How to Make Item Numbers Work For Your Company

Item Number:  A number that serves to uniquely identify an item. Syn: part number, product number, stock code, stock number.    *APICS Dictionary, 12th Edition.

In an ERP system an item number must be assigned to anything that you want to plan, control or will be part of the end item. An item generally refers to any or all of the following:

  • Commodity
  • Piece part
  •  Intermediate
  • Fabrication
  • Sub-assembly
  •  Assembly
  • End item
  • Service part
  • Owner’s guide
  • Assembly instructions
  • Warranty, certifications or any required documents.
  • Labels and packaging materials


The term used here is ‘number’. If alpha and/or special characters are used in what we think of as an item number, it becomes more of a description. Many companies have developed exotic numbering schemes for their parts trying to capture as much information as possible to cover everything from design to accounting data. In manual or limited computer systems this may be necessary because there might not be sufficient field/table data areas available to define the characteristics and views of the item. Over time ?? numbers have become descriptions or significant /intelligent item numbers. For the most part in a manual mode this method seems to work fairly well. Everyone understands the scheme and generally works from printed forms with minimal access to any other item data. These methods are often taken for granted and we don’t pay much attention until some business event brings our attention to it.

There are limitations to any method of item numbering that produces significant item numbers. The development of a new product line, acquiring/merging two plants or product lines, general business growth, or implementation of a formal manufacturing system will always challenge the validity of using significant/intelligent item numbers.

The subject of a new item numbering system is always an emotional one.

  • Fear that the differentiation we now expect will be lost.
  • Perception that conversion will be disturbing to the organization and expensive.
  • Classic emotional resistance to change concerning a core piece of the business.


However, the implementation of a formal ERP manufacturing system offers the perfect opportunity to challenge the use of the any existing exotic, intelligent method of numbering and to consider simplification. Minimally you must cleanse your item file of obsolete items, determine and eliminate redundant items and make other decisions prior to conversion. So, you are into the real work effort anyway! The question on the table is, ‘Why not’?  

For this discussion design features and conversion strategies will be handled separately.

Design Features

1.    Discrete: You must give each different item a different item number. The converse is also true. If two items are the same you must give them the same number. A computerized system will ignore any difference it doesn’t understand and process these ambiguities incorrectly, yielding the wrong results. The rule of form, fit and function applies here. Standardization and interchangeability are operative conditions in this process. The ECO and Revision process must not violate these rules. If an item is changed by engineering so that it’s form fit or function remain the same and as changed the item is interchangeable with previous designs in all of the assemblies into which it goes, it is a revision and not a new item. Revision data does not change the item number but is separate data about the item. If on the other hand, the engineering change alters the item so that it can no longer be used with the same form, fit and function and is no longer interchangeable every place it has been used then it is a new item number.

2.    Complete: Every item used to produce your products must be given a part number. If it is to be consumed in manufacturing it must be on the Bill Of Material or expensed stock and that can only happen if it has an item number. All parts, no matter how trivial or inexpensive, must be managed somehow. Don’t try to use your vendors catalog numbers. You may buy from two suppliers with different catalog numbers or you change suppliers. It’s your item, number it. If you can’t ship your product without it, number it. Standard and actual cost calculations will be inaccurate if all items used to produce your products are not recognized.

3.     Universal: Non-production items should also be considered. MRO (maintenance, repair, and other) items that you need to stock and reorder can often be managed using reorder point and safety stock methods within an MRP II system. If you have separate Maintenance software then these items will be defined and managed there.


4.    Clerically efficient: The bigger and more complex the number, the greater the difficulty to key, along with a higher exposure to inaccuracy. Less is more and simplicity is elegance! Think about the ease of entry of just numbers as opposed to numbers and letters. Now think about having to shift to key characters. The visual ambiguity of O (oh), Z, I, and 1 (el), with o (zero) is a classic problem, and the problem is greater when English is a second language for employees. The best practice is all numeric with all numbers the same length. Avoid punctuation unless you use more than 7 digits. Bar coding using a numeric field is easier and printing labels with a shorter field is easier. A 5-digit item number has a potential for 99,999 unique values. A 6-digit item number has a potential for 999,999 unique combinations, and a 7-digit item number has potential for 9,999,999.


