Inventory Planning > Inventory Forecasting > Processing > Pareto Analysis

Pareto Analysis

You use this program to analyze and classify inventory items according to their contribution towards the total in terms of sales, gross profit, cost, quantity or transactions (hits). This enables you to identify those items that should be better managed because of their impact on the company's profitability.

IO Pareto Analysis Parameters

When you load the Pareto Analysis program, the IO Selections program is displayed, enabling you to indicate the stock items you want to analyze and to tailor the analysis

These options must be defined before the analysis results can be displayed.

Toolbar and menu

This screen displays the result of the analysis according to your selections in the IO Selections program.

Field Description
Options  
Parameters Select this to use the IO Selections program to indicate the parameters to use to perform the analysis.
Functions  
Manual Forecasting Select this to use the Manual Forecasting program to manually generate forecasts for items on an individual basis.
Demand History Select this to use the Demand History Maintenance program to view the sales history accumulated into the forecasting periods as defined by the calendar in use.
Parameters Select this to use the IO Selections program to indicate the parameters to use to perform the analysis.
Save Results

Save the stock code classifications that were analyzed.

This allows other forecasting programs to use this information, enabling you to include/exclude items based on the classification.

[Note]

This applies only if all stock codes were included in the analysis. The system does not allow you to save a set that may be 'compromised' by not including a full set of data (for example you may have excluded the warehouse with the highest value of sales movements).
Group This applies only if the analysis was run at a Level other than stock code (IO Selections).

The description for this field changes according to the analysis level you selected. This can be one of the following:

  • Warehouse
  • Product class
  • Supplier
  • Planner
  • Buyer

Enter the next group (warehouse, product class, supplier, planner or buyer) for which you want to display the analysis details.
Prev Select this to view the previous group of results.

This option is available only if the analysis was run at a level other than stock code.
Next Select this to view the next group of results.

This option is available only if the analysis was run at a level other than stock code.

Parameters

The parameters that were used to perform the analysis are displayed in this pane (see IO Selections).

Level Totals

This indicates the level totals for the currently selected group.

[Note]

  • IO uses the Inventory Movements table to obtain it's sales history and no movements are output for Kit types 'S' and 'K' items. Movements are only output for the components of these items. Against the components, there is no transaction value and the transaction value is used as the sales value in IO Demand History.

    Therefore, 'S' or Sub type kit components have no Sales value, only a Cost value. The Sales value is against the parent.

  • The totals displayed at the bottom of the Pareto Results listview may differ from the totals displayed here.

    The reason is that the totals in the Level Totals pane include values for items that are not necessarily listed in the listview. For example, you may have excluded 'E' class items, but these items may have values against them.
Column Description
Current group

This indicates the group for which the analysis is currently being displayed.

'All" indicates that the Analysis level is Stock code.

For all other analysis levels, this indicates the code of the warehouse, product class, supplier, planner, or buyer for which the analysis is currently being displayed.
Number of hits This indicates the group number of individual transactions.
Quantity This indicates the group quantity sold/forecast in the stocking unit of measure.
Cost

This indicates the group cost value of sales/forecasts. Forecast cost values are calculated using the forecast quantity and the current warehouse cost.

Cost values are not displayed if you have been denied access to the option: Show costs in Inventory/WIP queries (Operator Maintenance - Security).
Sales value This indicates the group sales value of sales/forecasts. Forecast sales values are calculated using the forecast quantity and the current list price.
Profit This indicates the group profit of sales/forecasts.
On hand value This indicates the on hand value of the stock codes in the group at the current warehouse cost.
Total items This indicates the total number of items included in the calculation.
Analysis period This displays the review period's start and end dates.

Pareto Graph

This pane displays a graphical representation of the analysis.

Pareto Summary

This listview displays the Level Totals for all the Pareto levels.

Pareto Results

This listview displays details of the stock items included in the analysis.

The totals for selected columns are displayed at the bottom of the listview.

These totals may differ from the totals displayed in the Level Totals pane. The reason for this is that the totals in the Level Totals pane include values for items that are not necessarily listed in the listview. For example, you may have excluded 'E' class items, but these items may have values against them.

