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Material classes: Definition & important aspects for buyers
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Material classes in a nutshell:
Material classes are systematic groupings of materials according to common characteristics such as technical properties, intended use or economic importance. This classification enables purchasing to implement an efficient procurement strategy, structured supplier selection and optimized inventory management.
Example: An automotive supplier categorizes its 12,000 materials into 8 main classes (A-H), whereby class A "Electronic components" with 3,500 items accounts for the largest purchasing value of 45% of the total volume and is sourced from 25 specialized suppliers.
Contents
Introduction to purchasing controlling: material classes
What are material classes?
Material classes are systematic groupings of materials and services that are procured by a company. They are used to group similar or related items under common categories. This classification facilitates the organization, management and analysis of procurement data and supports companies in gaining transparency about their purchasing activities and optimizing processes.
Core elements of material classification
Significance for purchasing
Material classes play a crucial role in procurement management as they form the basis for strategic purchasing decisions. Clear structuring enables companies to better control their expenditure, make supplier relationships more efficient and exploit economies of scale. Classification makes it possible to bundle requirements, negotiate prices and streamline internal processes, which ultimately leads to cost savings and an increased competitive advantage.
Introduction of a material classification system
A structured material classification system enables companies to improve their procurement processes by systematically categorizing materials. This creates transparency, reduces duplication of work and enables more efficient purchasing decisions.
Practical example
Situation: A medium-sized mechanical engineering company purchases numerous components from different suppliers. The lack of classification leads to confusing inventories and missed bundling opportunities.Step 1: Define main categories
The company defines main categories such as metal parts, electronic parts and consumables.
Step 2: Create subcategories
Subcategories such as screws, nuts and sheet metal are created under metal parts.
Step 3: Assign article
All purchased materials are assigned to the corresponding classes in the ERP system.
Result: By analyzing the expenditure per material category, the company realizes that it spends €100,000 annually on screws. This enables negotiations with suppliers on volume discounts and reduces the number of suppliers for this category.
Evaluation and strategic findings
✓ Critical success factors
→ Hierarchical structure: Logical structure of main and sub-categories for optimum transparency and control options
→ System support: Integration of the classification system into existing ERP and procurement systems
→ Standardization: Uniform classification rules and nomenclature across all divisions
⚠ Challenges
→ Initial classification: High time expenditure for initial introduction and assignment of existing materials
→ Dynamic adaptation: Continuous maintenance and updating for new material groups or changed requirements
→ Interface management: coordination between purchasing, technology and logistics when defining material classes
Future trends and implications:
"Intelligent material classification is becoming a key factor for digital procurement strategies."
→ AI-supported automatic classification of new materials
→ Predictive analytics for category-based demand forecasts
→ Integration of sustainability criteria into the class hierarchy
→ Global standardization of material classes for international procurement
◆ Strategic recommendations for action
→ Establishment of a cross-functional team for the implementation
→ Development of a change management concept for user acceptance
→ Regular review and optimization of the class structure
→ Training employees in the correct use of the system
Conclusion on material classification
Material classes form the foundation for efficient procurement management. By systematically categorizing materials and services, companies can optimize their purchasing processes, reduce costs and make strategic decisions based on data. The success of a material classification system depends largely on well thought-out implementation, continuous maintenance and the active involvement of all departments involved. In view of future-oriented technologies such as AI and predictive analytics, the importance of structured material classes will continue to increase.
