Page 34 - DMGT525_MATERIALS_MANAGEMENT

Unit 3: Codification and Standardization

6. PVC Notes
7. Polypropylene

Self Assessment

Fill in the blanks:
1. Codification is basically a/an ……………….. system for each item of the inventory.
2. Without ……………………… the control over inventory by rigorous exercises such as
inventory techniques is not very effective.
3. For a good quality …………… system a unique identification is a prerequisite.

3.2 Characteristics of a Good Coding System

A few points to be taken into consideration while codifying the items in the inventory are given
below:
(a) Brevity: The codification system should avoid long and unwieldy description. This implies
that the codes should consist of minimum possible number of digits. The size of the code
would normally be dictated by the number and range of items and the number and types
of applications of the data pertaining to the item.

Example: For the pencil code 07.39.1236, the last digit representing the price range may
be deleted if such information is not needed.
(b) Logical: The coding system should be logically fit for the needs of the users and the
methods of data processing employed. For the example of pencil code, the last
digit representing price range should have an increasing price range with the value of the
digit increasing, that is, a value of digit as 8 may indicate a higher price range of say
` 2.00-2.25.

(c) Flexibility: The code design should be flexible to accommodate changes without disturbing
existing codes. We are familiar with the library coding system in which codes do never get
disturbed by addition of new books and all books to come in future are easily accommodated
by the existing code structure.
(d) Uniqueness: Each code must be a unique representation for the item it identifies. For
instance, an inventory item number or employee identification code must identify one
and only one inventory item or employee.

Notes The code structure must be easily understood by various users. It should be as
simple, practical and meaningful as possible.

(e) Proper Choice of the Coding Symbols: While a code may have numbers, alphabets or a
mixture of both, certain precautions should be taken in selection of the symbols. Characters
with similar appearances should be eliminated. For example, the letters 0, Z, I, S and V
may be confused with the numbers 0 (zero), 2, 1, 5 and U, respectively. Where possible,
letters that sound the same should be avoided (for example, B, C, D, G, P and T or M and N).
(f) Layout of Codes: The layout of code should be equal in length. For example, a code 001-
199 should be preferred over 1-199. Codes longer than four alphabetic or five numeric
characters should be divided into smaller segments for human judgments.

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