Tool - ABC Analysis

ABC Analysis is a technique used to support idea assessment. For this approach, ideas are listed on a table. Next, criteria are specified against which their level of importance can be determined. The ideas are then assigned a letter dependent on their importance. ‘A’ items are very important, ‘B’ items are somewhat important, and ‘C’ items are only marginally important. Only items classified as ‘A’ are permitted to progress to the following round of evaluation.

Using ABC Analysis

Step 1: Determine criteria with which ideas can be graded. These may be their cost, feasibility, customer friendliness, or a combination of criteria.

Step 2: Group ideas into one of three categories, ‘A’, ‘B’, or ‘C’, dependent on the extent to which the predefined criteria has been met. The ‘A’ category represents cases where the largest amount of criteria has been met, the ‘B’ category a moderate amount, and ‘C’ a low amount.

Step 3: Ideas graded ‘A’ are subjected to further scrutiny or development.


ABC Analysis

ABC Analysis – Template