PRESENTATION

ON
CODIFICATION OF THE
MATERIALS

GIVEN BY:
PROF. SHINDE
GROUP MEMBERS:
KUNAL PATEL
ATUL PATHRABE
RITWIK RAJE
ASHISH SAWANT


CODIFICATION OF THE MATERIALS
Objectives:

Need and role of codification
Standardisation and simplification of materials from the viewpoint
of the functions of planning, control,purchases, inventory, stores,
etc.
Importance of codification;
Describe the design and implementation of codification systems.
Portray the use of computerization of materials using codification.
Structure
Introduction
odification
odification Systems
!dvantages of odification

INTRODUCTION
Due to the growth of industrial activity and diverse "ind of industrial
re#uirements, a large no. of organizations have to store a large number
of items, often running into several thousands and even lacs. $herefore,
there should be some means of identifying them. ! common practice is
to describe the items by individuals names. Since several departments
use the same item, they call the same item by different names and store
them in different places. %ne of the most useful techni#ues of &'aterials
'anagement(( is a rationalized codification system for properly
classifying e#uipments, raw materials, components and spares to suit to
the particular needs of any organization.
%ld system of functional codification is no longer suitable for the
already large and increasing inventory range of stoc"s and stores. It has
come across several instances of duplication of stoc" of the same item
under different nomenclature and codes and under different stores
categories where such items are common to more than one consumption
center. It is necessary that items are brought together for the purpose
standardization, variety reduction and the application of other modern
materials management techni#ues such as value analysis, operational
research etc. so that the ma)imum return could be secured with the
minimum of inventory range and values. Standardisation leads to
cheaper *easier procurement and cost of replacement can also be
reduced.
CODIFICATION
$he process of giving name or symbol or numerical code to a particular
item. $his code can be a no. alphabet or both.
+g. ,lue colour for painting iron parts is used and its code no. can be
pb-./0.
$o avoid confusion and to purchase , store and supply to production
department a specific item of rec#uired #uality and characteristic. $he
material management identify every item by uni#ue code.
!n article of stores is identified by its simple description or
nomenclature. Difficulty arises when the same article is "nown by
different names.
1or e)ample;
chipping goggles, grinder goggles, or white goggles are
one item but may be stored separately under same
nomenclature as different items.
%ne store"eeper might classify an item as Sal
!mmoniac, whereas a research chemist might identify
it under the name of !mmonium hloride, only to be
told that it is not available.
! classic e)ample comes from the 2.3. !n electric
firm found that a simple item of a screw with a width
of 4567 and length of 87 had as many as 996 names
depending on the type of usage and the department
using the screw. ! few names are:
;a< Plunger,
;b< dowel pin,
;c< roller,
;d< locating peg,
;e< drivepin
;f< pinion spindle
;g< pin mould holding,
;h< motor drive spindle,
;i< trip armpin,
;=< armature stud etc
.
$wo firms in >estern India have been able to reduce the variety of
lubricating oils from 4. and 4- to ? and @ respectively. !t a control
depot of State Aoad.
$ransport !uthority, /64 hardware items were reduced to 9./ through
codification. In a large electrical firm, it was found that e)cessive stoc"s
of copper items were due to designers specifying too many sizes.
! planned reduction of say -. per cent in number of items would not
only reduce the material cost, but would also correspondingly bring
about reduction in routine wor", stores purchase, inspection, production
and accounts. In short, a rationalized system of codification would
reduce the number substantially and at the same time ma"e their
identification an easier =ob avoiding lengthy description and confusion.
The need fr Cdific!tin arises because of the following reasons:
;i< Speed,
;ii< 2nambiguity,
;iii< Saving of +ffort,
;iv< Space Saving on forms,
;iv< +ase of classification,
;v< 'echanization.
Ch!r!cteristics f Cdes
!s far as possible uniform dimension say, the metric system should be
adopted.
i< ode should be Simple.
ii< ode should be uni#ue.
iii< oding should be compact, concise and consistent.
iv< ode should be sufficiently fle)ible to meet future demands.
"!sic Re#uire$ents f ! Cde
i< Identify commodities
ii< Name commodities
iii< Specify commodities
iv< lassify commodities
v< Indicate interBrelationships between commodities
vi< Indicate the source of origin of commodities
vii< Aefer specifically to an individual and uni#ue commodity.
Objectives f Cdific!tin
In order to identify the items correctly and logically for processing the
transactions, and to facilitate easy location in stores, a codification
system should be evolved with the following ob=ectives.
Accur!te !nd %&ic!% identific!tin:
! separate code allotted to each of the items available in the warehouse
indicating the size, #uality price, usability, special characteristics,
specification etc.
'reventin f du(%ic!tin:
!ll items are separately codified and are arranged in a logical order.
Similar materials are grouped together ;such as stationery items,
hardware items< and given a code.
St!nd!rdis!tin !nd reductin f v!rieties:
1or codification, grouping of identical item is done and it enables the
