UNIT FIVE

CODING

Coding is the means of

giving an item or goods a
unique identification or
identification tag.
It can also be defined as a
system of using symbols and
alphanumeric to classify a
set of items to give a brief
accurate reference.
A bar code (often seen as a single word, barcode) is

the small image of lines (bars) and spaces that is

affixed to retail store items, identification cards, and

postal mail to identify a particular product number,

person, or location.
The code uses a
sequence of vertical bars
and spaces to represent
numbers and other
symbols
The following are the major
forms of coding. These are
Numerical,
Alphabetical,
Alphanumeric and Bar
Coding.
 Forms of Coding
Numerical Coding
This is a means of identifying
goods with numbers or figures.
E.g. 123/050/150/ or
/12/56/32.
Alphabetical Coding;
This is a means or forms of
identifying goods or items
with letters or alphabet
E.g. /EMQ/RED/DC/
Alphanumeric Coding;
This is a form of coding where
by letters and numbers or
figures are mix to identify
goods. E.g. /KP/CRI/562
Bar Coding: this is a form of
coding system where by bars
are used to identify goods.
E.g. colour coding in which
colours bars are used to
identify goods
 THE NEED FOR CODING

Because of the complexity of the

modern industrial organization, the
range and type of items held in stock
by that organizations are
correspondingly complex and many.
This means that a system
has to be developed that
can identify and classify the
wide range of items held in
stock, quickly and
efficiently.
Stores management have resolved
that codes must be developed in
other to be able to identify all the
items held in stock, without the use
of long descriptive and complex
definitions (we all use some form of
coding in every situations, e.g., EU =
European Union, GH=Ghana).
 THE TYPES OF CODING SYSTEM

Each organization has its own need

and resource, and this will influence
the type of coding system employed.
The following are some of the
common systems used;
 End – Use Coding
This is a situation where items are coded
by virtue of its end – use in terms of the
operation or product, a example
complete range of stocks (wheels,
engines, gear boxes, fittings etc.) all
stored in designated areas for use only in
connection with production.
 Colour Coding
This is a system based on the use of
colours to code and identify items held in
stock.
It can be a very effective means of
identification, but it has the major
disadvantages of being very limited in its
range.
Once the basic distinct colours (i.e.
Red, blue, black, white, yellow, green
etc.) have been used, it can no longer
be removed.
This type of colour coding is used
mostly in connection with chemicals
and gases, in timber stores and to
identify consignment in transit.
Supplier’s Code
This is where the stores adopt the
coding system of the supplier of the
goods. However, it can be very
confusing when more than one
supplier is involved or when the
sequence of the supplier’s system of
coding is not understood.
Nature of the Item

This is where each type of item held

in stock is classified and coded
according to the item’s basic nature
and make-up. It is the most widely
system of coding in modern stores
management.
The Range of Stock to be
coded
The more complex and variable the items
held in stock are the more complex the
code will be.
A very complex system will need a great
deal of time and skill to introduce and
maintain codes of items.
Therefore, stores personnel will
require specialised training if require
the system to be successful.
If the system has to be computerised
or manual it requires certain level of
skills for its operation.
The role of computers in
stores management is fast
growing and numerical
stores coding is essential
for computer data storage.
 Advantages of a Coding System
The principal advantages of a good
coding system are listed below:
•It avoids repeated use of long
descriptive titles
•Accurately identifies all items
•Prevents duplication of
items
•Assists standardisation
and the reduction of
varieties
•Provides a foundation for an
efficient purchasing
organization
•Forms a convenient basis for
the sorting and recording of
documents
•Simplifies mechanical
recording
•Is convenient for central
analysis of unit storehouse
records
•Can be employed as a basis
for stock-control accounts
•Simplifies pricing and
costing
•May be used as a
storehouse location system
In the commercial and industrial
world, where many thousands of
different items are likely to be
used by an organization, the use
of plain language descriptions to
communicate requirements is
impossible.
Time would be wasted in
communication and
verification and the risk of
misinterpretation would be
high.
When a large number or a wide
variety of materials and supplies
are in use, it is almost always
impossible to identify elements
clearly enough by using names or
description alone.
It, therefore, becomes
necessary to devise a
system of coding. Once a
system of coding exists, it is
called the materials
vocabulary.
This section outlines
some of the principles
involved in devising and
operating a coding
system.
 Characteristics of an Efficient Coding
System

