Warehouse Management

WAREHOUSE MANAGEMENT
Codification
 Codification is the process of assigning a number or symbol to each store item, along
with a name, in order to make it easy and convenient to identify.
 Codification is necessary because it involves the assignment of logical and systematic

numbers or alphabets (or both) to help in the simple but accurate identification of the
materials.
Codification
The use of codification also leads to efficiencies in the following areas:

 Purchasing
 Recording
 Accounting
 Computerizing pricing
 Costing
 Indexing
 Inspection
Systems of Codification
 Alphabetical System
 Numerical System
 Decimal System
 Combined Alphabetical and Numerical System

CHARACTERISTICS OF A GOOD CODING
SYSTEM
 Flexibility: it should be able to keep up with future changes.

 Precision: all codes should be unique.
 Brevity: codes should be precise otherwise it would lose its intended purpose.
 Comprehensive codes should follow a given system this should enable people understand
the code.
 Standardization: helps in standardization of items in the inventory
Advantages of Codification
 a) As 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.
 It helps in avoiding duplication of items and results in the minimization of the number of
items, leading to accurate records.
 Codification enables easy recognition of an item in stores, thereby reducing clerical efforts
to be minimum.
 If items are coded according to the sources, it is possible to bulk the items while ordering
Standardisation
 Mass production techniques of industrial production are based on the principle of
uniformity and interchangeability of many parts, components and material used in the
production process.
 Standard products can be manufactured on a mass scale and their production cost can be
kept minimum.
 Standardisation leads to cheaper and easier procurement and cost of replacement can also
be reduced
Standardisation
 In our country Indian Standards Institution (ISI) is the national body which deals with
standardisation at national level.
 There are various committees dealing with different industries who formulate national
standards
Standardisation
 ISI certification mark,
 British Standard (BS),
 American Standards Association (ASA) or the American Society for Testing Materials
(ASTM),
 International Standards Organization (ISO)

Standardization
 Standard are meant for economy, efficiency and convenience while there may be a general
acceptance as to be desirability of standardization, there is no possibility of complete
standardization.
Standardisation
 Through standardisation and variety reduction, rationalized codification becomes easier.
 The role of standardisation and variety reduction in inventory simplification has therefore
real significance in industrial materials management field.
 For product standards the benefits may be broadly summarized under the headings variety
reduction, interchangeability, and availability:
 the effects of variety reduction are well known and can mostly be assessed in terms of hard
cash, taking due account of the additional cost reduction effects on associated parts and
operations;
 interchangeability as a result of standardization leads to higher productivity and lower
manufacturing costs.
 These benefits are relayed to the users as a result of increased competition. lnterchangeability
is also very important to erection, installation, maintenance, and repairs;
 easy availability implies that an adequate number of varieties are always in stock.
 This means shorter lead times and less capital tied up on the user side.
Standardisation
 Standards are at the basis of all mass production.
 When one purchases a new spark plug for a Scooter or Car, he knows that it will screw
into the engine head all right. Why? Because spark plug threads are standardized.
 Standards are carefully established specifications for products, materials.
 Standardisation is the way which leads to economical products.

Steps involved in standardisation procedure are
as follows
 With the help of market research, sales statistics, etc. decide what to sell in future.
 Then, define a standard range of products.
 From the range, ask the designer to develop minimum variety of components to match the
range.
 Introduce new materials, components, etc. if necessary.

 How standardization and codification helps in cost reduction?
  interchangeability as a result of standardization leads to higher productivity

and lower manufacturing costs. These benefits are relayed to the users as a result
of increased competition.
 What are the 4 types of standardization?
 There are at least four levels of standardization: compatibility, interchangeability,

commonality and reference. These standardization processes create compatibility,
similarity, measurement, and symbol standards.
ADVANTAGES OF STANDARDIZATION
 All sections of a company benefit to some degree from standardization.
 Design department
 Fewer specifications, drawings and part lists have to be prepared and issued. Thus
more item is available to develop new designs or to improve established designs
ADVANTAGES OF STANDARDIZATION
 Better resources utilization.
 Lesser design mistakes and design alterations.
 Less qualified personnel can handle routine design work

