Handling organizational materials efficiently is essential across all professional fields in Kenya. Whether in a county referral hospital managing medical supplies, a SACCO handling office stationery, or a hotel controlling food and beverage stocks, understanding how to classify and code materials ensures that resources are tracked, controlled, and utilized effectively. This chapter introduces fundamental concepts in verifying organizational materials, focusing on classification and coding systems that streamline operations and promote accountability.

1.1 Classification of materials

Classification of materials is the first step in bringing order to the thousands of items an organisation buys, stores and issues. Before items can be coded, located, counted or reordered, they are sorted into groups of items that share common features. Example: a manufacturer of plastic household goods groups its stores items into raw materials (plastic granules and colour pigments), packaging materials (cartons, labels, shrink film), spare parts for the moulding machines, tools, and general consumables such as lubricants and cleaning materials; each group is then stored, coded and controlled in its own way.

1.1.1 Meaning of classification

Classification is the process of arranging materials into groups, classes and sub-classes according to their common characteristics, such as their nature, use, physical form or value. Each item is placed in one group only, so that similar items are kept, recorded and managed together. Classification comes before coding: once groups are set, a code is given to each group and to each item within it (see 1.2).

Bases of classification

• Nature or stage of production: Raw materials, components and bought-out parts, work in progress, finished goods, packaging materials, and maintenance, repair and operating (MRO) supplies.
• Physical form: Solids, liquids and gases, each needing different containers, storage and handling.
• Use or function: Production materials, office stationery, cleaning materials, spare parts, tools and protective equipment.
• Value: ABC analysis groups items by annual consumption value, so that the few high-value items (A) get the closest control.
• Rate of use: FSN analysis groups items as fast-moving, slow-moving and non-moving.
• Criticality: VED analysis groups items as vital, essential or desirable to operations.
• Hazard: Flammable, corrosive, toxic, explosive and other dangerous goods are grouped separately from general goods.
• Durability: Consumables used up in a single use, and durable items such as tools and equipment that are used many times.

Principles of a good classification system

• Exclusive: Every item belongs to one group only, so it cannot be recorded in two places.
• All-embracing: There is a group for every item the organisation holds, including new items.
• Flexible: New groups and sub-groups can be added without changing the whole system.
• Simple: Group names are clear to every user, from storekeeper to buyer.
• Consistent: The same basis is used at each level of the system.

1.1.2 Benefits of classification

Classification brings benefits to the stores, the procurement office and the whole organisation, because it makes large numbers of items manageable. Example: once a hardware distributor classifies its stock, the buyer can see at a glance how much is spent on plumbing fittings compared with electrical goods.

Benefits to the organisation

• Easy identification: Similar items are grouped, so staff can identify and locate items quickly and issue the right item.
• Basis for coding: Classification gives the structure on which a coding system is built.
• Better stock control: Each group can have stock levels, review periods and verification methods suited to it, for example monthly counts for high-value items.
• Avoidance of duplication: The same item is not stocked under two names, which reduces excess stock and capital tied up.
• Variety reduction: Grouping shows where several similar items could be replaced by one standard item.
• Better storage: Items with similar storage needs, such as chemicals or fragile goods, are kept together under the right conditions.
• Procurement planning: Buyers can combine requirements for items in the same group into larger orders and negotiate better prices.
• Cost analysis: Spending can be analysed by group, which supports budgeting and cost control.
• Accurate records: Stores records, stock reports and the inventory system follow the same groups, which helps audit and reporting.

1.1.3 Advantages and disadvantages of classification

Classification has clear advantages, but it also has costs and limitations, especially in its setting up and maintenance. The procurement officer weighs both when designing or reviewing a classification system.

Advantages of classification

• Speed in receiving and issuing: Staff know where each group is kept, so goods are received, stored and issued faster.
• Improved accuracy: Fewer wrong items are issued or ordered because items are clearly grouped and described.
• Efficient use of space: Space is allocated to each group according to its volume and handling needs.
• Safety: Hazardous materials are identified and kept apart from general goods.
• Better communication: Users, storekeepers, buyers and suppliers refer to items in the same way.
• Easier computerisation: A clear classification is easily turned into categories in an inventory management system.

Disadvantages of classification

• Time and cost of setting up: Classifying a large store takes time and skilled staff, and the system must be documented.
• Training needed: Staff must learn the system and apply it consistently.
• Rigidity: A poorly designed system may not provide for new items, leading to forced or wrong placements.
• Items fitting more than one group: Some items, such as a solvent used both in production and for cleaning, may be placed in different groups by different staff unless rules are clear.
• Maintenance: The system must be reviewed as products, suppliers and uses change, or it becomes out of date.
• Over-classification: Too many fine sub-groups make the system complicated and slow to use.

Chapter Summary

This chapter focused on the verification of organization materials by first exploring the classification of materials, which involves grouping items based on shared characteristics to improve management efficiency. The benefits of classification include easier inventory control, streamlined procurement, and enhanced cost management, while its advantages and disadvantages highlight the balance between simplicity and potential rigidity in categorization. The discussion then moved to coding of materials, defining it as a systematic approach to assigning identifiers for easy tracking and retrieval. Various coding methods were examined, including numerical, alphabetical, alpha-numerical, decimal, mnemonics, and color-coding, each with distinct advantages and limitations depending on the organizational context. Finally, the chapter addressed material documentation, emphasizing its critical role in maintaining accurate records for accountability, auditing, and operational continuity. Together, these topics provide a comprehensive framework for managing organizational materials effectively.