5.    Assigned Serially: The item numbers prime duty is to discretely identify the part. Contemporary ERP systems can usually assign the item number for you. You set the base or seed value and then as new items are added the system takes the base value, assigns it as the new item number and promotes the seed or base number. This method is extremely easy and makes maximum use of the numbers available, allowing you to adopt the shortest possible numbering scheme. Now, what about the intelligence you once put into the item field? Well, with a robust item master file, either consolidated to a single table or logically distributed to specific application processes, there are legitimate fields for all of the attributes you want to define for your items.
6.    Durable: Changing to a new item-numbering system is a major business decision that not only affects the core business processes but customers, vendors, sister plants, catalogs, documents, archived data, finance, engineering sub-systems and most of all comfort level with the status quo. The reality is that everyone and all of these entities will be affected by the new system anyway! One of the key goals of your project is to build a base system that supports growth. Can your existing item numbering methods support your expected growth and provide the efficiencies you expect from an advanced system? A good item-numbering system should be flexible enough to accommodate growth, product line changes, acquisitions, new software/hardware and measure up to this task for decades.


Conversion

    There are generally three approaches to changing your item numbering system.

Crash Program: Not crash and burn, but all items in one swoop, often with the implementation of a new ERP system. The normal file cleansing and elimination of obsolete and redundant must be performed

  • Determine what significant values are embedded in the current items.
  • Map these attributes to the appropriate elements, this is an enhancement to your current condition.
  • Serially assign new item numbers either through the new base number profile on the new system or as a separate step before upload.
  • Build a x-reference, old number to new number.
  • Store the old number as a reference on the new item and store the new item on the old item record in your legacy system
  • Apply the x-reference to all tables as converted. Bills of material, cost data, process/routing data, active, in process orders, etc.
  • Service parts need special consideration
  • Plan communications for your suppliers and customers telling them not only about your new system but your new methods.


This is a high level discussion on this approach, but it should give the concept of the strategy. Details to be developed during the conversion planning tasks of the project.
This approach has the downside and upside of changing all items at once.

  • It is clean, all items have new identifiers and everyone can adjust immediately to the new numbers.
  • It does add additional work effort and cost to the conversion process.
  • It creates a high degree of anxiety
  • It creates the fewest total number of items over time.


Gradual Phase-In: With this approach, you give a new style item number to each item as it is added to the system and gradually phase in changes to the old items as they are revised with engineering changes. Normal file cleansing along with elimination of obsolete and redundant items would still be performed as part of conversion.

Determination and mapping of significant data carried in the item number to the appropriate elements in the new system would still be performed.

  • Converted items would be the existing item numbers.
  • New items would be added using the new convention.
  • When existing items are revised through engineering changes, new contracts for purchased items, or some determined event occurs the item can be changed.
  • Changing an item number in mid-stream is typically not allowed and so it will probably require adding a new item and considering the old item obsolete.
  • A x-reference will need to be created with the Crash Program with the old item/new item storage.
  • Customers and suppliers would still need communication about your new convention and systems


This approach can be useful when companies have somewhat stable product lines, and lots of engineering changes. But it has problems.

  • It is not clean. You will be using both old convention and new convention item schemes and it can be confusing.
  • It does take the pressure off of the initial conversion and start up.
  • It requires ongoing communication with suppliers and customers whenever you convert to the new item scheme.
  • Adding the item as a new item doubles the number of items and tends to create large tables. Both old and new item definition are will be on file. The old item is considered obsolete.
  • At some point a total conversion is recommended.


Again, this is a high level discussion but I think you get the picture.

Attrition: With this strategy, you assign new style numbers only to new item as you add them. Converted old items remain in the system as they were converted until they disappear through obsolescence. The same initial conversion considerations apply as in the other approaches.

  • No x-reference is needed.
  • Old items are considered obsolete when replaced by new products.
  • New products are added using the new convention.

This approach can work for companies who have rapidly changing design with short life cycles for the end items.

  • Suppliers and customers still need communication as the replacements occur.
  • Still dealing with some old style numbers and new style numbers
  • Takes pressure off of the initial conversion and start up.
  • At some point a total conversion is recommended as with Gradual Phase-In.

You should choose the approach that provides the fastest conversion and makes the most economic sense.
 

The information in this paper is a compilation of Best Practices regarding item numbering. Some information is from Handbook of MRP II and JIT, written by John N. Petroff , published by Prentice-Hall 1993 and the APICS online dictionary.