According to APICS, an item number is “a number that serves to uniquely identify an item.” Every raw material, component, WIP and finished good must be assigned an item number for ease of identification, traceability, countability and costing. There are generally two types of item numbers: Meaningful and Nonmeaningful.
Meaningful item numbers provide the following advantages to the user:
- Facilitate understanding and recollection of item specifications (i.e. color, size) and product family.
- Easier to detect miscoded items thereby increasing organizational efficiency
Nonmeaningful item numbers also provide the following benefits:
- Use of shorter or numerical item numbers to facilitate data entry
- Item numbers can be automatically generated via software
- Randomization makes it easier to accommodate item number growth
Either method is suitable to use depending upon organizational preference; however, there are guidelines that should be followed in order to eliminate confusion:
- All departments within the organization must use the the same set of item numbers for ease of communication
- Unique item numbers must be assigned to all new products; even when an existing product undergoes an engineering change
- Item numbering systems should be designed to accommodate growth
- Do not reassign obsolete inventory numbers; historical records are extremely important and you never know when you may need to reference these records
- Item numbers should be short, consistent and the use of confusing characters (i.e. I vs 1, O vs 0) should be avoided
Can you think of a scenario in which nonmeaningful item codes would be preferred over meaningful item codes? Your comments and feedback are appreciated!