ABC Sale Analysis, Stock Norm & Production Plan
Logic ERP has introduced an enhancement to the ABC Wise Stock Norm & Production Plan report. This report helps businesses identify which products need to be produced and determine the required production quantity based on actual sales, current stock availability, and defined planning criteria.
With this enhancement, users can configure the required planning parameters and generate the report to analyze product-wise demand and stock requirements, enabling more effective production planning and inventory management.
Understand How the Report Works
The ABC Wise Stock Norm & Production Plan report analyzes product sales for the selected period and categorizes products into A, B, and C based on their sales performance.
Each category has defined Buffer Days, which determine the required stock level. The system calculates the required buffer using the average daily sale × Buffer Days and then deducts the available HO Stock to calculate the Production To Be Done.
Example: If average daily sales are 13.33 units, Category A has 10 Buffer Days, and HO Stock is 40 units, the required buffer is about 133 units, resulting in 93 units to be produced.
By default, products are ranked based on sales value, while the stock requirement is calculated in quantity. Users can also choose to rank products by quantity.
Configure the Sales Period
Open the ABC Wise Stock Norm & Production Plan report.
Open the Configuration window.
Navigate to the Sales Period section.
Here, define how far back the report should analyze sales. The period can be configured in months or days.
For example, you can select a three-month period to analyze recent sales.
You can also configure:
Days for Average Daily Sale – Define whether the average should be calculated using calendar days or a fixed number of days.
Ignore Period Before Item Creation – Enable this option to calculate sales only from the date the item was created.
For example, if an item was created part-way through the selected period, enabling this option prevents its sales from being averaged over the period during which the item did not exist.
Define Sale Value
Navigate to the Sale Value Definition section.
Here, you can define which transactions and values should be considered while calculating product sales and ranking.
The available settings include:
Sale Value Basis – Select the required value basis such as Basic, Taxable, or Net amount.
Rank Products On – Rank products based on Value or Quantity.
Net Off Sale Returns – Deduct sale returns from the sales calculation.
Include Free / Repl / Sample – Include free, replacement, and sample issues in the sales calculation.
Exclude Inter Branch Transfers – Exclude stock transfers between branches from sales.
Include Challan Not Invoiced – Include goods issued through challans that have not yet been invoiced.
Sale Branch Scope – Select the branches whose sales should be considered.
Important Point
Exclude Inter Branch Transfers is an important setting because stock transferred between your own branches is not necessarily an actual customer sale. If such transfers are included, the sales figures may increase and affect the product ranking.
Configure ABC Categories and Buffer Days
Navigate to the section where you define the Categories and Buffer Days.
Here, you can create a category-wise planning policy.
For example:
Category
Boundary
Buffer Days
A
10
10
B
50
20
C
100
30
This configuration means that the top 10% of ranked products are classified as Category A and receive 10 days of stock coverage. The next 40% are classified as Category B with 20 days of coverage, while the remaining products are classified as Category C with 30 days of coverage.
The boundaries are cumulative, so the final category should reach 100.
You are not limited to three categories. Additional categories such as D and E can also be added according to the business requirement.
Select the Classification Method
The report provides different methods for dividing products into categories.
By Share of Products:
Products are divided based on their percentage of the total ranked product list.
For example, the top 10% of products can be classified as Category A.
By Share of Value:
Products are classified based on their contribution to the total sales value.
This can be useful when a small number of products contribute a significant portion of the total turnover.
By Fixed Number
A fixed number of products can be assigned to each category.
For example, the top 100 products can be classified as Category A, followed by the next 500 products in Category B and so on.
This method can be useful for businesses with a very large product catalogue.
Configure Additional Classification Options
You can also configure additional options such as:
Classification Scope – Determine whether products should be ranked across the complete catalogue or within their respective item groups.
Show Only Category – Display only the selected category in the report.
For example, once the planning policy is finalized, you can select a particular category to focus only on those products.
Configure Which Stock Should Be Considered
Navigate to the Head Office Stock section.
Here, select the branches whose stock should be considered for production planning.
Usually, these are the warehouses or branches that supply stock for production planning.
You can also configure:
Stock Source Basis
Stock As On Basis
Include Master Free Stock
Include Bin Stock
Filter on Godowns
Less Reserved Stock
Less Stock Allocated Against SO
Less Pending DO Qty
Result
These settings determine how much stock is actually available to cover the required buffer.
For example, stock that is already reserved, allocated against a Sales Order, or included in a pending Delivery Order can be deducted so that committed stock is not treated as freely available stock.
Important Note About Past Dates
If you select a past date under the stock date settings, the report considers the total stock available as of that date.
The detailed breakdown of free, reserved, and committed stock is available for the current stock position. Therefore, if a past date is selected, the Less Reserved Stock and other similar deductions may not affect the result in the same way as they do for current stock.
