Manage What Matters: The Pareto Principle, ABC Analysis and How to Manage by Exception
There’s an inherent knowledge of the best-selling products
at just about every company we visit. What often is surprising, however, is how dramatically sales
are concentrated. “The 80-20 rule” is a commonly used phrase
and a common expectation. But when managers see a clear presentation that 90 percent of their sales come from
just 10 percent of their products (as is often the case), and that the bottom 50% of their products account for just 1%
of their sales (ditto), that’s when people start to sit up. That’s when hearts begin to flutter and knees start to shake.
That’s when it begins to register that maybe you shouldn’t manage all of your products the same way.
In a vacuum, ABC Analysis is thought-provoking but relatively inconsequential. When you begin to apply exceptional strategies and policies to the stratified product segments that the process identifies, however, you’ll begin to make an exceptional impact on each segment. Your top selling and most profitable products will receive the attention and treatment that they merit. As will your worst selling and least profitable products.
This white paper discusses:
- How to execute the ABC Analysis process.
- How to apply ABC Analysis to manage what matters.
- How to make the best use of your resources when you objectively identify unique opportunities for action.