World of 4-D

Why 4-Dimension for Inventory Management?

Traditional methods of Inventory Management include segregating the business products as HML (Heavy, Medium, and Light) based on the location of products from the docks. Similarly FSN (Fast, Slow, Non-Moving) is another way to store inventory for quick availability. These methods of categorizing inventory are based on Price, Value, Criticality, Availability, Movement, Predictability and Weight. The dynamic nature of supply and demand pattern in open market adds new challenges that may affect the supply chain if the inventory management is not efficient to handle growing demands. Having a 2-dimensional inventory analysis approach may help handle regular supply demand patterns; however a multi-dimensional inventory analysis is required to ensure consistency of supply chain according to dynamic demands.

ABC analysis is done for order values and XYZ analysis is done for consistency of order quantities. By introducing ‘abc’ to represent total order lines and ‘xyz’ for consistency of orders the 2-dimensional inventory analysis may be extended to 4-dimension adding a fresher perspective to the existing inventory management system in place. The key to the 4-Dimension analysis may be summarized as

1 ABC Total Order Values
2 XYZ Consistency of Total Order Quantities
3 abc Total Orders
4 xyz Consistency of Orders