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Material classification: definition & important aspects for buyers
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Material classification in a nutshell:
Material classification is the systematic categorization and grouping of materials according to defined criteria such as quality, intended use or strategic importance. For purchasing, this enables an efficient procurement strategy, optimized supplier selection and targeted inventory management.
Example: A car manufacturer classifies its 20,000 individual parts into 5 main categories (A-E) according to value share and supply risk, whereby the A-parts account for 70% of the procurement volume with only 8% of the number of articles and are therefore managed particularly intensively.
Contents
Material classification: basics and application
What is material classification?
Material classification is a systematic process in which materials and goods are divided into specific categories or classes based on defined criteria. The aim is to create a clear structure and overview of the materials available in order to optimize processes in purchasing, warehousing and production. The standardization of material master data facilitates communication within the company and with suppliers.
Core elements of material classification
Importance of material classification in purchasing
Material classification is of central importance for purchasing, as it creates transparency regarding the procurement volume and the variety of materials. It enables purchasing processes to be standardized, requirements to be bundled and negotiations with suppliers to be conducted more efficiently. It also helps to reduce costs by avoiding excess stock and optimizing inventories.
Guideline: Material classification - Strategic principles for efficient inventory management
Implementation of material classification in purchasing
The systematic classification of materials provides companies with a transparent structure of their items. This makes it easier to identify potential savings and optimizes procurement processes.
Practical example: Introduction of eCl@ss at a production company
Initial situation:
A mechanical engineering company has over 10,000 different materials in its ERP system. Many items are created multiple times or named inconsistently, which leads to inefficient ordering and high stock levels.
Step 1: Selecting the classification system
The company decides to implement eCl@ss as a standardized classification system.
Step 2: Definition of relevant attributes
Attributes such as material type, dimensions, material and intended use are defined.
Step 3: Classification and coding
All materials are classified according to the defined attributes and receive a unique eCl@ss code.
Step 4: Data cleansing and maintenance
Duplicates are removed and the material master data is updated regularly.
Result:
Purchasing can now identify similar materials and bundle requirements across departments. By bundling quantities, better conditions can be negotiated with suppliers. In addition, stock levels are reduced by 15% as excess stock is avoided.
Evaluation and strategic findings
✓ Critical success factors
→ Standardized classification: Consistent use of a uniform system such as eCl@ss as the basis for effective materials management
→ Data quality management: Continuous maintenance and updating of material master data to avoid redundancies
→ Cross-functional collaboration: close coordination between purchasing, technology and production when classifying materials
⚠ Challenges and limitations
→ Initial complexity: high effort for initial classification of existing materials
→ System adaptations: Technical integration into existing ERP systems requires careful planning
→ Change management: overcoming ingrained processes and habits in the material system
Future trends and strategic implications:
"The digital transformation is opening up new dimensions in material classification and management."
→ AI-supported classification of new materials
→ Automatic detection of substitution potentials
→ Digital material master data platforms
→ Predictive analytics for demand forecasts
Conclusion on material classification
Material classification is an indispensable tool for modern companies that creates transparency and optimizes processes. Systematic categorization and uniform standards not only reduce costs, but also significantly increase efficiency in procurement and warehousing. The initial implementation effort is more than offset by long-term benefits such as better supplier negotiations, reduced stock levels and optimized procurement processes. With a view to future developments such as AI-supported classification, the strategic importance of this tool will continue to increase.
