Effects Of Material Coding And Classification In Store Management In Manufacturing Industry

Project and Seminar Material for Purchasing and Supply PS

Effects Of Material Coding And Classification In Store Management In Manufacturing Industry


This study is concerned with the effect of material coding and classification in the store management, with a particular reference to pz industry Aba.

  • The introduction part gives a brief account of the meaning of coding and classification in the organization and how the organization come into existence and product they deal with. Also the general overview the problem objectives of the study, significance of the study, research question, limitation of the study, operational definition of terms.
  • The chapter two reviews of related literature and how important they are in the organization.
  • Chapter three is devoted in methodology and chapter four shows the discussion of findings associated with the research work.
  • The discussion on findings were made with the view in lighting a sound basis for some possible solution.
  • Chapter five witnessed the climax of the research rounded up by summarizing and concluding all the findings during the investigation. She finalized by giving some recommendation which is in the mind.

Chapter One

1.0 Introduction

Any organization both private and public need efficient management for its survival and success. Therefore, efficient management is very necessary especially as technology is changing in task and population inflation is bound . all these factors are increasing geometrically as against source resources . for an efficient management requirement, the coordination of all functional units of any organization towards the realization of its goals , hence purchasing and supply is inclusive. However for you to have an efficient purchasing when the buyer purchases the required quality and quantity of raw materials supplies part tooling equipments etc at the right time, from the right source to the right place and at the right price.

This can be achieved when the right person who have passed through some steps in obtaining the required the need for the recognition, the store manager recognized the need for the use of stores vocabulary or catalogues. Therefore, the success of any material control or management of interest is highly depended on the system adopted for effective coding and classification of materials.

With this background on the effects of material coding and classification in manufacturing industry, the store manager has arranged these materials on logical line for easy identification.

1.1 Background of Study

Peterson Zochoias Plc formally known as Peterson Zochoias industries limited, which was incorporated on the 4th December, 1965 under the name of P.B Nicholas Company limited to stake out the soap making activities of Mr. P.B Nicholas who had some years prior to the date established a factory for that purpose.

In 1951, Mr. P.B Nicholas sold out his interest in the company to PZ . two years later the company changed its name to Algbon industries limited in 1990. Following the merger of PZ and company nigeri limited associated industries limited in 1976,. The company changed its name to Peterson Zochoias Nig Plc.
It is patient to the role that after incorporation in 1948, new factory building were erected and in 1948 modern saop making equipment were installed are ABA . these by creating one of the earlier major industries manufacturing facilities.

In 1960 soap making introduction of wide range of perfuming cosmetics and medicinal product were added, the industry also have outlets in Ilupeju estate near, Lagos. Pz exist in refreshing their customers , partner with lives of their local customers, they produced and sell unique brands which bring pleasure to million of consumers around the worked everyday. The basis of their preposition in business is simple.

In carrying out this function of PZ industries, production of many interest is required. The pz company, having recognizing the need for proper and store manager and also established a purchasing unit charge with the responsibility of supplier selection, ordering , progressing, acquisition and producing these materials. The store manager including his personal was charge with the responsibility of storing inspecting and developing system for effective identification coding and classification of the materials in the store house of their organization as their first responsibility.

The stores manager of pz industries in his effort to meet up his first responsibilities of effective identification and coding of materials has grouped all the materials required, purchased and produced. The purchasing and most department are critical areas where the system must provide consistent and unamigous identification and coding materials.

The stores managers of pz Nigeria through his grouping of materials has arranged these materials on logical line for easy identification thereby avoiding errors in locating, ordering issuing etc of items of stock in the organization. The code appears in all document relating to the movement and the use of materials and use marked against appropriate line and racks, with these recognition, the store manager recognized the need for the use of store vocabulary or catalogues therefore, the success of any material control or management of interest highly depends on the system adopted for effective coding and classification of materials stored.

1.2 Statement of the Problem

The pz industries limited is faced with the following problems:

The problem of inconsistency in classification of materials in the stores section. For instance, there is a section of spinning it has been transferred to the administrative stores.

Secondly, lack of section that takes adequate care of the organization stores vocabulary.

Lastly, the pz industry is faced with the problem of selecting good organizational structure , effective coordination of duties and method of selection of staff.

1.3 Objectives of the Study

In order to carry out a complete investigation, the researcher tends to confront the following objectives or purposes:

  1. To examine the impact of inconsistent coding and classification.
  2. To enumerate the need for the use of effective and efficient coding system
  3. To identify the limitations to materials coding and classification.
  4. To offer useful suggestion to management towards the application of the various method and techniques of coding and classification of materials.
  5. To assess the organization on the use of coding materials

1.4 Research Question

In order to carry out a complete investigation on the subject matters the researcher has come out with the following questions. They are:

  1. What advantages are attributed to as efficient coding system
  2. What extent have coding simplified specification and standardization of materials in pz industries plc.
  3. What is the importance of stores vocabulary in the organization
  4. How methods of coding are being used in the organizations

1.5 Significance of the Study

The research believes that the project will succeeds in through more height on one 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.

The significance of the study drives one need of coding following ways.

  1. It will help the researcher to appreciate the need of coding and classification in private organization.
  2. To the company, it will highlight that a purchasing manager and other manager in different organization will benefit by knowing that some material that are stored in the store of warehouse will be easy to be identified or located because of the coding and classification system.
  3. It will provide employment opportunity for many people and also foster communication between the store managers and the worker.
  4. Finally students or anybody that does not have an idea of the use of coding system if come across this project so that he/she will have the knowledge of it.

