCombine XYZ with ABC and Create a Plan For Every Part

To use this function, you must activate the business function SCM-APO-FCS, Events and Outliers, Causals, ABC/XYZ Classification (SCM_APO_FORECASTING_1). For more information, see SCM-APO-FCS,Events and Outliers, Causals, ABC/XYZ Classification.

Features

You can use the ABC/XYZ Classification and Forecast Optimization report to group planning objects into ABC/XYZ classes, and find the most optimal forecast profile for them that the system can use during forecasting. You can run ABC/XYZ classification togetherwith forecast optimization, or separately. If you want to run forecast optimization separately, you must make sure that you have run ABC/XYZ classification beforehand, so that the system has classified planning objects to work with.

Selection

You specify the selection that you want to run ABC/XYZ Classification and Forecast Optimization on. In the Source screen area, you specify the planning area, planning version, and the selection profile that define the group of planningobjects you want to classify. You also provide the classification profile that you want to use.

In the Horizon for ABC Analysis screen area, you specify the beginning and end of the period for which you want to run ABC classification for.

In the Horizon for XYZ Analysis and Forecast Optimization screen area, you specify the beginning and end of the period for which you want to run XYZ classification for. You also specify the periodicity you want the system to use when it runs forecasting and ABC/XYZclassification.

ABC/XYZ Classification and Forecast Optimization (28)Recommendation

We recommend that the periodicity and the horizon you specify for ABC/XYZ classification are the same as the periodicity and horizon you use for forecasting.

End of the recommendation.

ABC/XYZ Classification and Forecast Optimization (29)Note

When running, the ABC/XYZ Classification and Forecast Optimization report locks the selection on the planning level you specified for ABC classification. If you run forecast optimization without ABC/XYZ classification, the report locks the selection on the planninglevel you specified for XYZ classification. To prevent problems with other application locks, on the SAP Easy Access screen, under ABC/XYZ Classification and Forecast Optimization (30)Advanced Planning and Optimization ABC/XYZ Classification and Forecast Optimization (31) Demand Planning ABC/XYZ Classification and Forecast Optimization (32) Environment ABC/XYZ Classification and Forecast Optimization (33) Administration of Demand Planning and Supply Network Planning ABC/XYZ Classification and Forecast Optimization (34) on the Locking Logic tab page, select the Key-Figure-Specific Lock checkbox.

End of the note.

Classification

You run classification for a selection profile containing the planning objects, with a classification profile that contains the details of the classification rules and the level of the classification. To run ABC/XYZ classification, in the Selected Actions screenarea, select the Classification checkbox.

Forecast Optimization

To run forecast optimization, in the Selected Actions screen area, select the Forecast Optimization checkbox. During forecast optimization, the system finds the best forecast profile assignment for each planning object automatically,as follows:

  1. For each planning object, the system obtains the composite forecast profile that is assigned to the object's ABC/XYZ class in the All Classification Profiles query of the Demand Planning Worklist.

  2. The system executes forecasting based on the forecast profiles that the composite forecast profile contains. Based on the error measure that the composite forecast profile contains, the system selects the univariate forecast profile that returns the smallest error.

  3. The system generates a master forecast profile, assigns the selected forecast profile to it, as well as the selection, the forecast key figure you specified in the Forecast Key Figure field in the Selected Actions screenarea, and the number of future periods that you specified in the Number of Future Periods field.

If you select the Only for Objects Without Assigned Forecast Profiles checkbox, the system performs forecast optimization only for the planning objects that it has not performed forecast optimization for before, and as a result, have no forecast profile assignedto them.

If you want to keep your forecast optimization results for future runs of forecast optimization, in other words, if you want to keep the forecast profile that the system assigned to the planning object, choose the Disable Forecast Optimization pushbutton in DisplayABC/XYZ Classification Results. For more information, see ABC/XYZ Classification Result Display.

If you run ABC/XYZ classification on a set of planning objects on which you have already performed forecast optimization, the system keeps the forecast profile assignment of the forecast optimization run.

Settings for XYZ Classification

If you select the Detrend or Deseasonalize checkbox, you can tell the system to clean the historical time series that is the basis of XYZ classification from the trend and seasonality pattern, respectively. The system runs a trend,or seasonality test first to decide whether it should perform detrending or deseasonalizing.

Parallel Processing

You can run the ABC/XYZ Classification and Forecast Optimization report in parallel processing mode. In the Other Settings screen area in the Paral. Proc. Profile (Name of Parallel Processing Profile)field, specify the parallel processing profile that you want the system to use when running the report in parallel processing mode. You define parallel processing profiles in Customizing for Advanced Planning and Optimization, under ABC/XYZ Classification and Forecast Optimization (35)SupplyChain Planning ABC/XYZ Classification and Forecast Optimization (36) Demand Planning (DP) ABC/XYZ Classification and Forecast Optimization (37) Profiles ABC/XYZ Classification and Forecast Optimization (38) Define Parallel Processing Profile ABC/XYZ Classification and Forecast Optimization (39).

Business Add-Ins for ABC/XYZ Classification

The following Business Add-Ins (BAdIs) are available for ABC/XYZ Classification, in Customizing for Advanced Planning and Optimization, under ABC/XYZ Classification and Forecast Optimization (40)Supply Chain Planning ABC/XYZ Classification and Forecast Optimization (41) Demand Planning (DP) ABC/XYZ Classification and Forecast Optimization (42) Business Add-Ins (BAdIs) ABC/XYZ Classification and Forecast Optimization (43) ABC/XYZ Classification ABC/XYZ Classification and Forecast Optimization (44):

  • BAdI: Change of ABC/XYZ Classes Determined by ABC/XYZ Classification(/SAPAPO/BADI_DP_ABCXYZ_CHANGE)

    You can use this BAdI to override the ABC and XYZ classes that the system determines during an ABC/XYZClassification and Forecast Optimization run, before the system saves the results.

  • BAdI: Change of Forecast Profile Assignment Before Fcst. Optimalization(/SAPAPO/BADI_DP_ABCXYZ_FPRFCHG)

    You can use this BAdI to assign a different MLR or univariate forecast profile to a characteristicvalue combination (CVC) during a forecast optimization run. This means that implementing this BAdI, you can override the settings you maintain in the Demand Planning Worklist, in the ABC/XYZ Configuration -> All ClassificationProfiles queries on the SAP Easy Access screen, under ABC/XYZ Classification and Forecast Optimization (45)Advanced Planning and Optimization ABC/XYZ Classification and Forecast Optimization (46) Demand Planning ABC/XYZ Classification and Forecast Optimization (47) Environment ABC/XYZ Classification and Forecast Optimization (48) Demand Planning Worklist ABC/XYZ Classification and Forecast Optimization (49).

  • BAdI: Own Variation Coefficient Calc. Logic During XYZ Classification(/SAPAPO/BADI_DP_ABCXYZ_OWNVARI)

    You can use this BAdI to define your own variation coefficient calculation logic that the systemuses during XYZ classification.

ABC/XYZ Classification and Forecast Optimization (2024)
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