The ELA analysis classifies items according to their life cycle phase into incoming, live and outgoing. The classification can be set either manually or using automatic analysis criteria. It plays a key role in determining the right planning and scheduling strategies for an item. For example, while a retail company may have to maintain a high level of readiness to deliver an incoming item despite stochastic demand, it may be possible to reduce the readiness to deliver an outgoing item and thus keep stock levels low.
Our tip:
Establish clear rules on when an item status changes from E to L and from L to A and check whether inventory responsibility should lie with different divisions depending on the life cycle class.
