Write and explain with illustrative examples (a) A-B-C Analysis (b) V-E-D Analysis (c) C-I-N Analysis

(a) A-B-C Analysis:

A-B-C Analysis, also known as Pareto analysis or ABC classification, is a technique used for inventory management and resource allocation based on the principle that not all inventory items are of equal importance or value to an organization. This method categorizes items into three groups (A, B, and C) based on their significance in terms of usage value, frequency of usage, or impact on business operations.

• A-Items: These are the most critical and valuable items that contribute significantly to the total inventory value or account for a large portion of sales or usage. They require close attention and frequent monitoring.

  Example: In a retail store, high-end electronics or popular fashion items would be classified as A-items due to their high sales volume and impact on revenue.

• B-Items: These are moderately important items that have a moderate impact on inventory value or sales. They are managed with some level of attention and regular monitoring.

  Example: In the same retail store, accessories or lower-priced electronics may be classified as B-items because they contribute to sales but are not as critical as A-items.

• C-Items: These are low-value or low-priority items that have minimal impact on overall inventory value or sales. They are typically managed with minimal effort or automated processes.

  Example: Small, inexpensive consumables like batteries or stationery items in the retail store may be classified as C-items due to their low individual value and impact.

The purpose of A-B-C Analysis is to prioritize resources and efforts based on the criticality and value of inventory items. It helps organizations allocate resources efficiently by focusing attention on high-value items (A-items) while streamlining management of lower-value items (B and C-items).

(b) V-E-D Analysis:

V-E-D Analysis, also known as Vital, Essential, and Desirable analysis, is a method used to classify spare parts or inventory items based on their criticality and importance for maintaining operational continuity and minimizing downtime.

• Vital (V) Items: These are critical items that are indispensable for the operation of essential systems or equipment. Their unavailability could lead to significant downtime, safety risks, or production stoppages.

  Example: Key components of critical machinery in a manufacturing plant, such as specialized bearings or control units, would be classified as vital (V) items.

• Essential (E) Items: These are important items that support routine operations and maintenance activities. While their absence may not lead to immediate shutdowns, their availability is necessary for efficient operations.

  Example: Commonly used spare parts like filters, lubricants, or standard electrical components in a factory would be classified as essential (E) items.

• Desirable (D) Items: These are non-critical items that may be nice to have but are not essential for maintaining operations. Their availability does not significantly impact day-to-day activities or safety.

  Example: Decorative or aesthetic components, such as signage or non-essential office supplies, would be classified as desirable (D) items.

V-E-D Analysis helps organizations prioritize inventory management efforts by focusing resources on ensuring the availability and reliability of vital and essential items while adopting cost-effective strategies for less critical or non-essential items.

(c) C-I-N Analysis:

C-I-N Analysis, also known as Criticality, Inventory, and Notification analysis, is a method used to assess the criticality of spare parts or inventory items based on their importance, availability, and lead time considerations.

• Criticality (C): This factor assesses the importance of an item based on its impact on operational continuity, safety, or production output. Critical items are those that have a high impact on operations if unavailable.

• Inventory (I): This factor evaluates the availability and stocking levels of an item. It considers factors such as lead time, storage costs, and usage rates to determine optimal inventory levels.

• Notification (N): This factor focuses on the notification or alert mechanisms in place for managing item availability. It involves setting up triggers or notifications for reordering or replenishing inventory items based on predetermined thresholds.

C-I-N Analysis helps organizations identify and prioritize spare parts or inventory items based on their criticality and operational impact, optimize inventory levels and stocking strategies, and establish effective notification and replenishment processes to ensure timely availability of critical items while minimizing inventory costs and risks.