stores to e)amine the entire range of items. It facilitates the elimination
of those varieties in place of which other varieties of the same #uality
can be used. $his reduces the number of varieties to a minimum. If
proper standardisation is achieved and the number of items is "ept at the
minimum, it will considerably reduce investment in various items as
well as the cost of inventory carrying.
Efficient (urch!sin&:
$he filling up of purchase re#uisition, and preparation of purchase
orders are simplified by the use of codes which easily indicates the
materials re#uired. ,uying instructions to the suppliers become easy and
#uic" if there is proper understanding of codification by the suppliers.
+fficient recording and accounting codes leads to effective stoc"
control, efficient recording and it results in yielding accounting. hances
of mista"es are minimized. Pricing and valuation also become more
accurate and reliable.
+asy locating, inde)ing and inspection of all materials is possible.
E!s) c$(uteri*!tin:
$he computer wor" better with codes then with long description of
materials.
CODIFICATION S+STEMS
%ne of the prere#uisites of classification and codification is to "now the
basic nature and characteristics of all materials used in an enterprise and
then classify them in broad categories and then to group and subBgroup
them in logical progression of "inds, type and sizes etc.
!s for e)ample,
Aaw materials, Semi processed 'aterials, 'echanical ;Products and
e#uipment<, +lectrical ;products and e#uipments<, hemicals ;!llied
products and chemical processing e#uipment<, Caboratory and office
;e#uipment and supplies< etc. can be classified, grouped and subB
grouped first. !fter classification in a broad way, a code or symbol is
allocated to each of element, the code or symbol so allotted should be
simple, fle)ible and it should be easily adaptable in order to e)ploit the
full advantages of codification.
$herefore, codification is a process of representing each item by a
number, the digits of which indicate the group, the subgroup, the type
and the dimension of item. $he first two digits normally represent the
ma=or groups, such as raw tools, oil stationery, etc. $he ne)t two digits
indicate the subBgroups, such as ferrous, nonBferrous, etc. Dimensional
characteristics of length, width, head diameter usually constitute the
further three digits and the last digit is reserved for minor variations.
'any organizations in the private and public sectors li"e, Aailways and
DDSD have their own system of codification. $he number of digits in a
code may typically be somewhere between eight to thirteen.
$here are several methods of codification but the most useful method is
that,which give along with standard form, the history size and type of
material.Eowever, a great care should be ta"en to develop the code to
satisfy a variety of users.
Some of the systems of codification are:
9< !rbitrary system
-< Numerical System
4< 'nemonic system or alpha numeric system
0< Decimal system
/< ,risch system
8< 3oda" system
Arbitr!r) S)ste$s
!rbitrary system as the word Farbitrary( indicates, is based on the serial
number under which a material is received and the same is allotted as a
code number.
2sing this approach, all inventory items are simply assigned arbitrary
numbers in se#uence as they are added to the stores account. +ach item
thus has a discrete number, but it bears no systematic relationship to the
numbers assigned to related items. $wo similar items or two mating
parts may have numbers several thousand digits apart. 1or e)ample, if
bearings are received and suppose a number /.?. has already been
allotted to the previous item received, then the code number of these
bearings will be /.?9. $his system has the advantage that there is no
fi)ed limit for codifying any number of items. 'oreover, one cannot
"now the history of the items. $his is the reason why the system is not
popular.
Nu$eric!% S)ste$
! numerical system assigns a si) to ten digit code number to each item.
$he first several numbers usually indicate the classification to which the
item belongs, the ne)t several numbers typically indicate the subBclass,
and the last three numbers are usually uncoded. $he following e)ample
illustrates the concept:
4 9-? .9@ /.4
Deneral lass Deneric lass SubBclass Specific item number
$his ten digit code number is one firm(s stoc" number for a G by H inch
stainless steel s#uare nec" carriage bolt. $he first digit indicates that the
item is a purchased part as per the following general classification :
9< Aaw material
-< 'anufactured parts
4< Purchased parts
0< 'A% supplies
/< >or" in process
$he ne)t three digits indicate the &eneric c%!ssific!tin of the item. In
this case it is a f!stener, code number 9-?. !ll items are generically
classified by their nature and carry a number from ... to ???.
$he ne)t three digits indicate the sub,c%!ss to which the item belongs. In
this case, .9@ is a carriage bolt with a s#uare nec". !ll fasteners are subB
classified into a class bearing number from ... to ???.
$he last three digits indicate the specific part number of the item. In this
case,all part numbers under /.. designate plain steel and numbers over
/.. represent various alloys; /.4 is stainless steel, G by H inch.
Mne$nic S)ste$
! mnemonic system functions much li"e a numerical system. Eowever,
it combines nu$eric !nd !%(h!betic nt!tins in its symbols. 1or
e)ample, the carriage bolt described under the numerical system in the
following manner :
' F! "CS -./
' denotes a (urch!sed (!rt0
F! is a f!stener ,
"CS stands for b%t0 c!rri!&e0 1ith ! s#u!re nec20 !nd

