The XYZ analysis is a proven method in inventory management, which divides items into three categories based on their continuity of consumption: X, Y and Z. The aim of the analysis is to obtain forecast certainty about the demand of individual articles and to derive targeted measures for warehousing, procurement and disposition from this. In logistics, XYZ analysis is often combined with ABC analysis to classify items both by value and by consumption behavior.
An online retailer for office supplies works with a fulfillment service provider such as EMIRAT Fulfillment. Items such as standard printer paper (X-item) are regularly sold in large quantities — continuous storage with automatic reordering is worthwhile here.
Office advent calendars (Y articles) show a sharp seasonal increase in the fourth quarter — these must be planned early on but not stored permanently.
On the other hand, there is only irregular demand for a special labeling device (Z-item) — it is therefore only procured upon customer order in order to save storage costs.
The XYZ analysis helps to organize inventories as needed, to minimize capital commitment and to ensure the availability of items. It is therefore a central tool for efficient inventory management in modern fulfillment processes.
