TABLE OF CONTENTS

• Overview 
• Segmentation summary
• What data to segment
• Segmentation classification 
  • ABC Classification
  • XYZ Classification
• Save and cancel
• Mandatory fields highlight

Overview 

To create a new segmentation in Firstshift.AI, begin by clicking the Create Segmentation button. You will be redirected to the Segmentation Creation screen, where you can define the segmentation details.

On this page, you must fill all mandatory fields—such as segmentation name, configuration parameters, and relevant selection criteria—to successfully create and save the segmentation. Once submitted, the segmentation will be added to the list and can be run, edited, or deleted as needed.

When creating a new segmentation, the following mandatory fields must be filled:

Segmentation summary

• Segmentation Name: The segmentation name should be unique.

What data to segment

Choose the measure, the period during which the time series data is to be considered, and the hierarchy level under this section.

• Output Measure: Select a measure/time series for which the segmentation is to be generated. 
  • This dropdown shows the list of configured time series that includes both Units and Revenue.
  • The output measure includes both historical and forecast measures.
  • If you don’t find the time series you want to segment, you can reach out to your customer service team to enable it.
• Start From: Select the start date that the application should use to consider the data when generating segmentation results.
• End At: Select the date till which the application should consider the data.
• Choose a hierarchy to segment Data: Select the hierarchy level at which the application should generate the segmentation results.
  • Firstshift allows the flexibility to generate segmentation at any hierarchy level.

Segmentation classification 

The Firstshift allows the planner to tweak the classification rules for ABC and XYZ classification.

• ABC Classification

The ABC classification categorizes items based on their revenue or total usage impact. It follows the Pareto Principle (80/20 rule), where a small percentage of items contribute to the majority of the value.

Default ABC Classification Thresholds:

• A-Class (80%): High-value items that contribute the most to revenue (typically the top 20% of items). These require close monitoring and accurate forecasting.
• B-Class (15%): Medium-value items that contribute moderately to revenue (typically 30% of the items). These need moderate control and forecasting.
• C-Class (5%): Low-value items with minimal impact on revenue (typically the bottom 50% of items). These require less monitoring and can be managed through bulk-ordering strategies.

• XYZ Classification

XYZ classification is used to analyze demand variability over time. It helps understand how stable or volatile the demand is for different items.

Default XYZ Classification Thresholds:

• X-Class (0.5 Coefficient of Variation - CV): Items with consistent and predictable demand. These can be easily forecasted with high accuracy.
• Y-Class (1 CV): Items with moderate demand variability. These require more flexible forecasting methods.
• Z-Class (>1 CV): Items with highly erratic and unpredictable demand. These are difficult to forecast and may require safety stock or alternative planning strategies.

Save and cancel

• Save:
  Once all required information is entered, click Save to create the segmentation. The application will validate the inputs, and if everything is correct, the segmentation will be stored and added to the list for further actions such as running, editing, or deleting.

• Cancel:
  Selecting Cancel will discard any changes and return you to the previous page or segmentation list without saving the entered details. This option is useful if you decide not to proceed with the segmentation or wish to start over later.

Mandatory fields highlight

If any required fields are left incomplete during segmentation creation, the application automatically highlights them to alert you. These visual cues serve as prompts to review and fill in the missing information before proceeding. Segmentation cannot be saved until all mandatory fields are correctly completed, ensuring data accuracy and proper configuration.