Importance Of Material Coding And Classification In Store Management In Manufacturing Industry
(A Case Study Of Pz Industries Aba)
Material coding and classification play a pivotal role in the efficient functioning of store management within the manufacturing industry. In this context, material coding refers to the systematic assignment of unique identification codes to different types of materials, while classification involves categorizing these materials based on various attributes such as type, size, and usage. This structured approach enhances inventory control, streamlines procurement processes, and facilitates accurate demand forecasting. Effective material coding and classification contribute to cost optimization by minimizing errors in orders, reducing lead times, and preventing overstock or stockouts. Moreover, they enable better decision-making regarding resource allocation and production planning. By integrating these practices into store management, manufacturing industries can enhance operational efficiency, reduce waste, and ultimately elevate the overall effectiveness of their supply chain processes.
For any organization continuous existence and compete favourable with its counterparts in the same industry, its workers must be given sufficient training technically and otherwise to be able to manipulate the machinery and politices at their disposal. One of the major tremendous emphasis placed on the importance of material coding and classification in a manufacturing company from current realization that human reasons available to any organization constitute it life and therefore the need for development in order to obtain efficient performance standard it is of which training is the core and particularly important activity in companies.
Title page
Approval page
Dedication
Acknowledgement
Abstract
CHAPTER ONE
1.0 Introduction
1.1 Background Of The Study
1.2 Statement Of The Problem
1.4 Research Question
1.5 Significance Of The Study
1.6 Scope Of The Study
1.7 The Limitation Of The Study
1.8 Definition Of Terms
CHAPTER TWO
2.0 Literature Review
2.1 Introduction
2.2 Importance of coding in store management
2.2.2 Accurate identification
2.2.3 Basis for sorting store document
2.2.4 Basis of control accounts
2.2.5 Simplified pricing and costing stores
2.2.6 Efficient need for stores vocabulary
2.2.7 Catalogue library
2.2.8 Present system
2.2.9 Consultation
2.2.10 Originating sheets
2.2.11 Distribution
2.3. Types of stores coding
2.3.1 Sequence coding
2.3.2 Significance digit code
2.3.3 Group classification code
2.3.4 Colour coding
2.4 Method of coding
2.4.1 Nature of item
2.5 problems encountered in coin and classification
2.6. benefit of coding and classification
CHAPTER THREE
3.0 Research Methodology and methodology
3.1 Introduction
3.2 Research Design
3.3 Source and method of data collection
3.4 Population And Sample Size
3.5 Sampling Technique
3.6 Validation And Reliability Of The Instrument
3.8 Method Of Data Analysis
CHAPTER FOUR
4.0 Presentation and analysis data
4.1 Introduction
4.2 Presentation of data
4.3 Analysis Of Data
4.4 Interpretation Of Results
CHAPTER FIVE
5.0 Summary , Conclusion And Recommendation
5.1 Introduction
5.2 Summary
5.3 Conclusion
5.4 Recommendation
Bibliography
Appendixes
1.0 INTRODUCTION
According to Macgrathy (2008) classification and codification of materials are steps in maintaining stores in a systematic way. Materials are classified in such as way that storing, issuing and identifying of materials become easy generally, materials are classified on the basis of their nature. Materials can also be classified on the basis of quality and utility, for example, materials may be classified on the basis of their nature. Materials can also be classified s raw materials, consumable stores, components, spares and tools. Thus classifying materials on different bases such as nature, quality and utility is called classification of materials.
For the purpose of identification and convenience in storage and issue of materials, each item of material is give a distinct name such a process of giving distinct name. such a process to different items of materials is called codification of materials. Good store-keeping requires proper classification either by their nature or by their usage. The former method of classification or classification by the nature of materials is more commonly used. Under this method of classification, the various items of stores are divided into specific groups like construction materials, belting materials consumable stores, spare parts and so on the items are grouped so that each item of stores will be conveniently codified on alphabetical, numerical or alpha-numerical basis and given a distinctive store code number.
1.1 BACKGROUND OF STUDY
The PZ Plc Aba incorporated for production in 1964, charged with the responsibility of production of household products. As a result of the Nigeria Civil war, the company was forced to shut down in August 1967, and most of the machineries and rehabilitation work commences in March 1971, and May 1971, the company went back into production.
