Ozburn Hessey Logistics (OHL) is one of the biggest international companies that offers full services in supply chain management worldwide with the popular slogan “doing more with less”. The great supply chain partner offers a wide range of services such as storage of goods and import and export of consultancy services. Even though OHL does not produce its own products, it offers storage services in its state of the art warehouses with desirable conditions ideal for the clients’ products. The giant company provides a comprehensive transportation services (land, rail, sea and air) at a highly competitive rate. Additionally, their services are strikingly reliable thus suitable for all products at hand. It has well over 130 interconnected distribution centers and sites across the world.
ABC classification system connects costs to all categories of products and services based on their appropriate activity drivers. Its main goal is to place all types of indirect costs into different actions and building measurement, also referred to as the cost driver, for every action. This system spots different task carried out within the organization, picks the cost depending on the character and scope of the action, and finally gives these costs to products and services depending on their utilities. ABC classification system can be used to reduce total inventories within the chain supply companies.
Within a company, different items have got different values and frequency of utilization; some are accorded high and others low values. The ABC system therefore places these items according to their utility and contributions to the total company costs. This system therefore helps identify the space to be availed, items to store, records, degree of control and the kind of follow up, hence cut a lot of cost on clerical work and the company becomes more competitive.