ABS ANALYSIS THROUGH ANALYSIS OF INDUSTRIAL PRODUCTS

ABS ANALYSIS THROUGH ANALYSIS OF INDUSTRIAL PRODUCTS

Boyjigitov S.K.

Samarkand institute of economics and service

Assistent of the Marketing department

After independence, Uzbekistan has entered the world stage with confident steps. Production of competitive and export-oriented products has been launched to attract domestic and foreign investments, to modernize and diversify the industry, to establish new industrial enterprises equipped with modern equipment, to use advanced technologies. The industry of our country is recognized as a modern state with dynamic development, with increasing economic power and potential. This is due to the fact that during the years of independence, all sectors of the industry play an important role in the development of high-tech industries.

In his address to the Oliy Majlis on January 24, 2020, the President of the Republic of Uzbekistan Shavkat Mirziyoyev deep structural reforms have begun. Modernization and competitiveness programs are underway in 12 leading industries. As a result, last year’s economic growth was 5.6%. Industrial output increased by 6.6% and exports by 28%. In 2019, our gold and foreign currency reserves increased by $ 2.2 billion and reached $ 28.6 billion… ”[1] This creates the need for new competitive advantages, creating new jobs and increasing the income of the population, which will enhance the specialization of the national economy and diversify the production structure of the world economy through intensive introduction of innovative technologies and modern scientific achievements in industry. is the relevance of the issue.

Marketing strategy is a social process aimed at meeting the needs of the enterprise by adapting the capabilities of the enterprise to the market, developing strategies for future goods, sales, communications, and free competition of consumers’ needs and wishes.

Marketing strategy[2] - systematic analysis of the needs and requirements of the main consumer group, formation and development of effective products and services, and better targeting of the target customers than other competitors; It is a set of basic ways of selling and promoting it.

There will be opportunities for developing and implementing strategies through industry marketing. Strategic planning in industrial marketing is focused on defining the future performance of the enterprise and defining the complex management of the enterprise. Formation of marketing strategies in industrial enterprises increases the role of marketing activities in enterprise management.

Strategic ideas should become the firm’s action plan, in which the strategic objectives are set, and the tools for implementing the chosen development strategy are identified. The success of the firm in the near future depends, first and foremost, on the financial coherence of the various lines of its operations. In the long term, its development and development will depend on the ability to foresee changes in the market in a timely manner, and the ability to adjust its structure and product portfolio accordingly. In order for such strategic, active ideas to be effective, they must be consistent and focused on “organizing the future”, preparing for action that leads to expected results.

An important criterion for the strategic development of industrial enterprises is the use of the product diversification policy. Increasing the competitiveness of products involves the timely adoption of decisions on modernization and improvement of the product range, the introduction of new products, increasing the competitiveness of the products, and the removal of old products.

The most important function of enterprise marketing is the development of the product range. Commodity range is a group of goods which are linked or have a common range of prices for the same use and sale at the same point of sale. In describing the concept of “assortment”[3] the Russian scientist Pankrukhin lists 4 main features: a set of goods grouped by functional features, consumer characteristics, points of sale and price.

According to many scholars, the basis of the marketing activity of the enterprise is its “product range policy”. The most important factor in assessing the competitiveness of an enterprise is its assortment policy.

We are looking at the analysis of the enterprise assortment policy, which is “Jomboy don mahsulotlari”, which is the object of our research in the field of commodity assortment policy.

The main activities of “Jomboy don mahsulotlari” are the production, sale and profit of flour and flour products. The wider the range of production for the enterprise, the greater the level of consumer satisfaction and, on the one hand, to dominate competitors in the market.

Table 1

Analysis of the product nomenclature of JSC

“Jomboy don mahsulotlari” (as of 2019)

As can be seen from the table, the major share in the volume of flour was made by flour products with 59.0%, and the main revenue came from sales of flour products with 73.9% of the income. There is also a demand for fodder, which has averaged 21.8%. Seed grain is also a separate component of the nomenclature, with their share in revenues for the same period making 3.9%. However, we see that biomaterials and broilers have a lower share in revenue.

