MM/U2 Topic 3 Nature and Process of Codification, Advantage Of Codification
Nature of Codification
- Data availability of items and resources that provides easier access to information about supply and storage.
- Reducing of costs, reducing of inventories, reducing of record keeping, reducing of staff, reducing the diversity of supply.
- Efficient coordination in procurement, better determination of requirements and economical budgeting of supply.
- Using of a common language of supply which is understandable to all participants in all logistics operations.
- Improvement of interoperability between countries.
- Descriptions of codified items with features provide precision searching and choosing components or equipment in the development of item.
- Easier Military Material Standardization work because of precise description including layout, dimensions, materials, surface treatment and others.
- Promotion of domestic defense industry around the world through the implementation of their own products in
- Database which includes details of manufacturer, supplier and any other relevant information. This makes it easy to retrieve the data when required.
- Better tracking of vendors.
Methods of Codification
- Alphabetical codification
- Numerical codification
- Mnemonic codification
- Combined alphabetical & numerical codification
- Decimal codification
- Colour codification.
(1) Alphabetical Codification
In this method, letters of the alphabet are used to describe an item. Sometimes combinations of alphabets are designed to give a mnemonic meaning e.g.,
- SM-Steel Mild
- SMA-Steel Mild Angle
- SMC-Steel Mild Channel
Since the numbers of Alphabets are limited, even with a combination of letters as above there is a serious limitation to the number of items which can be uniquely coded under this method. Further, sometimes the same combinations of the alphabets are capable of different meanings.
It is also not easy to evolve a combination of letters to give a mnemonic meaning in which case alphabets have to be used without attaching any particular meaning. This method is not suitable except for tiny organisations where the number of items to be coded is very, very limited.
(2) Numerical Codification
Against the alphabetical system, the numerical system is based on numbers, simple numbers, block numbers or dash/stroke numbers. Examples are:
(a) Simple Number:
One number is allotted against each material, with some other number being kept as provision for other items.
(b) Block Number:
The numbers are so designed as that material of similar nature or group comes under one block. As, for example, raw material block comes under 1-1000, consumable oil and lubricant materials block comes under 1001-2000, packaging materials block come under 2001-3000, jigs, tools and fixtures materials block come under 3001-4000 and so on.
Again, Raw material block may be subdivided into small blocks according to the category of materials, as for example, iron, steel and allied group, copper, nickel, alloy etc.
1-100, 101-200, 201-300, 301-100, 401-500 respectively.
(c) Dash/Stroke Number:
A further improvement over the block numbering is Dash/Stroke’ numbering system. A Dash or stroke is put against the main element of the material in order to code the material in the same group.
(3) Mnemonic Codification
When we use letters to help memory, we call such a system a mnemonic system. This system is therefore, a special application of the alphabetical system. Alphabets are allotted to an item according to its initials or abbreviation. For example
Mnemonic system alone is confusing since one symbol may convey impression of two or more objects, as for example, ‘FIT may mean furniture or fuel or St may indicate stationery or steel.
(4) Combined Alphabetical & Numerical Codification
This system, as the name suggests, is the combination of both the alphabetical and the numerical system described before. In order to improve upon the alphabetical system, and also to take advantage of the numerical system, this system allows alphabets to be retained to a limited extent and then uses the number codes.
The materials are first grouped under some main classes and then it allows sub grouping under numbering system. The table 14.2 states the illustration for combined alphabetical and numerical codification system.
(5) Decimal Codification
Under this system of codification, within the range often numerals 0-9, some significance is attached to every digit in the code. Thus, the whole range of items in stores can be codified without difficulty. Generally 7 to 8 digits will be found sufficient for all practical purposes, but it may also be extended upto 10 digits in order to accommodate any other characteristic of the material desired to be described.
The entire ranges of items have first to be classified under a broad class. Further classification will follow some group patterns, according to their particular nature. Further sub-divisions will follow for type, size, grade, shape, condition etc.
Thus, digital numbering order will be first digit will signify the broad class, the second digit, will signify the group, third digit will signify the sub-group, fourth digit will signify the type, fifth digit will signify the size, sixth digit will signify the grade, seventh digit will signify the shape and eighth digit will signify the condition and so on.
This means that after the stores’ items have been primarily classified under broad classes, each group and sub-grouping will again allow 8 different classifications according to type, size, grade etc.
(6) Colour Codification
This system uses colour marking for easier and more ready identification on metals, bars, pipe, drum and cable. Common colour codes for metals are as follows.
Advantage of Codification
- Rational codification is of utmost importance in order to locate incoming and outgoing materials quickly and accurately, to provide necessary information concerning the exact whereabouts of the materials and to supply correct and timely data to the concerned department.
- By codification long description of materials is avoided. Names of materials are simplified by choosing symbols which are simple, clear and free from duplication. Moreover, by it secrecy can be maintained which is the essential part for the smooth functioning of the business.
- Coding system also simplifies mechanical recording as limitations of machines, prohibit the use of long descriptions because of the time it would take to record or the mechanical complications involved. The Kardex or Visidex system or mechanized purchased card system or electronic computer can be operated only after the store items are suitably codified.
- A large number of store items are reduced to smaller group of items in a systematic way which helps in standardization of materials and encourage various uses of the same item.
- Because of codification, receipt notes, issue notes, stock taking sheets and in-fact, all basic stored departments, can be stored into code number order posted easily to stock records which are arranged in the same order.
- The proper maintenance of the stores also depends, more or less, upon the rational codification of stores. To keep the stores in desired condition over a period of time, may require very simple or elaborate measures, depending on the nature of materials, the length of time in storage and the rate of deterioration.
The codification is one of such measures because durable, perishable, costly, cheap, heavy, light, frequently used goods etc. are segregated into different rational groups and taken care of by proper storage devices accordingly.
- The central stock records can be kept in stores-code order showing how much is in stock and what the movement is for each stock holding point separately with a total for the organisation as a whole. This helps in buying and transferring of stock from one unit to another as and when necessary.
- By codification, the accounting work of the various items becomes easier. Moreover, by it the possibility of errors and frauds is minimized which helps in increasing the efficiency of the concern.
- The code number provides the reliable index for all items in the price lists. This feature of coding is emphasized by the use of lists of maker’s parts by purchasing department-
Particularly in the case of production materials, the code numbers can be arranged so as to correspond with cost headings, thus simplifying material costing.
- Since every different type of item has different code because code numbers are given after seeing the quality, size, form of the item. So, it is helpful in identifying each and every item accurately. This code system distinct the two items separately through the items of similar names.
- Codification enables the organisation to convey buying instructions easily and quickly and divide the purchasing department into commodity sections each engaged in the buying of a particular range of stores.
This is especially helpful where there is a central purchasing for different units widely dispersed. Thus, it also helps in getting bulk discounts.
- Since similar items are grouped together, an item coded once cannot be given another code. Thus, the particular item can be easily located. So, it helps in removing duplication. If in any concern, coding system is not adopted naturally, there will be the problem of locating the items whenever, they are required by the concerned department.
- If full and accurate description is used on all store items, the clerical work increases. Even abbreviated descriptions soon lead to confusion. So, it is very necessary that effective code system should be adopted especially where concern deals in large number of items.
- The national codification also helps in indication of materials or supplies to be ordered, to be withdrawn from the store house and to be used in the manufacturing of the product and in the planning of the product.