Codification is a process of assigning a unique code to an item for its easy and complete identification. Code of an item is a unique set of numeric / alphanumeric values that describes the detailed nomenclature and specification, unit of measurement, location of storage and many other related information about an item.
It’s brief and acts as a communicating mode for the item for different people and agencies.
Cataloguing refers to assigning a distinct code, writing complete and detailed specifications of an item and listing all such items existing in an inventory.
Classification and codification of items are a necessity for efficient control of inventory. They not only facilitate proper accounting and identification of Stores but also contribute immensely in standardization and variety reduction.
Why Codification / Cataloguing is required
Any inventory consists of a number of items obtained from different sources / suppliers. Each supplier identifies its material in his own unique way.
Thousands and thousands of such materials enter into the inventory record. These items, depending upon the requirement, may require replenishment and thus their details may be required by many departments. Also, since requirements may be of repetitive nature there is a need for assigning a distinct code within the organization for all these materials coming from different sources, bearing different numbers.
One of the ills of inventory listing is creation of duplicate record of an identical item. Same item may enter into an inventory record in different names. It’s cataloguing and codification that eliminates such duplication chances and thus saving important money for the organization
How is codification / cataloguing done
Any item that enters into a firm is codified provided it needs proper accounting for the present and the future.
For example , an item , a part of a machine that may be required in future also shall require a unique code and detailed catalogue as it may be referred to repeatedly in future.
Usually, all the items forming part of an inventory are catalogued and once prepared this catalogue is distributed among the different agencies such as indenting, planning, and Finance, Purchasing and Stores departments.
Such items include those that come to stores or remain for use at their user location.
Codification / cataloguing is basically an identification system for each item of the inventory. There are often three broad approaches to developing a suitable identification system:
Arbitrary approach:
As the name suggests, this approach does not use any design for codification. Rather, as and when an item is received by Stores in its receiving bay, a running and unique serial number is assigned to it. This number becomes the code of the item for subsequent use at different stages. While this system is the easiest one to use, it does not help in scientific management of inventory. For example, say a particular spare part of a machine is received in the stores and is assigned a running unique number 999XXX as its code. Then if the same item is received at any other point of time the code number shall not be the same i.e. 999XXX as by that time a lot many other items might have entered into the firm and might also have been assigned different running and unique code making it impossible to \assign a previous code to any item. Arbitrary approach is useable only where perhaps items are non-repetitive and the inventory management need not be scientific.
Symbolic approach:
Also known as intelligent code system it assigns code in a manner that the same item is not allotted two different codes and also a code, because of its design, can be used to tell many things about an item.
The system uses either a numeric codification system or an alphanumeric or mnemonic system. Under the numeric system, a set of numeric code (length pre-decided) is assigned to each item where different parts of the code describe, of an item:
Class
Subclass
Unique running number of that item
Location of storage
Suppliers’ code etc
For example:
| 2 | 145 | 098 | 344 |
| Class | Subclass | Running number | Location code |
Thus the code of this item shall be a 10 digit code, 2145098344 and it shall remain always so for this item. It shall then be easy to communicate about this item among the concerned agencies. Similarly, there can be code using alpha numeric value like AA223B234 with different alpha and numerical value describing some pre-decided meaning. It is also called mnemonic system. Both numeric and mnemonic systems are symbolic systems as the codes under it describe a symbol for identifying an item. Since this code has certain logic it is also called intelligent code and this system is in wide use everywhere.
Use of drawing numbers
In many firms using complex drawings through which part numbers etc are drawn, use their drawing numbers as codes to identify an item. Since the drawing number for a firm remains unique, assigning a code on this basis assumes a unique code for that item and hence confirms the requirement of unique identification for the item.
Process of codification
Decide if the firm wants to go for arbitrary system, symbolic system or engineering drawing system
List the inventory items
- Define the class of items such as (for example):
- Abrasives
- Bearings
- Belt and beltings
- Bolts, nuts & washers
- Brooms & brushes
- Cans & containers
- Chemicals & reagents
- Cloth, leather & rubber
- Electrical
- Gases
- Glassware
- Oil & lubricants
- Pipe & Pipe fittings
- Photographic items
- Safety items
- Tools & tackles
- Stationeries
- Welding materials
- Rolls
- Refractory
- Raw Materials
- Building materials
- Define the sub class under each class
Depending upon the number of classes, their subclasses and probable number of items under each sub class decide the length of codes which shall remain fixed for all the inventory items (10 digit, alphanumeric etc.)
Start assigning codes as per the detailed list of inventory
Who does the codification?
Normally, it is the custodian who does the codification for the items he keeps in his inventory.
However, in firms of substantial sizes where good number of items are received on regular basis , codification is usually done by a team consisting of representatives drawn from Stores, user department and Industrial engineering department. Still, for Automatic procurement items the responsibility lies with the Stores department.
When codification?
Codification identifies an item. Also it acts as a communicating medium for an item among the different users of that item in whatever way such as Stores, User department, Planning department, Finance, Purchasing etc. Thus, as soon as the item enters into Stores (if item is a new one), it is codified. Once codified, the same code is used in the cycle of procurement, throughout and forever.