Any efficient and successful

identification of items held in stock is
judged by the way the coding results.
That is, if it can easily be identified
and located in the stores’ warehouse.
From the knowledge of
stores management,
different factors will judge
the efficiency of the coding
system.
 What makes coding system efficient
The code must cover every item
held in stock: Items held in stock
must always be known so that a
proper code is assigned for easy
identification and location.
 Flexibility

Every year there are changes in the way

products or items are designed, packaged and
produced.
In all these, any alteration and variation have to
be undertaken by the basic coding system
which must make room for increase in stock,
range or scope.
 Consistent format and logic of system
It is really necessary that, the moment the
basic coding system is established (eg. RM for
raw materials, S, for stationery, E, for electrical
etc), it should be maintained throughout the
coding of items in that establishment.
It will be difficult to locate an item if different
coding systems are assigned to a particular
product or item.
The coding system must meet the
organization’s needs
Any organization that has its products
or items held in stock coded.
Organizations with different needs
and problems will have a wide range
of coding systems.
It must be noted, however that, the basic point
that must be needed and recognized should
suit the needs of the organization no matter
the situation.
For instance, the coding system used by
TOSHIBA would be far more complex than that
used by the stores attendant at Koforidua
technical university, even though the basic logic
would be adhered to.
 Essence or Importance of
coding
•Easy identification
•Saves time in location
of materials or items.
•Stock checking becomes easy.
•Detection of theft and
pilferage is very easy.

•Ensure the security of goods,

materials and items.
 Stores Vocabulary
The various departments who need the coding
system must be given the necessary training and
introduction about the various information in
relation to the code.
This piece of information must be kept in the “store
manual” or “catalogue” which has all the items
held in stock and its full description which must be
updated to cover all items held in stock.
Some potential users of the stores code
who must have the store manual or
catalogue are:
•Purchasing department
•Suppliers
•Production and other user departments
•Invoice checking and accounts.
 Role of other Departments in Stores
Coding

Sometimes, other departments outside the stores

will need to use the code and as such must be
consulted when the coding is being done/introduce.

There are factors which will be of help when the

coding is done which must be discussed with other
departments in the organisation.
 Factors to Consider when introducing a Store Code

Several important factors have

to be carefully considered
before a coding system is
introduced into the stores
system.
•Logic of the code used
(i.e. whether colour,
nature of the item,
etc.)
•Common
classifications and
headings under which
the stock will be
coded.
•Channels of
communication to ensure
that, stores are made
aware of new item to be
introduced or held in stock.
The different departments which
will need to have a copy of the
stores vocabulary or manual, e.g.
production, distribution,
engineering etc. must be
informed.
 Advantages of Stores Coding

Simplicity
Storekeepers are able to identify and
locate items held in stock when
simple series of letters and digits are
used which goes to save time and
effort.
Accuracy of selection
When the exact code for an
item is given, the storekeeper
would be able to select and
issue the item without any
difficulty if the code is correct.
Stores marking
A coding system prevents duplication of
effort, not only in relation to selection
procedures and authorization, but also in
terms of stores marking and labeling. Thus
coding will help the storekeeper to mark-
up his storage area efficiently and faster.
Assistance to purchasing
Stores coding system generally helps
the purchasing function in its
operation. The coding will help inform
the purchasing department knows
the level of stock and goods or items
needed to be purchased.
Reduction of errors
There is always some difficulty
to make errors in identification
since the exact nature of a
stores code and its basic logical
approach is followed.
Assists the supplier
In some situations, the organization may give the
various codes of items listed in the stores manual
or catalogue to a major supplier.
The supplier will then use the various codes given
by the purchasing department to supply the
various items needed by the purchasing
department.
The administrative cost is reduced as it saves time.
Basis of a stores location system
Since proper coding is done using a
systematic format, it helps in the process of
stores location where each section or part
of the store has a certain type of product
that is held within a locality.
Any client that comes to the store is
assisted by the attendants using the code
number to locate the item requested.