Segmentation Dashboard

Created by Shyam Sayana, Modified on Tue, 18 Mar at 11:10 AM by Shyam Sayana

To access the segmentation results, click on its name. This will take you to the segmentation details screen, to view and analyze the generated results.

By default, the segmentation dashboard will appear with ABC, XYZ classification, and Nine box details.

The segmentation dashboard presents detailed insights into the created segmentation, showcasing key attributes such as the Measure, Time Range, and Computation Level.

ABC classification (Graph)

The ABC classification in the do-nut chat categorizes items based on their contribution to total volume distribution. This method helps classify planning items into three categories. Let’s consider the above example.

Category A (Top 80%)
- 1513 items (51%) contribute 79.98% of the total volume.
- These are the most essential items, representing the highest total sales and revenue contribution.
- In the case of inventory, these items require close monitoring and efficient stock management.
Category B (Middle 15%)
- 878 items (29%) contribute 15.02% of the total volume.
- These are moderately essential items with a decent contribution to total sales and revenue.
- In the case of inventory, these items require balanced inventory control and replenishment strategies.
Category C (Bottom 5%)
- 589 items (20%) contribute only 5.00% of the total volume.
- These are low-priority items, contributing minimally to overall sales.
- Requires less frequent restocking, and some may be considered for discontinuation.

This classification helps businesses focus on high-value items (A) while maintaining a cost-effective inventory management approach for lower-value items (B & C).

XYZ classification

XYZ classification analyzes demand variability based on the Coefficient of Variation (CV), which measures fluctuations in demand. It helps in inventory planning by categorizing items based on their predictability.

From the above screenshot example, the items are classified into three categories:

Category X (Stable Demand, CV < 0.5)
- 1,136 items (38%) contribute 51.66% of the total volume.
- These items have a low variation in demand, meaning they are highly predictable.
- Recommended for regular replenishment and stock optimization.
Category Y (Moderate Demand Variability, CV between 0.5 and 0.75)
- 12 items (0%) contribute 0.20% of the total volume.
- These items have a moderate level of demand fluctuation.
- Requires closer monitoring and flexible inventory strategies.
Category Z (High Demand Variability, CV > 0.75)
- 1,832 items (61%) contribute 48.14% of the total volume.
- These items have high demand uncertainty, making them unpredictable.
- Requires buffer stock, demand forecasting techniques, and risk mitigation strategies.

This classification helps inventory control, demand forecasting, and supply chain efficiency by focusing on demand stability.

Nine box summary

The Nine-Box Summary visualizes the ABC and XYZ classification, helping planners analyze the significance and variability of items within the segmentation. It categorizes products into nine distinct groups based on their contribution to overall revenue or units (ABC classification) and their demand variability (XYZ classification).

The Nine-Box Summary is formed by combining ABC and XYZ classifications, creating nine different segments:

	X (Stable Demand)	Y (Moderate Variability)	Z (High Variability)
A(High Contribution)	AX – High-revenue items with stable demand are the most straightforward to manage.	AY – High-revenue items with moderate variability require some forecast adjustments.	AZ – High-revenue items but unpredictable demand, needing strategic stocking.
B(Medium Contribution)	BX – Medium-revenue items with stable demand need moderate attention.	BY – Medium-revenue items with fluctuating demand requiring safety stock.	BZ – Medium revenue but unpredictable demand, making forecasting a challenge.
C(Low Contribution)	CX – Low-revenue but stable-demand items requiring minimal forecasting effort.	CY – Low-revenue items with fluctuating demand need some attention.	CZ – Low revenue and unpredictable demand, which is the hardest to manage.

The Nine Box Summary table can be downloaded for further analysis by clicking on the Download button provided.

The Nine-Box summary is categorized into nine groups based on two dimensions. The heat map visually represents the number of products within each segment classification.

The Nine-Box Summary is displayed in a table format, where additional metrics such as Average Volume, Standard Deviation, and Total Volume are calculated for each nine-box segment.

The table headers dynamically update based on the selected hierarchy level and the ID's description column.

Example:

If the selected hierarchy is Product: All: Location: All, the first column of the table will display the corresponding details at the product and location levels.

If the selected hierarchy is Product: All: All: All, the first column of the table will display corresponding product-level details.

If the selected hierarchy is Family: Region: Location: All, the first few columns of the table will display corresponding product-level details.

You can also view the detailed Nine-Box classification in a table format, which includes information such as:

Average Volume: This represents the average number of units sold over a specified period, providing insights into the overall demand trend for a product or category.
Standard Deviation: Standard Deviation measures the variability or fluctuation in sales volume over a given period.
A higher standard deviation indicates inconsistent or unpredictable demand, meaning sales numbers vary significantly.
A lower standard deviation suggests stable demand with constant sales numbers.
Total Volume: Total Volume represents the total quantity of units sold over the selected period.
It provides insight into the overall sales contribution of a product or category.
Higher total volume indicates high-selling products, while lower total volume may highlight low-demand or niche products.
This metric helps evaluate product performance, set inventory levels, and make strategic decisions in demand planning.
Nine-Box Segment for each selected item individually.