The document discusses the necessity and methodology of codification and standardization in healthcare inventory management to address the complexity from a rising number of products and brands. It highlights the importance of assigning unique codes to items for proper identification, as well as the benefits of maintaining standardized processes for efficient procurement and storage. Additionally, it covers various coding systems and the advantages of standardization in manufacturing and consumer protection.

1. CODIFICATION &
STANDARDIZATION
Sonam Ongmu Tamang

2. IDENTIFICATION
• Health care institutions, hospitals, are facing a rapid increase in their inventory of
expendable and non-expendable items. This is due to the frequent introduction of new
products, multiple brands of the same product, and a preference for brand names over
generic ones.
• To manage this complexity, a scientific identification system that assigns a unique code to
each product is essential. Without such a system, locating specific items in a vast inventory
becomes challenging.
• Therefore identification of materials through the process of codification is very important
crucial for efficient store management.
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3. PHARMACEUTICAL CODIFICATION
• Various codification systems maybe employed to pharmaceutical products codification.
The main product maybe classified into long life and short life categories. These maybe
grouped into various sections.
• Items may also be categorized into consumable, non-consumables and special
equipment. It is essential that for use, procurement, accounting, storage, and maintenance
the size, weight, dimensions, functions, quality, quantity, is specified in some form. This
process leads to routinizing purchase efforts, reduced inventory levels, increased quantity
discounts and cost reduction.
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4. METHODOLOGY OF CODIFICATION
1. Codification is the process of representing each item by a number or alphabet, the digits
of which indicate the group, the sub group, the type and dimensions of the item.
2. The number of digits vary from 7 to 13 depending upon the number of items, use of
check digit, number of manufacturing sister organizations, inclusion of vendors.
3. As the number of digits increase the amount of information that can be built into codes
also increases, but the chances of committing error while recalling a code also increases.
4. Once the number of places has been agreed upon, the next step is to split them into
groups, each groups of digits signify groupings based on materials, type of products and
availability.
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5. METHODOLOGY OF CODIFICATION
5. The first two digits normally represent the major groups such as raw materials, spare parts,
packing material, tools, etc.
6. The next two indicate the sub group such as ferrous , non ferrous etc. and the dimensional
characteristics of length width, and diameter.
7. The last group is for minor variations such as type of steel, carbon content, special values etc.
8. The organizations using computers will have to introduce a check digit in last place. This is
done to check whether a code number has been correctly entered or not. This takes care of
mixing up of data of one material with that of another.
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6. REQUIREMENTS FOR CODES
The following requirements should be kept in view while deciding the code system:
• Allocation of material codes should be governed by logical simple and easy rules.
• The material code assigned to an item should be unique
• Similar group should be grouped together and it should be possible to retrieve a group of
items as a whole.
• The code should facilitate identification of inventory groups i.e. raw materials, packing
materials, laboratory chemicals etc.
• The retrieval of the code for an item should be simple
• The code should be flexible enough to accommodate new items introduced,
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7. CODING SYSTEM
• The code system should be simple, flexible and capable of incorporating new things. The
following system of code are commonly used:
• Alphabetical system
• Numerical
• Decimal
• Combined alphabetical and numerical system
• Bar coding.
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8. CODING SYSTEM
Two types of coding structure :
1. Kodak system:
• Developed in the USA by Eastman Kodak Company of New York, which consists of 10 digit of
numerical code.
• The logic of grouping is based on source of supply.
• All martials are divided into 100 basic classification
• Each group is divided into 10 further sub group. Eg:
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9. CODING SYSTEM
2. Brisch system:
• Developed in the UK, consists of 7 digit and is applied in 3 phases.
• The items are grouped together to form a major group. The grouping should be accurate,
uniform and shouldn’t overlap.
• The items are then further divided according to their nature, use, characteristics, class etc. so
as to describe the items in greater detail with less use of numbers.
• In the last part the numbers are allotted. Generally 7 digits are given to an item for symbolizing
the classified description of the items do that items may be clearly understood with the help of
codes allotted.
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10. CODING SYSTEM
3. Bar coding:
• A bar code is a series of parallel black and white lines of various thickness. This is universally
used in various departmental stores worldwide.
• Bar code ensures excellent inventory control since the stock status is always UpToDate.
• In the hospital combination of numeric and alphabetical notation is preferred. This system
make identification easier as symbols are more descriptive.
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11. ADVANTAGE OF CODIFICATION
• Easy recognition of items
• Avoiding confusions caused by long names or description of items.
• Systematic and logical grouping of similar items
• Elimination of duplicate items
• Reduction or minimization of number of items leading to accurate results
• Cutting down Leadtime
• Help in standardization an simplification
• Facilitate transfer of stocks among sister organizations’
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12. STANDARDIZATION
• According to the International Standards Organization, “Standardization is defined as the
process of formulating and applying rules for an orderly approach to a specific activity, for the
benefit and with the cooperation of all concerned and in particular for the promotion of the
overall economy, taking due account of functional performance conditions and safety
requirements.
• Its based on results of science , technology, research and development. Standards are
formulated to secure money, manpower and time.
 SPECIFICATION:
• The process of standardization leads to simplification and variety reduction. One of the forms a
standard takes place is Specification. It’s a concise statement of a set of requirements to be
satisfied by a product, a material, a process and indicates the procedure by which it maybe
determined whether the requirements given are satisfied