-./ represents the s(ecific nu$ber f the b%t .
'nemonic systems, particularly where a small number of items are
involved,fre#uently ma"e visual identification easier because they are
more descriptive and they are often shorter. !s more and different types
of items are added to the inventory, however, this advantage diminishes
because the number of good symbols are limited.
Deci$!% S)ste$
Decimal system of codification may said to be the univers!% in its
wor"ing. It is simple and easy to codify items under this system. Day by
day, the number of items in almost every sphere of industry is
increasing. Eence, codifications should be such as may meet the
increasing re#uirements and it should also be si$(%e0 h!nd) !nd e!si%)
!d!(t!b%e3 2nder this system items up to -0..0... can be easily
codified and at the same time each symbol will give the history, size,
specification and complete picture of the item. 'odern industrial
concerns are generally adopting 4 t 55 di&its for codifying the
materials.
In the decimal codification system, each digit indicates some thing or the
other.
1or e)ample :
9st digit BSection
-nd digitBlass
4rd digit BDroup
0th digit B$ype of materials
/th digit BSize, part no. specification or any other details re#uired
+)ample:
Section . I Plants and machinery
9 I 'achine and hand tools
- I onstruction materials etc.
lass . I Eand tools
;1or sectionB9< 9 I 'achine tools
- I Eolding tools

4 I utting tools
0 I $ripped cutting tools etc.
Droup . I utters
;1or sectionB9< 9 I 1iles
- I 3nurls
4 I Scrapper etc.
Su((se ! fi%e f%!t0 sin&%e cut s$th0 si*e 6- $$ is t be cdified3 It
1i%% be indic!ted b) 5st0 6nd !nd /rd di&its !s 5/5. 1urther fourth and
fifth digit will be classified as :
7th di&it t indic!te the sh!(e f the fi%e, thus
. I for flat
9 I for hand
- I for s#aure
4 I for round
0 I for tappered etc.
-the di&it t indic!te the teeth f fi%e, thus
. I for single cut, rough
9 I for single cut, coarse
- I for single cut, smooth
4 I for double cut, coarse etc.
$he 8th0 4th !nd 9th di&its indic!te the si*e f the fi%e in $$.
$herefore, file flat,single cut smooth size -/ mm will be codified as J
5/5.6.6-3
"risch S)ste$
$he ,risch system consist of seven di&its applied in three st!&es. $he
items are grouped into suitable preliminary categories, such as
assemblies, subBassemblies,components and off the shelf items. !fter
these preliminary categories, items are grouped within the respective
class in order to bring similar items together. $he ,risch system through
it consists only of seven digits, is #uite comprehensive as the basis is on
logical ma=or groupings.
:d!2 S)ste$
$he 3oda" system consists of 9. digits of numerical code. $he logic of
ma=or grouping is based on sources of supply. !ll materials are divided
into 9.. basic classifications, contributed only by procurement
considerations. 1or instance, a bolt is listed as hardware item if this is
listed in hardware catalogues and available with hardware suppliers. If
this bolt is available as a part of the machine, it will be available under
maintenance.
AD;ANTA<ES OF CODIFICATION
Cet us discuss some advantages of codification in material management.
a<!s a result of rationalized codification, many firms have reduced the
number of items.
b< It enables systematic grouping of similar items and avoids confusion
caused by long description of the items.
c< Since standardisation of names is achieved through codification, it
servers as the starting point of simplification and standardization.
d< It helps in avoiding duplication of items and results in the
minimization of the number of items, leading to accurate records.
e< odification enables easy recognition of an item in stores, thereby
reducing clerical efforts to be minimum.
f< If items are coded according to the sources, it is possible to bul" the
items while ordering.