Configure Production Requirements
Navigate to the Production Requirement section.
Here, you can configure the final adjustments used to calculate the production quantity.
The available settings include:
Less WIP Qty – Deduct stock that is already under production.
Add Pending SO Qty – Add quantities already ordered by customers.
Floor Production At Zero – Prevent negative production quantities from being displayed.
Round Production To – Round the production quantity according to the selected rule.
Rounding Multiple – Define the required production batch multiple.
Minimum Production Qty – Ignore production requirements below the specified quantity.
For example, if the calculated requirement is 237 units and production is normally done in batches of 50, the rounding settings can be used to make the proposed quantity practical for production.
Save the Configuration
After defining the required sales period, sale definition, categories, buffer days, stock settings, and production requirements:
Review the configuration.
Save the settings.
Return to the report window.
The configuration is now ready to generate the report.
You can also save multiple configurations under different names if different product ranges require different planning policies.
Generate and Read the Report
Run the ABC Wise Stock Norm & Production Plan report.
The report displays one row for each product, and the columns show the calculation from left to right.
Important columns include:
Company, Group, Item Name, Shade, Pack / Size – Identifies the product.
Category – Shows the assigned category such as A, B, or C.
Sale Qty / Sale Value – Shows the sales during the selected period.
Avg Daily Qty – Shows the average daily sales quantity.
Buffer Days – Shows the number of days of stock defined for the category.
Reqd Buffer Qty – Shows the quantity that should be maintained.
HO Stock – Shows the available stock considered by the report.
Stock Value – Shows the value of the available stock.
WIP Qty – Shows the quantity already under production.
Pending SO Qty – Shows the quantity already ordered by customers.
Production To Be Done – Shows the proposed production quantity.
Production Value – Shows the value of the proposed production.
Understand the Production Calculation
Let's take an example of a Category A product:
Parameter
Value
Category
A
Sale Qty
1200
Avg Daily Qty
13.33
Buffer Days
10
Reqd Buffer Qty
133
HO Stock
40
Production To Be Done
93
The product sold 1,200 units during the selected period, resulting in an average daily sale of approximately 13.33 units.
Since the product belongs to Category A, the configured buffer is 10 days.
Therefore:
Avg Daily Qty × Buffer Days = Reqd Buffer Qty
13.33 × 10 ≈ 133 units
The report then considers the available HO Stock of 40 units.
Therefore:
Reqd Buffer Qty − HO Stock = Production To Be Done
133 − 40 = 93 units
So, the report proposes 93 units for production.
Review Grouping and Totals
The report can also be grouped and totaled by Company or Item Group.
If the business uses additional product classifications, Extra Item Groups can be used to add further grouping columns.
You can also switch off columns that are not required to create a shorter and more focused report.
Understand Common Report Scenarios
Stock Total Does Not Match the Stock Report
By default, the report displays products that have sales during the selected period.
To include products with zero sales, enable Include Zero Sale Items.
However, enabling this option also changes the ABC classification because the total number of products included in the ranking increases.
Category A Contains Too Many Products
If the product catalogue is very large, use the fixed-number classification method.
For example, set Category A to a fixed count of 100 products to create a more manageable planning list.
Production To Be Done Shows a Negative Value
A negative production quantity indicates that the available stock is higher than the required buffer.
If negative values should not be displayed, enable Floor Production At Zero.
HO Stock Appears Too High
Check whether the report is grouped by Company or Item Group. At a grouped level, the stock for the entire group can be included.
For a product-level comparison, review the report without grouping at the higher level.
A Strong-Selling Product Appears in Category C
This can occur when a return processed during the selected period relates to a sale from before the selected period.
In such cases, changing Rank Products On to Quantity can provide a quantity-based ranking.
Categories Change After Adding an Extra Grouping Column
This is expected because adding a grouping level changes the level at which products are ranked, which can result in the categories being re-formed.
Key Benefits
Sales-Based Production Planning: Uses actual sales history instead of manually entered forecasts.
ABC Classification: Separates products according to their sales performance.
Flexible Stock Norms: Allows different buffer days for different product categories.
Accurate Stock Consideration: Can account for reserved, allocated, and pending delivery quantities.
Practical Production Quantities: Supports rounding, minimum quantities, WIP, and pending Sales Orders.
Flexible Reporting: Supports grouping, extra item groups, and selective report columns.
Consistent Planning: Applies the configured business policy consistently across products.
Final Takeaway
The ABC Wise Stock Norm & Production Plan is a planning aid that uses sales history, product classification, buffer days, and available stock to suggest the quantity to be produced. The final production decision remains with the business, which can also consider upcoming promotions, expected customer orders, and raw material availability.
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