Additional columns can be added right clicking in any listview column heading and selecting the Field Chooser option.

Column Description
Stock code This displays the stock item to which the analysis relates.
Description This displays the description for the stock item.
ABC This shows the A, B, C or D classification as defined by the percentage breaks.
ABC % This shows the percentage contribution for each item of the total.
Cum ABC %

This indicates the cumulative percentage of the total of all preceding stock codes plus this one.

The classification of stock codes is based on this cumulative percentage figure. A stock code is assigned the highest class towards which it contributes. Therefore, the preceding line's cumulative percentage is compared to the percentage breaks (as defined in the parameters) to determine the class for the current stock code.
Hits This indicates the number of individual transactions against the stock code.
Quantity This indicates the quantity sold/forecast in the stocking unit of measure.
Uom This indicates the quantity sold/forecast unit of measure.
Sales Value This indicates the sales value of sales/forecasts. Forecast sales values are calculated using the forecast quantity and the current list price.
Cost

This indicates the cost value of sales/forecasts. Forecast cost values are calculated using the forecast quantity and the current warehouse cost.

Cost values are not displayed if you have been denied access to the option: Show costs in Inventory/WIP queries (Operator Maintenance - Security).
Profit This indicates the profit of sales/forecasts.
On hand Value This indicates the on hand value of the stock codes at the current warehouse cost.
On hand % This indicates the on hand value of the stock code as a percentage of the total on hand value.
Product class This displays the product class defined against the stock item.
Revision

This indicates the revision level for the item, if the item is defined as ECC controlled (Stock Code Maintenance).

This is displayed only if you enabled the option: Analyze by Rev/Rel on the parameters screen.
Release

This indicates the release level for the item, if the item is defined as ECC controlled (Stock Code Maintenance ).

This is displayed only if you enabled the option: Analyze by Rev/Rel on the parameters screen
Last ABC This indicates the previous saved classification for the stock code at the level analyzed.
Last date This indicates the date the stock code was last analyzed (and saved) at this level.
Supplier This indicates the supplier assigned to the stock item (Stock Code Maintenance).
Buyer This indicates the buyer assigned to the stock item (Stock Code Maintenance).
Planner This indicates the planner assigned to the stock item (Stock Code Maintenance).
On hand quantity This indicates the quantity on hand in the warehouse.
Average sales This is calculated as the (Total sales / Number of months).
Months cover This is calculated as (On hand / Average monthly unit sales).
Rank This indicates the sequential number of each record in the ranking.
Rank % This is calculated as ((100 x (Rank divided by Total number of items)).

Notes and warnings

Restrictions and limits

  • Current month sales are excluded from the Pareto Analysis.
  • Items defined as Phantom part and Notional part (Stock Code Maintenance) are excluded from the Pareto Analysis.

Forecast history updates

  • If you selected the option: Update sales history automatically (Inventory Optimization Setup), then updates to the forecast history for sales and sales returns take place automatically for the stock code/warehouse combinations you process.

Application Help Pane

Application Help Panes provide step-by-step instructions for various functions within the program, including a brief overview of what the program does, what setup options are required and how to personalize the program. The intention is that the pane provides information that is uncluttered and easy to navigate.

You can embed an Application Help Pane:

  • in the main SYSPRO menu

  • in any program with panes, if not using roles

  • when adding a role layout in Design Mode.

Inserting Application Help

You would typically follow this procedure to display help for the current program in a customized pane that can be pinned to the program window.

Information includes step-by-step instructions for the various functions available within the program, including a brief overview of what the program does, what setup options are required and how to personalize the program.

  1. Open the program for which you want to insert application help into a customized pane.

    This functionality is only available for a program that has panes.

  2. Right-click any form field.

    You can also click the triangle menu icon that appears in the title area of a pane.

  3. Select Insert Application Help from the context-sensitive menu.

    The application help appears in a pane within your program. You can reposition the pane using the docking stickers or pin it to the program window.

Removing the Application Help pane

If you no longer want to display application help in a pane for your current program, you can simply remove it.

  1. Select the Close icon in the right-hand corner of the application help pane.

  2. Confirm that you want to delete the pane.