GOLF, XYZ, SOS, HML analysis of Material Management

Golf Analysis

The letter stands for Government, Ordinary, Local and Foreign. There are mainly imported items which are canalized through the State Trading Corporation (STC) Minerals and Metals Trading Corporation, etc. Indian Drugs and Pharmaceutical Ltd (IDPL), Mica trading corporation etc. These are special procedures of inventory control which may not applicable to ordinary items as they require special procedures.

G = Government controlled supplies

O = Open market supplies

L = Local supplies

F = Foreign market supplies

XYZ Analysis

It is based on the closing inventory value of different items. Such classification is done every year at the time of annual stock taking and items having highest inventory- valuation are classified as ‘X’, while those with low investment in them are termed as ‘Z’ items.

Other items are ‘Y items whose inventory value is neither too high nor too low. This type of analysis is particularly useful in identifying the items requiring maximum care and attention during storage.

SOS Analysis

Raw materials, especially agricultural inputs are generally classified by the seasonal, off-seasonal systems since the prices during the season would generally be lower.

The seasonal items which are available only for a limited period should be procured and stocked for meeting the needs of the full year. The prices of the seasonal items which are available throughout the year are generally less during the harvest season.

The quantity required of such items should, therefore, be determined after comparing the cost savings on account of lower prices, if purchased during season, with the higher cost of carrying inventories if purchased throughout the year.

A Buying and stocking strategy for seasonal items depend on a large number of factors and more and more sophistication is taken place in this sphere and operational techniques are used to obtain optimum results.

HML Analysis

HML Classification:

The HML classification is similar to the ABC classification, except for the fact that instead of consumption values of items, their unit values are considered. Items are classified on the basis of their unit values into:

H = High value items.

M = Medium value items.

L = Low value items.

This type of analysis is useful for keeping control over materials consumption at the departmental level. For example, gold, which is a high value item, will be classified as H and coal, which is a low value item, will be classified as L.

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