13. INDIAN STANDARDS
• Yardstick for estimating the extent of implementation of Indian standards, which is voluntary in
nature, is the propagation of ISI certification marks scheme.
• The scheme derives its authority from Indian Standards Institute certificate marks act, under
which ISI grants licenses to manufacturers to use standard mark on their products, provided
they conform to the relevant Indian standards.
• Standardization can be conceived on three-dimensional basis namely:
(a) subject standardization,
(b) aspect standardization and
(c) the levels of standardization.

14. INDIAN STANDARDS
• The subjects for standardization include all types of industries, commerce, trade, education,
agriculture, communication, transport, energy, agriculture, technology, etc.
• For each of the above subjects of standardization, there are large number of aspects that can be
standardized.
• These aspects include inspection, codification, simplification ,specification, research, test results,
machines, materials, spares, contracts, agreements, formats, sampling procedures, quality
control, performance appraisal etc.

15. INDIAN STANDARDS
• The third dimension i.e. levels of standardization is usually divided into the following 5
categories:
(a) The starting point is the individual level; the individual standardization depends upon the
conduct, behaviour, integrity, service, knowledge and skill of the executive responsible for the
decision. This individual standard may become the department standard and corporate
standard later on.
(b) The company standardization is done on the basis of its products, policies, procedures,
performance and market condition.
(c) The industry level standard is done for the industry as a whole, in respect of products, policies,
procedures. The industry standard leads to the next level namely national standard.

16. INDIAN STANDARDS
d) The national standards developed from above and also after discussion with Indian standards
institution usually fits with the national aspirations and regulations.
e) The international level standardization is adopted for international trade, commerce, air and
sea transport for the community as a whole.

17. ADVANTAGES OF STANDARDIZATION
• Manufacturers can streamline production process, introduces quality control systems and avail
an independent audit of quality control by ISI, reap production economics accursing from
standardization.
• Project a better image of their products in internal and overseas market, generate preference
for ISI marked products by organized purchaser of both private and government bodies and
get higher price for ISI marked goods.
• Consumers get the products certified by an independent national technical organization,
secure help in choosing standard products, they are protected from exploitation and deception
and replacements of ISI products that are of substandard quality.

18. ADVANTAGES OF STANDARDIZATION
• For organized purchaser ISI certificate is a convenient basis for conducting export contracts
and for the elimination of need of inspection of consignment by export inspection authorities.
• Oversee buyers are assured of the quality as per Indian standard and free replacement of
substandard goods.

19. PROBLEMS
• The availability of experts in developing countries is comparatively limited and those who are
academically knowledgeable are handicapped for lack of technical data on which they would
like to base the standard.
• Manufacturers can't produce every possible combination of price and performance for
products, so they offer a range of quality and price levels. Some products are cheaper with
lower quality, while others are more expensive with higher quality. Standard quality is usually a
middle ground, balancing performance and cost. Effective standards come from voluntary
contributions by experts and interested parties, including buyers, sellers, consumers,
government, and industries. The quality of these standards depends on open discussion and
cooperation among all members to find the best solution.

20. PROBLEMS AND CONSTRAINS
• Consumers and purchasing executives can influence the market by boycotting non-standard
products. Increasing public awareness of consumer rights through exposing bad practices and
educating buyers helps. In places like Gujarat, active consumer movements ensure that
manufacturers and traders automatically maintain acceptable standards for goods and
commodities.
• In custom tailor made industries, standardization is limited compared to mass production.
Developing economies rely on advanced nations for high-tech equipment, and
standardization starts with these developed countries, which may not follow international
standards. Despite challenges, standardization simplifies operations, reduces paperwork,
improves coordination, aids computerization, and highlights inefficiencies. Overall, it leads to
clearer communication, fewer errors, and smoother operations for materials executives.

21. THANK YOU