1.6 Scope of the Study

Materials coding and classification is a wide area of study and scope of this study will be restricted to the purchase department of pz industries plc, in the respect , emphasis will be placed on examining the present system of the coding and classification and also identification of items.

A researcher will also cover a wider range of study on the assessment of the need of coding item on private form and other organization. The researcher finds it appropriate to study a very representation are well known firm and draw a generalization accordingly.

This study will also be interest in focusing attention on the existing problems relating to coding and classification of interest and also make communication on possible means of eliminating the problem.

1.7 The Limitation of the Study

The writers tends to cover the needs for materials coding and identification in a manufacturing industry with particular reference in pz industries plc. In carrying out this research project the researcher was conformed to various limitation

Financial constraints:

Due to the hard economic situation enough finance that should have allowed most diversified research wasn’t available.

Time constraint:

The researcher combines his class work with research itself. This made the researcher to exercise a very high schedule. As she had no transport herself. The problem becomes worse.


Transportation problem, posed a big treat to the project. The researcher wasted much time for xi and may secede only to get her point of call very late.

Other factors

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

Coding: coding is a system of writing in which letters or numbers or combination of both is used to reduce lengthy words into small space.

Stock catalogue:

It is a booklet containing the list and description of every item normally carried in inventory .


It is a detailed list example of house hold goods is furniture carried in stores.


Block or goods kept by a trader ir shopkeeper supply or equipment, stock or materials..


Not in vocabulary, these are items that are used included in he organization coding system
Store vocabulary: this is a book or file that contains code number of all the items held in stock and its full description.

Suppliers code:

This is where the stores employ the coding system of the suppliers of the goods.

Black coding:

This is the assignment of numbers of sequence by group of various sizes can consist of any quality of number necessary to cover the item in a particular classification.

Code symbol:

This is the symbol used either in alphabetical e.g UNESCO . numerical e.g 29/08/1981. Alphabetical e.g exc/p/084.

Colour coding:

This is s system whereby colours are used ti 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.

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.

Code formulation:

The mechanism of stores code depends on the needs of the particular firm under consideration as it is quite impossible to formulate a system that can be applied to every situation.

End used coding:

This is a system where by items are arranged and stored according to the user department

Stock records:

This is a system of maintaining a formal set of documents or clerical records which contain full particulars of individual stock item held within the stores.


Is an area in an organization were various kinds of materials needed for production , distribution, maintenance , packaging and general administration are received in, stored and issued out on demand.

Chapter Five

5.0 Summary, Conclusion and Recommendation

5.1 Introduction

The intension of this chapter is to draw conclusion and make summary of the finding and present recommendation or suggest remedies which is applied by the company appropriate would greatly improve the identification and location of materials as a result improve materials coding and classification.

5.2 Summary of Findings

In pz industry plc, it is the study of store management to maintain an efficient identification and location and classification of wide range of items held in stock. The normal way of the complex, this description are length and imprecise for use in identifying materials during daily operations.

Common names sever well enough in every work but cannot be used in the content of stores, management because it is very limited and not every descriptive items of highly technical nature would require a great deal of explanation in common languages.

To word off has to be developed so that one can identify, locate and clarify the wide range of items held in stock without the use of long descriptive identification system for store materials we may compare our design in that of the architect when designing office building the needs and characteristics of the occupant must be considered.
Similarly the store materials needs identification should be examined in assigning code number and store location otherwise, adverse undesirable and ambiguous identification, result with follow at the expense of simplified identification .

5.3 Conclusion

The pz industry plc is carrying out is activities required purchased and produced materials during the process. The bulk these materials is usually intended for use in connection with production or operating activities of the materials, the normal way of identifying an article is by sample description and I has been provided unsatisfactory. For different names may be used for the same thing example a product used when metal pipe are joined together may be referred to as a sealing, on “o” ring a gasket or joint . it is possible that the same article may be purchased under different description held in various stores through out the business.

Again, in order to identify article accurately a very long and complicated description is required. It is necessary to have some logical basis of identification of these materials which is more precise and less cumbersome. This can be done by using letters or numbers or a combination of both in the term of store code. The code is employed to identify all store items. clearly the choice of symbol required a great care its feature must be such that there is no danger of confusing one with another and more than should clearly indicate the class of materials to which the code relates.

Flexibility of a system of coding is essential this may be obtained by the use of hyphens or decimal point. If possible the symbol adopted should be for newly employed and also reducing shorter training time of error. It is therefore not difficult to conclude that the materials code is but one aspect of complete coding structure within a business and that success of any material management greatly depends on the system adopted for the effective identification of the materials stocked.

5.4 Recommendation

The researcher was able to probe deep into the problems confronting material coding and classification in Nigeria pz industries plc and the researcher has the following recommendation for their problems.

The problem of employing non professional and unqualified stores and purchasing personnel.

It should be interested that the effectiveness of the store and purchasing department can be determined by the ability and motivation of the people operating them. It is therefore important to have a good organizational structure effective co-ordination of duties and method of selection of staff.

Some people using only one method of coding that is coding the nature of items which makes the vocabulary voluminous. This problem could be solved by joining the method with other accepted one. The organization is also faced with the problem of inconsistency in classification of materials. This is needed to classify on item constantly in a particular store and not a situation whereby materials will be transferred from one section or store to the other.

There is also the need for training retraining and seminar workshops organized for store, purchased personnel on the new techniques in the management and identification methods of stores materials.

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