In brief
XYZ analysis divides materials into three classes according to the regularity of their consumption: X for constant, Y for fluctuating and Z for irregular.
Contents
What is XYZ analysis?
XYZ analysis is a materials management method that classifies items according to the predictability of their demand. While ABC analysis looks at the share of value, XYZ analysis asks how evenly a part is consumed. The two are frequently combined into an ABC-XYZ matrix with nine fields.
The basis is consumption figures over several periods, for example months. The measure usually used is the coefficient of variation, i.e. the standard deviation divided by the mean. A low value means even consumption (X), a medium value fluctuating consumption (Y), a high value sporadic consumption (Z). Each company sets the boundaries between the classes itself; there are no binding standard values.
Spare parts fall strikingly often into the Z class, because they are only needed in the event of failures or planned repairs. Consumption-based ordering methods are poorly suited to them. Instead, stock levels are set according to criticality, the number of installed units and replenishment lead time. X parts such as filters or lubricants, by contrast, can be managed well via framework agreements, call-off orders or vendor managed inventory.
In practice: maintenance and procurement
For a meaningful XYZ analysis, consumption data over a sufficiently long period should be used and special effects such as major repairs considered separately. Z parts with high criticality do not automatically belong out of stock but require a deliberate stockholding decision.
Synonyms and abbreviations: XYZ classification · ABC-XYZ analysis · demand variability analysis
Frequently asked questions
What is the difference between ABC and XYZ analysis?
ABC analysis classifies items according to their share of consumption value, i.e. how much money is tied up in them. XYZ analysis classifies them according to the regularity of consumption. Combined, the two produce a matrix from which ordering and stockholding strategies can be derived, such as tight control for AX parts and case-by-case decisions for CZ parts.
How is XYZ analysis calculated?
For each item, consumption per period is recorded, the mean and standard deviation are calculated from this and the two are set in relation to each other. This coefficient of variation shows how strongly consumption fluctuates. The items are then assigned to classes X, Y or Z on the basis of self-selected thresholds.
Why are many spare parts Z parts?
Spare parts are usually only needed when a component fails or is replaced during a planned repair. In between, there are often long periods without consumption. As a result, demand is hardly predictable statistically. For such parts, stock levels are better set according to criticality and replenishment lead time than according to a consumption forecast.