•The first step is to know the basic nature and characteristics of all materials used in an enterprise.
•Classify the materials in broad categories and then group and subgroup them in logical progression of kinds, types and sizes etc. The examples are:
(a)Raw materials
(b)Semi-processed materials
(c)Mechanical products and equipments
(d) Electrical products and equipments
(e) Chemicals, allied products, chemical processing equipments
(f) Laboratory chemicals and supplies
(g) Office equipments and supplies
•After classification as per the nature and use, a code or symbol is allocated to each of them.
•The code or symbol should be simple, flexible and adaptable to changing situations.
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