Production Management: Parts Classification and Group Technology – Page 1

The classification of parts is an important activity in the management of production. It facilitates the efficient management of inventory and provides an easy and cost-effective means of retrieving machine parts. There are various classification systems currently in place that can be used to classify inventory, materials and parts. They include the ABC classification system as well as coding systems. Under coding, parts are usually classified into families based on similarities either in the physical parts or in their manufacturing requirements/processes. Based on the parts families, group technology as a production philosophy has emerged. It has in turn led to the development of cell manufacturing, where machines are grouped based on the identified parts families. In the following sections, the various parts classification systems are discussed. Moreover, group technology, its nature, advantages as well as associated problems are also discussed.

Parts Classification Systems

Various methods exist which can be used for the purpose of classifying parts. The need for classification is underpinned by the presence of multiple items within the inventories of industries. The most appropriate management technique for such systems that contain multiple diverse parts is management by exception (Chary, 2004, pp. 22-2). Within such a technique, classes are used to categorize parts. This allows for selective management which facilitates effective utilization of management time. Moreover, this system avoids the confusion that is normally inherent in systems characterized by excessive controls.

Within the selective management system, materials are usually categorized into three classes. This is usually referred to as ABC classification, where A, B, and C represent different classes. There are several considerations that can be used to classify materials and parts under the ABC system, but usually, the annual consumption value of products is the conventional measure under the ABC system. Applying this factor as a discriminator, it is the case in many industries that a small number of items account for the greatest proportion of annual turnover. These are referred to as class ‘A’ items and according to Chary, (2004, pp. 22-1) it is such items that should attract managerial attention. Moreover, the converse case is also the norm for many industries, whereby, a very big number of items usually account for the smallest annual turnover margins. Such items are referred to as class ‘C’items, and they should only be a last consideration after the other two classes. Class ‘B’ items are those which fall between class A and C.

Another classification system is the VED classification, which categorises materials based on their criticality to the produiction process. Chary elaborates that there are materials whose importance is underpinned by their absence (2004, pp. 22-4). The absence of such materials can result to huge losses in terms of machine down time and lost production. Under the VED classification, materials and parts are classified as either vital (V), desirable (D) or essential (E). Vital items are those that are of critical importance to the production process whereas desirable items are those that are not critical (Telsang, 2007, p. 157). Moreover, there are essential parts which like the ‘C’ class of materials in the ABC system, fall somewhere between. The effect on inventory is that vital elements must be held in larger numbers in inventory whereas desirable items do not require such critical attention since they can easily be obtained from the market.

The above systems can be combined resulting in a matrix classification. Under this classification matrix (Chary, 2004, pp. 22-5). The service level of the resultant matrix items varies based on the application of criticality to annual consumption value. In particular, for a matrix combination of a desirable production component applied to a fast-moving item ‘A’, the service levels are lower since each of these items is found in reduced numbers in the inventory. However, for a matrix combination of a vital production component applied to a slow-moving item ‘C’, the sevice levels are highest since each of these items is found in elevated numbers within the inventory.

There are a number of other classification systems which operate in a manner similar to that of the ABC system. The classification criteria is usually based on other factors other than the money value and criticality of items. This is where there are other aspects of the product or the material or part that are of prime consideration. An example is a classification based on the perishability or obsolescence of materials or parts. This is applicable for example in chemical or drug systems, whereby these products possess a low shelf-life (Murthy, 2005, p. 288). Thus, three categories arise: high shelf-life, medium shelf-life and low-shelf-life. Chary refers to this as a PQR classification(2004, pp. 22-5). Some of the othere classification include HML (high, medium, low) based on the usage of materials, SDE (scarce, difficulty, easy) which reflects the problems faced in the procurment process and XYZ which categorises items based on the value of stock (Kachru, 2009, p. 412). These classification systems provide management with a variety of methods to employ in the determination of what inventory items/parts to prioritize.

Apart form the above three-prong approaches to classification, there are other methods that can be used to classify parts and materials. One such method is the coding method. This is the most complicated and time-consuming methods of classification. However, it is also the most accurate and most powerful model. It involves the generation of a code to represent a particular part with specifications of the parts design and manufacturing attributes (Tolouei-Rad, 2010, p. 199). Some of the attributes that are usually defined are such as the size, shape, and machining operations (Kachru, 2009, p. 787).

Codification of parts is a particularly advantageous method of classification. However, in order to harness these benefits, Arora proposes a few factors that need to be observed (2004, p. 717). First off, a uniform base of classification/codification should be applied consistently to all items. Moreover, this basis should cover all present items and should be flexible enough to absorb future items. Thirdly, there should be a unique fit of combination between a part and its code such that there is each code refers to only one item while each item only has one code. Finally, the code used should be self explanatory such that the concerned personnel within the organizations are able to understand it. According to Chary (2004, p. 24.4), the codification system should be brief such that it contains only a smalll string of digits.

Once implemented along these guidelines, the organization can then enjoy a number of benefits. These benefits include the simple description of an item by just a code, correct identification of any and every possible item as well as uniformity in the maintenance of records across the organization. Moreover, the use of codes eliminates duplication during storage and purchase. Finally, a codification classification approach can be used to develop locational plans for materials storage.

Classification and coding schemes usually employ three types of structures. These are hierarchial structure (mono-code), chaintype structure (poly-code) and mix-mode structure, a hybrid of the above two structures (NCHU, n.d). In the hierarchial structure, a symbol is interprated based on the value of the preceding symbols. In a polycode system, the interpretation of a symbol does not depend on the value of its predecessors and as such, the value remains constant. With the mixed system, both of the above concepts are applied.

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