In carrying out this function of production of many materials required. The PZ company having recognizing the function and need for proper care of these materials appointed stores personnel and stores manager, and also established a purchasing unit charge with the responsibility of supplier selection, ordering , progressing, acquisition and producing these materials, whilst the store manager (including his personnel) was charged with the responsibility of storing inspecting and developing system for effective identification coding and classification of the materials if the stock items are given a scientific identification code, a complete catalogues can be assembled so that when a part is required, it is possible to determine it in stock. The stock records themselves will then indicate the exact stores location. The British Standard Institution has done great deal of work in establishing standards for material product and when a standard specification number is quoted what is been referred to.
Even where it is not possible to develop sophistication coding system, or arranged in logical lines will be of great benefit to a business in avoiding errors in ordering, issuing and pricing etc. the store manager of PZ Plc Aba through her grouping of materials has arranged their materials on logical lines for easy identification thereby avoiding errors in locating, ordering, issuing etc of items of stock in the organization. The code appears on all documents relating to the movement and use of materials and are marked against appropriate bin and racks.
As a matter of fact, the store manager recognizes the need for the use of store vocabulary or catalogue. Therefore, the success of any materials control or management of materials highly depends on the system adopted for effective coding and classification of materials stored.
1.2 STATEMENT OF THE PROBLEM
Although materials coding and classification is considered a yardstick for easy identification, it is faced with some problems.
1. The nature of the coding system chosen her resulted to giving every different code numbers. This lead to the increase in the volume of the stores vocabulary.
2. The problem of inconsistency in classification of materials in the store section. For instance, there is a section of spinning materials which is normally under the spinning stores but recently, it has been transferred to the administrative stores.
3. There is also lack of a section that take adequate care of the organization stores vocabulary.
4. The organization is also faced with the problem of inappropriate classification of materials.
1.3 OBJECTIVES OF THE STUDY
The researcher work aims at finding out the procedures and method used in coding and classification of materials. The objectives include:
1. To identify the limitation to materials coding and classification with a view of proffering solution to them for the benefit of the organization.
2. To determine the need for the use of effective and efficient coding system.
3. To determine the effect of inconsistency in store, coding and classifications.
4. And lastly, to offer useful suggestions to management towards the application of the various method and techniques of coding and classification of materials.
1.4 RESEARCH QUESTION
1. Do you think that coding and classification of materials is important in manufacturing companies?
2. Has efficient coding and classification method used in PZ Plc Aba?
3. What are the problems of coding and classification in PZ Plc Aba?
4. What are the solutions to the problem?
1.5 SIGNIFICANCE OF THE STUDY
The research believes that the project will succeeds in throwing more light on the subject matter.
It will also go a long way in picking the conscience of all who have or assumed responsibilities of materials coding and classification of purchased material in manufacturing industry with particular reference to PZ industries Nigeria Plc Aba. This leads to limiting the traveling times in locating the materials stores, higher productivity and adequate professional recognition in industrial sector.
1.6 SCOPE OF THE STUDY
Materials coding and classification is a wide area of study. But this work will focus attention on the important of effective coding and classification of item as related to PZ Industries Plc, Aba only.
1.7 THE LIMITATION OF THE STUDY
The writers tends to cover the needs for materials coding and classification in a manufacturing company with particular reference to PZ Industries Plc. Aba, the paper would have one beyond these if not for:
1. Research biases: Most respondents although knowing the aim of this research refused to cooperate. The researcher has to waste some time persuading them to answer one question or the other.
2. Financial constraints: Due to the hard economic situation enough finance that should have allowed most diversified research wasn’t available.
3. Time constraint: The researcher combined his class work with research itself. This made the researcher to exercise a very high schedule as he had no transport himself. The problem becomes worse.
4. Transportation: Transportation problem posed a big treat to the project. The researcher wasted much time for vehicle and may succeed only to get his point of call very late. At time, interviews arranged may be missed and repeated journeys became mandatory.
4. Attitude of Nigeria Research: The tendency of people (respondents) not to regard questionnaire as important as well as nonchalant attitude of people to research in the country led to some questionnaire not returned. Some that were returned did not comply to instruction of the research questionnaire. This militates adversely on the progress of work, however, the researcher made up these short comings from use of interviews and observations in this organization.
