Using ABC analysis, the relationship of effort (time, resources) to outcome (output, profit) is shown for certain elements (e.g., products, customers, suppliers). Here, a classification of the elements into the three classes A, B, and C.
The results are ordered in descending order of magnitude. In class A, a high proportion of the results are achieved with a small proportion of the funds. In class C it is exactly the opposite. This can be used e.g. show which products are most involved in sales or contribution margins (Class A) and which contribute least (Class C).
The ABC analysis is the standard instrument for complexity management. It provides clues as to where complexity in the company can be reduced. Another instrument on the subject is the complexity curve.