Article: How to Number Inventory

Efficient numbering is at the heart of a well-designed inventory system. Numbering each item lets your employees find what they need quickly and efficiently. A well-thought-out numbering system reduces the time it takes to make an inventory count. It also lets you track your inventory from when it first arrives at the warehouse until it gets to the sales floor. It may take you a while to set up your system and enter each item into your inventory accounting program. If you use a computerized accounting system, your inventory updates every time you enter an item number into the system.

Inventory List

Start by making a list of your inventory before creating your numbering system. Put similar inventory items together in the same group. You can group similar items based on their function, such as screws and bolts, or by item type, such as shirts and pants. Subdivide the inventory in each group according to the item’s size or color. For example, you can subdivide screws based on the size and clothing by the size and color.

Inventory Descriptions

Write a description for each inventory item. Use the name of the subgroup as the first word in the description instead of an adjective. For example, if your store sells dinnerware and you are inventorying the bowls, start your description with the word bowl. Add the type of bowl to the description, such as bowl, salad. Add the size of the bowl to the description, such as bowl, salad, medium. Now add the bowl’s color to the description, such as bowl, salad, medium, white. Follow this description method for your remaining inventory items.

Inventory Number Template

Decide how many characters you want to use for your inventory number. Most inventory numbers are a combination of letters and numbers and are between four and eight characters long. Avoid using the letters I and O, since they are easy to confuse with the numbers one and zero. Use letters at the beginning of your number to help identify the inventory part. For example, use BOW for bowl, PLA for plate and SAU for saucer. Avoid using symbols that might be confusing to your software program, such as commas, quotation marks, the ampersand and the greater than and lesser than symbols.

Inventory Numbering

Create your inventory numbers using your template. Start with one group and assign a number to each inventory item. For example, you can create number BOW101W to identify small white salad bowls, BOW101R to identify small red salad bowls and BOW101Y to identify small yellow salad bowls. If a group has more than 50 inventory items, consider dividing the group into several subgroups. Leave room in your numbering system so you can add new items to an inventory group. If you no longer carry an inventory item, retire the number instead of assigning it to a new inventory item to avoid confusion.

Source: smallbusiness.chron.com/number-inventory-75282.html

References

• Entrepreneur: Tracking Inventory
• Clearly Inventory: Inventory Basics - All About Inventory Management
• Seradex White Paper: Part Numbering