5. Other factors that limited this study were there are scarcity of store management texts by Nigerian authorities in this country this made references in previous works very difficult.
1.8 DEFINITION OF TERMS
Stores management: It involved the day to day running of the store. In specific terms stores management is involved in carrying out of operating, designed to accomplish the aims and objectives of the department as determined by the administrative sector. To realize the set objective, store management involved planning, organizing, staffing, directing, controlling and coordinating.
Stores Coding: Is the identification of stock items by numerals, or letters or by a combination of both and in which the position and value or each digit usually provide particular information about the items identified.
Classification for coding purposes: Coding could simply involve allocation of number to each item as it arises, but this method makes the classification of items from their code more and more difficult as the number of items involved increases. This difficulty is reduced if we group like items together and devise our items are classified as well as identified the individual items means grouping items into two types or classes.
The complete sequence of operation therefore would be:
1. Identity: What the item, what is deals.
2. Specify: Its description, dimension, tolerance, etc.
3. Classify: To its correct group and subgroup.
4. Code: By allocating group and sub group and item designation.
Colour coding: This is s system whereby colours are used it identify items held in stock. This type of coding is mainly used in the lumber yards for making timbers and also in oil companies for making different types if pipe and chemicals stored in drums or tanks.
End used coding: This is a system where by items are arranged and stored according to the user department for all together for casting works are stored together in a designed location and issued only for casting works.
Suppliers code: This is a system where the supplier’s code are used. For one to be able to use this system, he must be well understood otherwise problems could be compounded.
Nature of the items: This system is widely used by the most companies, with this system items are classified and coded according to their basic nature. Before any coding system is adopted or introduced into the stores, some important 5 favours have to be considered and they include:
i. The type of stock items to be cooled
ii. The availability of staff and resources for the identification and updating of stores.
iii. The availability of staff and resources for the identification and updating of stores.
iii. The mode of operation-whether manual or computerized system of operation.
Importance Of Material Coding And Classification In Store Management In Manufacturing Industry:
Material coding and classification are essential aspects of store management in the manufacturing industry. They play a crucial role in ensuring efficient and effective operations, cost control, and overall competitiveness. Here are some of the key reasons why material coding and classification are important in store management in the manufacturing industry:
Inventory Management:
Material coding and classification help in maintaining accurate records of all materials and components in the inventory.
It enables the tracking of quantities, locations, and movement of materials, allowing for better control of stock levels and reducing the risk of stockouts or overstocking.
Quick Identification:
Material coding provides a standardized way to label and identify materials, making it easy for employees to find the right items quickly.
It reduces the time and effort required to locate specific materials, which increases operational efficiency.
Cost Control:
Proper classification allows for the categorization of materials based on various factors such as cost, usage, and criticality.
This enables manufacturers to allocate resources more efficiently, optimize procurement strategies, and reduce carrying costs.
Quality Control:
Classification can also be used to group materials by quality or specifications.
This ensures that the right materials are used in production processes, reducing the risk of defects and product recalls.
Vendor Management:
Material coding and classification facilitate better communication with suppliers.
It helps in specifying exact material requirements, quality standards, and packaging, leading to improved supplier relationships and quality assurance.
Production Planning:
Proper coding and classification provide valuable information for production planning and scheduling.
Manufacturers can ensure that materials are available when needed, reducing production delays and improving overall productivity.
Regulatory Compliance:
Certain industries, such as pharmaceuticals and aerospace, have strict regulations regarding material traceability.
Proper coding and classification help meet these regulatory requirements by providing clear records of material origins and usage.
Error Reduction:
Standardized coding systems reduce the likelihood of errors in ordering, receiving, and using materials.
This minimizes the risk of production disruptions and costly mistakes.
Data Analytics:
Material coding and classification create a structured data framework that can be leveraged for data analytics.
This data can be used to identify trends, optimize inventory levels, and make informed decisions to improve overall supply chain management.
Scalability:
As manufacturing companies grow, having a well-established coding and classification system in place allows for easier scalability and expansion into new product lines or markets.
In summary, material coding and classification are fundamental tools for efficient and effective store management in the manufacturing industry. They contribute to better inventory control, cost management, quality assurance, and overall operational excellence, making them crucial for the success and competitiveness of manufacturing businesses.