May 29, 2009

Item Numbering Schemes

What's in a name?

Well, the answer depends on who you ask. There are myriad ways of numbering items and all kinds of factors go into deciding how a company should go about this very basic of tasks in their day to day operations. Let's take a look at what the options are, and what that means for your enterprise applications.

The following list of numbering schemes represents an ascending level of intelligence in item numbers - in other words, how much you can tell about the item by just reading the item number. It also often represents an ascending level of complexity in managing item numbers, as well as an ascending order of the length of the item number –
• Dumb numbers – plain, sequential numbers, generally with a fixed number of digits
• Alphanumerics - one level of intelligence higher than dumb numbers, these are basically composed of an alphabetical prefix (generally indicating a product type) followed by a dumb number
• Simple composite item numbers - the next level of intelligence consists of numbers in a hyphenated composite format where one segment indicates a product family and the other segment is a running sequence
• Intelligent item numbers - a multi-segment item number where each segment indicates some characteristic of the item such as item family, sourcing type, storage location, etc.

Which item numbering scheme is right for a company depends on a number of factors. For example, for a hi-tech manufacturing organization, where a lot of items are ordered via electronic purchase orders, stocked and assembled by automated bots, nothing more than a dumb number is necessary. However, in the same industry, a company that manufactures a lot of consumer products and has to stock spares for many generations of products, may find a composite item number (that can indicate a revision etc) a lot more useful.

At the other extreme is a job shop or industrial manufacturing organization (such as aircraft engine or heavy machine manufacturing), where visual identification of items on the shop floor is part of the daily picking and assembly operations. In such a case, it is essential for the item numbering scheme to be somewhat or highly intelligent so that the shop floor worker can immediately spot if he has picked a slightly different or incompatible item.

Alternatively, a combination of dumb and intelligent item numbering may be utilized. In my first job as a cost accountant, which was 30+ years ago, our finished products were identified with a dumb number but the raw materials components utilized intelligence in the numbering. In fact, I can still remember what 254-125-25-04 represented. This was flat bar, 1.25” wide x .25” thick, in 6061-T6 aluminum. In an environment that stocked many, many different types of raw stock, intelligence in the raw materials numbering scheme was extremely helpful in identifying the material on the rack. The finished goods products were identified by labels applied to a mounting flange, so intelligence in the numbering scheme was not a requirement.

As you can see, there is no right answer to what the best item numbering scheme is. It really depends on the nature of your business and how you need to identify your products. What is important is utilizing the best scheme for your business, which means gathering information from all the stakeholders in your company and arriving at the best compromise scheme that satisfies most of the stakeholder requirements.

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