Disadvantages of Standardisation
 Reduction in choice because of reduced variety and consequent loss of business or customers.
 Changes in public taste seriously affect a company producing only standardized product range.
 It becomes difficult to introduce new models because of less flexible (existing) production
facilities and due to the high cost of specialized production equipment.
Applications of Standardisation
 Finished products, e.g., cars and televisions.
 Sub-assemblies and components, e.g., automobile gearboxes and autoelectirc bulbs.
 Material Standardisation, e.g., both of direct materials (plain carbon and alloy steels, are
welding electrode core wires, etc.) and indirect materials (such as oils and greases).
 Production equipment standardisation, e.g., that of machine tools, presses, welding

equipments, etc
INTERNATIONAL STANDARDISATION
 If one has to do business globally, one has to adhere to international standardisation.
 It becomes essential to follow international standards if a country has to capture the export
market.
 The work of international standardisation is carried out under the aegis of ISO (International
Organisation for Standardisation).
 Most industrialised countries are members of ISO.

CLASSIFICATION
 Classification of materials involve grouping of items according to a predetermined criteria

since large number of items are regurlary handled by warehouses and therefore their planning
and co-ordination need special attention.
 The objectives of classification is to facilitate planning, co-ordination and control of materials

in warehouses according to the class assigned.
 to ensure uniformity in purchase procedures, inspection methods, and storing and issuing
procedures for each of the different class of materials.
 Classification is of great value in material and component standardisation.
 Classification aims at systematically grouping items together by their common features and
sub-dividing them by their special features.
 A system of classification and coding is necessary for the design of new products within the
range defined.
SIMPLIFICATION
 The process of standardisation logically leads to simplification or variety reduction.
 This implies reducing unnecessary varieties and standardising to the most economical sizes,
grades, shapes colour types of parts and so on.
 In large organization handling lakhs of item, it is quite possible that there are several
effectiveness.
 The concept of simplification is closely related to standardisation.
 Simplification is the process of reducing the variety of products manufactured (known as

variety reduction).
 Simplification is concerned with the reduction of product range, assemblies, parts materials
and design.
ADVANTAGES OF SIMPLIFICATION
 Simplification involves fewer, parts, varieties and changes in products: this reduces
manufacturing operations and risk of obsolescence.
 Since simplification reduces variety, volume of remaining products may be increased.
 Simplification provides quick delivery and better after-sales service.
 Simplification reduces inventory and thus results in better inventory control

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WAREHOUSE MANAGEMENT

 Codification is necessary because it involves the assignment of logical and systematic

The use of codification also leads to efficiencies in the following areas:

 Combined Alphabetical and Numerical System

 Flexibility: it should be able to keep up with future changes.

 c) Since standardisation of names is achieved through codification, it servers as the

 ISI certification mark,

 British Standard (BS),

 International Standards Organization (ISO)

 Through standardisation and variety reduction, rationalized codification becomes easier.

 Standards are at the basis of all mass production.

 Standards are carefully established specifications for products, materials.

 Standardisation is the way which leads to economical products.

 Then, define a standard range of products.

 Introduce new materials, components, etc. if necessary.

  interchangeability as a result of standardization leads to higher productivity

 There are at least four levels of standardization: compatibility, interchangeability,

 All sections of a company benefit to some degree from standardization.

 Better resources utilization.

 Lesser design mistakes and design alterations.

 Less qualified personnel can handle routine design work

 Finished products, e.g., cars and televisions.

 Sub-assemblies and components, e.g., automobile gearboxes and autoelectirc bulbs.

 Production equipment standardisation, e.g., that of machine tools, presses, welding

 If one has to do business globally, one has to adhere to international standardisation.

 Most industrialised countries are members of ISO.

 Classification of materials involve grouping of items according to a predetermined criteria

 The objectives of classification is to facilitate planning, co-ordination and control of materials

 The process of standardisation logically leads to simplification or variety reduction.

 Simplification is the process of reducing the variety of products manufactured (known as

 Since simplification reduces variety, volume of remaining products may be increased.

 Simplification provides quick delivery and better after-sales service.

 Simplification reduces inventory and thus results in better inventory control

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