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CLASSIFICATION AND CODIFICATIONAbhinandan Sawant Rohan MathkarRutuja WaghSandeep TajaneCLASSIFICATION

28-Sep-152Classification & CodificationCLASSIFICATIONClassification of materials is the process of grouping of items into few categories, according to some criteria.Example: Classification of domestic articles into cloths, kitchen wares, grocery, electrical gadgets, furniture, consumables, non-consumables, etc. 28-Sep-153Classification & CodificationCLASSIFICATIONClassification of materials is the process of grouping of items into few categories, according to some criteria.28-Sep-154Classification & Codification

28-Sep-155Classification & Codification

Why Classify ???Handling large no. of itemsPlanningProcurementStorageAccountingOBJECTIVES OF CLASSIFICATION Classification of materials is required to Evolve procedures of planning and control of materials in a class.Decide systems of storage and issue of materials in a class.Devise accounting and evaluation procedures common to all materials in a class.

28-Sep-15Classification & Codification6BASIS OF CLASSIFICATIONMaterials are classified according to following basis:Stage of conversion processNature of materialsUsability of materials

28-Sep-15Classification & Codification71. STAGE OF CONVERSION PROCESS28-Sep-15Classification & Codification8

// Make the diagram82. NATURE OF MATERIALSRaw MaterialsConsumablesChemicalsInflammable ItemsFurniturePackaging Perishable MaterialsEmptiesSupplies

28-Sep-15Classification & Codification9RAW MATERIALSDIRECT Identified as Individual product. Charged directly to cost of product.Ex:Cloth in garment manufacturing.Steel in scooter manufacturing.Ink & glue in paper manufacturing.

INDIRECTUnidentified with the individual product.Not charged to the cost of the product.Ex:Coolants used in machines.Cotton waste used to clean machines after work.Sand paper used for polishing.

28-Sep-15Classification & Codification10CONSUMABLESMaterials which either cease to exist or change their shape during manufacturing process.Cannot be used for second time.Ex: Coal, lubricants, cotton wastes, pencil, paper, etc.

28-Sep-15Classification & Codification11CHEMICALSMaterial (Substances) in the form of powder, liquid, tablets, etc that undergo certain process according to certain formula.Needs to be stored, preserved, issued very cautiously since they involve risks.Ex: acids.

28-Sep-15Classification & Codification12INFLAMMABLESMaterials which are highly susceptible to fire.Should be stored farther from the main store with complete fire-fighting equipment.Ex: petrol, kerosene, paints, etc.

28-Sep-15Classification & Codification13FURNITUREMovable items.Usually bulky.Large storage space.Requires maintenance, repairs & replacements.Ex: tables, chairs, almirahs, stools, etc.

28-Sep-15Classification & Codification14PERISHABLE MATERIALShort lived and decay easily.Need to be stored at temperature controlled rooms to prolong their life.Ex: Milk, vegetables, eggs, medicines, etc.Ex: Some chemicals and rubber parts, etc.

28-Sep-15Classification & Codification15PACKAGINGWrapping paper , straw , saw dust, etc.Protective covering wax , grease, etc.Containers boxes , glasswares ( jars, bottles ), metal containers ( cans, barrels ).Storage of packaging material needs space as they are bulky.28-Sep-15Classification & Codification16EMPTIESUsed packages which are scrapped after use.Some empties are recycled or reused.Others are stored in heap in stockyard for its disposal or to be burned.Ex: wooden cases , metal containers , glasswares, etc.

28-Sep-15Classification & Codification17SUPPLIESMaterials used up in running the plant or in making the products but are not part of any product.Miscellaneous brooms, cotton waste, toilet paper, cleaning powder, etc.Welding , soldering & tinning material electrodes, gas, welding rods, solders, etc.Abrasive material sand paper, etc.Oils and greases.Office supplies, Electric supplies & Printed forms.

28-Sep-15Classification & Codification183. USABILITY OF MATERIALSServiceable and Unserviceable MaterialsSemi-Finished and Finished MaterialsDead Stock ItemsObsolete Items

28-Sep-15Classification & Codification19SERVICABLE & UNSERVICABLESERVICEABLE ITEMSMaterials temporarily out of order and can be put to use after repairs.Ex : Chucks , fixtures, hacksaw blades needing grinding, etc.

UNSERVICEABLE ITEMSMaterials that are gone out of order permanently. Ex : Wornout tools , steel chips from machines , ash from boilers, etc.

28-Sep-15Classification & Codification20SEMI-FINISHED & FINISHEDSEMI-FINISHED ITEMSPartially processed. Supplied parts.Ex : Preformed Plastic Bottle Tube.

FINISHED ITEMSFully processed products.Ex : Plastic Bottle.

28-Sep-15Classification & Codification21DEAD STOCKEquipments that have definite life & cannot be written off before expiry date of their life.Ex : office equipment , material handling equipment, tools , measuring instruments, etc.

Items that went out of date because of new invention etc and are no longer profitable.

28-Sep-15Classification & Codification22OBSOLETE ITEMSINVENTORIES CLASSIFICATIONProduction InventoriesMRO InventoriesIn-process InventoriesGoods-In-Transit

28-Sep-15Classification & Codification23PRODUCTION INVENTORIESStandard Industrial Items purchased fro outside (broughtouts).Non Standard Items (Purchase items).Special items manufactured in the factory itself (Works made parts/piece parts).

