How to Fix ABC-XYZ Classification in Supply Chain Management in 90 Days for $10M–$100M Companies

Mid-sized brands do not need a multi-year ERP transformation to fix ABC-XYZ classification. What they need is a structured 90-day execution plan.

When segmentation becomes dynamic and policy-linked, capital efficiency and service stability improve quickly.

Audit current ABC-XYZ logic. Identify thresholds, calculation frequency, and data sources.

Measure inventory value by tier and identify capital concentration in C and Z classes.

Document stockout frequency in A-tier SKUs and inventory aging in long-tail items.

Recalculate contribution tiers using updated revenue and margin distribution.

Refine variability thresholds using baseline demand where possible.

Link segmentation tiers to differentiated safety stock policies.

Implement lightweight automation for recalculation and threshold monitoring.

Set alerts for volatility shifts and capital overexposure.

Conduct monthly reviews covering reclassification drift, service performance, and working capital distribution.

Align segmentation reporting with finance dashboards.

• Reduce over-buffered C-class inventory.
• Stabilize stockouts in AX SKUs.
• Lower emergency freight expenses.
• Improve visibility into capital allocation.

Mid-sized brands often observe measurable improvements in service stability and a gradual release of working capital.

Operational firefighting declines as segmentation becomes dynamic and policy-driven.

Avoid overcomplicating rules or introducing excessive manual overrides.

Ensure cross-functional alignment between planning and finance.

AI-native planning platforms compress this 90-day roadmap by automating recalculation and capital visibility.

ABC-XYZ classification does not require a complete system overhaul to improve.

With structured focus over 90 days, mid-sized brands can transition from reactive planning to disciplined inventory governance.