It should be noted that the volume of grain and grain products offered by the enterprise is not the same. To determine this, we use the ABS analysis method.

ABS analysis is a method for improving the effectiveness of an enterprise’s trade policy. Often, ABS analysis is used as a method to optimize product range and stock to further increase sales. In other words, the purpose of the ABS analysis is to identify the product or group of goods that will bring maximum benefit to the enterprise. This form of analysis is based on a study by economist Poreto: 20% of output and 80% of profit. When assorting products, all products are classified into 3 groups:

Group A. High value goods make up 20% of the product range, generating 80% of sales.

Group B Low-quality goods make up 30% of the product range and provide up to 15% of sales.

Group S The demand is very low, 50% of the product range, and generates 5% of sales.

The stages of the ABS analysis.

1. Determining the range of products manufactured by the enterprise;

2. Calculation of profit rate for each product;

3. Determine the effectiveness of each group;

4. Classification of products by enterprise significance.

         By dividing products into such groups, an entity may have a report that identifies which product group is the main source of income.

ABS analysis has the following advantages:

1. Simplicity and quickness of the method can ensure high sales in the future. This method can be used in any enterprise since it does not require much information and calculations.

2. Reliability of results. The results will allow the company to focus its capital and resources on promising goods. Managing a high-value group can ensure the financial sustainability of an enterprise.

3. Optimization of time and resources. The application of this method allows to optimize additional resources and time.

4. Multivariate analysis. Ability to apply this method in other areas of the enterprise.

Other areas of using the ABS analysis method at the enterprise:

·     optimization of the commodity nomenclature;

·     Identification of key suppliers, suppliers, regular customers;

·     increasing the efficiency of the creation of reserve warehouses;

·     Optimization of production process;

·     financing and management of marketing expenses.

There are several drawbacks to this method of analysis, which are as follows:

1. One-dimensional method. ABS analysis does not allow for complex multidimensional grouping because of its simplicity.

2. Grouping of goods is based on quantitative indicators only, that is, qualitative indicators are not taken into account.

3. Lack of harmful goods group. Availability of goods that are harmful to the enterprise, except income generating goods. In this method they are ignored, but in this case the method is converted to the ABSD method.

4. Impact of external factors on realization. This method does not reflect the impact of different external economic factors - seasonality, changing demand and demand dynamics, competitors, etc., despite the alternative of trading.

Now we proceed to the stages of ABS analysis of the product nomenclature of JSC “Jomboy don mahsulotlari”:

1. Determining the range of products offered by the enterprise:

The range of products of the enterprise includes flour products, feed mix, seed grain, bio-products and broilers.

2. Calculate the average return rate for each assortment (Table 2):

Table 2

Rate of income on nomenclature

3. Determine and increase the share of each nomenclature in total revenue (Table 3):

Table 3

Nomenclature’s share of total revenue

4. Classification of products by enterprise significance (Table 4):

Table 4

Classification of Nomenclature by Importance

In our case, Group A flour and mixed fodder accounted for 95.7% of total revenue, Group B seed yield accounted for 3.9% of total revenue, and Group C bio-products and broiler revenue. As it turns out, Group B nomenclatures are the main sources of income.

ABS analysis is a type of product that allows you to determine product ratings according to these criteria and to determine the range of these products.

The industry of our country is recognized as a modern state with dynamic development, with increasing economic power and potential. After all, in the years of independence, high-tech industries in all areas of industry have been developing steadily. Large-scale work on modernization, technical modernization and diversification of production, wide introduction of innovative technologies, import of modern equipment has a positive impact on the growth of the economy.

Conclusion

In summary, the use of AVS analysis of the enterprise’s nomenclature allows to increase the production of products required for the enterprise, and to exclude non-profitable products from the enterprise’s assortment, or to create new options and to maintain the market by improving the product.

Moreover, the assortment of the enterprise will be analyzed and products with low sales volume and non-profits will be excluded from the assortment, or conclusions will be made on modernization of the product.

Reference

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