Maintenance, repairs and operations supplies.Consumed during process of manufacturing but do not becoming part of the product.

28-Sep-15Classification & Codification24MRO INVENTORIESIN-PROCESS INVENTORIESItems in semi-finished conditions.

Materials which have been paid for but not received by the stores.

28-Sep-15Classification & Codification25GOODS - IN - TRANSITCODIFICATION

28-Sep-1526Classification & CodificationCODIFICATIONCodification in an industry is the systematic concise representation of equipment, raw materials, tools, spares, supplies, etc, in an abbreviated form employing alphabets, numerals, colors, symbols, etc.Example: - Client Code, Policy Number, PAN, UID Number, Bank Account Number, Vehicle Number, Telephone Number, Pin code, Examination Seat Number, Student Reference Number, etc.

28-Sep-15Classification & Codification27BENEFITS OF CODIFICATIONAccurate and logical identification.Avoidance of long and unwieldy description.Prevention of duplication.Product simplification (Variety Reduction).Efficient purchasing.Minimization of clerical work.Efficient storekeeping.Accurate and reliable recording and accounting.Easier computerization.Others.28-Sep-15Classification & Codification28STAGES OF SCIENTIFIC CODIFICATIONIdentification.Classification.Codification.28-Sep-15Classification & Codification29IDENTIFICATIONAssigning Nomenclature / Description.Specifications & Technical Name.Ex : A 20 drill : Drill, HSS, Taper shank, 20 Standard length.Above Example description are meant for Kardex cards and stores vocabulary(stores catalogue) only.28-Sep-15Classification & Codification30CLASSIFICATIONArrangements of items into groups according to pre-determined patterns.Grouping of items are done on the basis of Description, As per supplier, As per origin, Value and Function of the item.28-Sep-15Classification & Codification31CODIFICATIONAllocation of specific codes to the items within the broad framework of the selected system.Codes should have following characteristics :Simplicity.Brevity.Flexibility.Uniqueness.Coding symbols.Layout of the code.Self decoding.Consistency.Convenient for accounting.

28-Sep-15Classification & Codification32BASIC SYSTEMS OF CODIFICATIONAlphabetical System. Numerical System.Alpha-Numerical System.28-Sep-15Classification & Codification33ALPHABETICAL SYSTEMExample: Acids(AC)Sulfuric Acid(AC-SU) Nitric Acid(AC-NI) Carbonic Acid(AC-CB)28-Sep-15Classification & Codification34NUMERICAL SYSTEMSequential CodeBlock CodeDecimal CodeExample: Tools(40)- Drills(01)- Centre drill B25 (40.01.01)- SS Drill 4mm (40.01.02)- TS Drill 20(40.01.03)- and so on.

28-Sep-15Classification & Codification35ALPHA-NUMERICAL SYSTEMExample: Packaging & Packing Materials (PM)Packing Box 18(PM-501) Packing Box 24(PM-502) Drums 100 liters(PM-503)Drums 150 liters(PM-504)Drums 200 liters(PM-505)

28-Sep-15Classification & Codification36FUNDAMENTAL SYSTEMS OF CODIFICATIONThe Brisch System.The Kodak System.28-Sep-15Classification & Codification37BRISCH SYSTEMEstablished by Mr. E. G. Brisch jointly by Mr. J. GombinskiDivides all facets of organisation into number of main categories according to nature of business.The first block gives major classification (Usually 2 digits) E.g: Packing, Raw Materials, Fasteners, Stationary, Tools, Finished Products, etc.The second block gives next level of classification (Usually 2 digits) based on the type and kind of materials.The third block gives the lowest level of classification normally the specifications.28-Sep-15Classification & Codification38BRISCH SYSTEMA 10 digit typical class breakdown in an engineering company is given below:0 Organization and operation.1 Primary Materials2 Boughtout commodities3 Components4 Sub assemblies and assemblies5 Tools and portable equipment6 Plant and Machinery7 Building, Services and utilities8 Scrap and Waste9 Reserved

28-Sep-15Classification & Codification39BRISCH SYSTEMExample:22.15.453Where, In Main Class,2 - Boughtout items2 - FastenersIn Sub Class,1 Type (B.S.W. Threads)5 Kind (Screws c sunk)In Minor Class,4 Material (SS)53 - Size (1/2 X 1 kg )28-Sep-15Classification & Codification40KODAK SYSTEMOriginated by Eastman Kodak Company.Based on numerical system of codification and combines all good other points.The system employs ten digit codes.The Materials are classified according to Purchase categorisation rather than their nature.Divided into few broad classification called Basic Classification.

28-Sep-15Classification & Codification41KODAK SYSTEMThe basic classification is restricted to 100.Each class is then further divided into sub classes.Eg 40( Cutting Tools), 0 (drills)Each sub class is again further sub dividedEg 40-0-01 (Augers)28-Sep-15Classification & Codification42KODAK SYSTEMExample:

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// Make this table43COLOR CODINGHere colours are used to identify the content.Generally Colour code are used for:Identification of pipelines.Raw materials.Lubricants.Etc.

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DABBA CODING SYSTEM28-Sep-15Classification & Codification46

THANK YOU

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