IntroductionAs companies began using more materials and consumers demanded new products, they needed a consistent way to identify every item unambiguously. That system has two parts: classification and coding.A classification system is of little use without a coding system to go with it. Classification groups materials by criteria such as shape, dimensions, weight, type and use; coding assigns each item a unique identifier. Together, they make it possible to build a catalog of every material a company uses, with standardized descriptions and specifications. That simplifies inventory control, storage and warehouse operations.Consider what happens without them: the same bolt is entered three times, as "10 mm hex bolt," "hex bolt M10" and "hexagon-head bolt," each with its own inventory record. The company buys stock it already has, runs out of stock it thinks it has and cannot calculate how much it spends on the item.Material classificationClassification establishes a process for identifying, coding, registering and cataloging materials. Before looking at those stages, it is worth noting that the same material can be classified in several ways, each useful for a different decision:by type and use: raw material, component, packaging material, maintenance supply, office supply or finished product;by consumption value: ABC classification;by criticality: XYZ classification (both are covered in the lesson on ABC and XYZ classification);by shelf life: items with expiration dates that must be issued in order of expiration;by hazard: flammable, corrosive and toxic materials, organized under the UN hazard classes used in regulations governing the transport of dangerous goods;by storage requirements: the weight, volume, temperature and storage method required.IdentificationThe first stage is identification: analyzing and recording the details that distinguish each item so it can be given a standardized description. The description always follows the same order:basic name: what the material is (bolt);modifier: a more specific designation (hex);physical characteristics: material, dimensions and finish;application: where it is used;packaging: how it is supplied (paint in a gallon can or a bucket, bolts in a box of 100);commercial reference: the manufacturer's code.For example: HEX BOLT; class 8.8 carbon steel; M10 × 1.5 metric thread; length 50 mm; zinc-plated; general use in structural assembly; box of 100 units; manufacturer ref. XYZ-1050. Using the same terms in the same order helps prevent the item from being registered twice.CodingOnce identified, each material receives a code: a string of numbers, or letters and numbers, that uniquely identifies it. The three most common systems are:Alphabetic: letters only, usually as a mnemonic (BOLT for a bolt, for example). Easy to remember, but the limited number of combinations has made it less common.Alphanumeric: a combination of letters and numbers. Widely used in the auto parts industry.Numeric: numbers only, arranged in a logical hierarchy. This is the most widely used system because the codes are easy to sort, machine-read and expand.Hierarchical numeric coding has its roots in library decimal classification systems: the Dewey Decimal Classification, created by American librarian Melvil Dewey in 1876, and the Universal Decimal Classification (UDC), developed from it by the Belgians Paul Otlet and Henri La Fontaine. The principle is the same: each group of digits marks a more specific level. A code such as 05.12.0345 could indicate group 05 (hardware), class 12 (bolts) and item 0345 (that particular M10 hex bolt).From FSN to NSNThe United States government took this approach further to catalog millions of military items. Starting in 1953, it used the 11-digit Federal Stock Number (FSN): the first 4 digits gave the Federal Supply Classification (FSC) class, and the next 7 identified the item. In 1974, the FSN was replaced by the NSN (National Stock Number, known in NATO countries as the NATO Stock Number), which has 13 digits:NSN structure: supply class, cataloging country and item number4 class digits (FSC): the first two identify the group, while all four identify the class. For example, group 53 covers hardware, and class 5305 covers bolts.2 country digits identify the country that cataloged the item (the national cataloging bureau code): 00 and 01 for the United States, 19 for Brazil.7 item digits form a sequential number with no meaning of its own.The last 9 digits (country + item) form the NIIN, which identifies the item on its own; the class at the front groups it with similar items. One example of the format is 8415-00-082-5645 (class 8415, cataloged by the United States). Converting an old FSN to an NSN was straightforward: insert "00" after the first four digits.The NATO Codification System has been used by the United States since the postwar period and was subsequently adopted by other NATO countries and several partners, including Brazil. Brazil followed suit because the main manufacturers of equipment used by the Brazilian Armed Forces had adopted it. According to Brazil's Ministry of Defense, the timeline is:1968: the Armed Forces General Staff establishes the Permanent Material Cataloging Commission (CPCM);1982: the Military Cataloging System (SISMICAT) is created;1986: the Brazilian Stock Number (NEB) is created, with a structure similar to the NSN;1998: the system is reorganized to make it easier for the Navy, Army and Air Force to exchange data, and the Armed Forces Cataloging Center (CECAFA) is created;2017: SISMICAT is renamed the Defense Cataloging System (SISCADE), and the center, after being called the Defense Cataloging Center, becomes the Defense Logistics Systems Support Center (CASLODE).The federal government's catalog: CATMATThe same approach applies to civilian public procurement. Brazil's federal government maintains CATMAT, a materials catalog, and CATSER, a services catalog, for use on Compras.gov.br. Every item purchased by the federal administration needs a code in these catalogs. CATMAT has four levels:Group: 2 digits (for example, 65 for medical, dental and veterinary equipment and supplies);Class: 4 digits, the first two of which identify the group (6505 for medicines; 6515 for medical and surgical instruments and supplies);PDM (Material Description Standard): a standardized name and list of characteristics describing a set of items, following the same basic-name, modifier and characteristics approach described earlier;Item: each combination of characteristic values becomes an item with its own code.The group and class numbers match those in the American FSC: 65, 6505 and 6515 mean the same thing in both systems.An NSN is written as 5305-19-XXX-XXXX. What do the digits 19 indicate?Answer: That the item was cataloged by Brazil — in an NSN, the two digits after the four-digit class identify the country that cataloged the item, and 19 is Brazil's code. The group is indicated by the first two digits (53, hardware), and the item number is the last seven digits.Registration and catalogingAfter coding, the material is registered in the system with all its characteristics (today, in the ERP's materials register). The register supports three basic operations: adding a new item, updating an item when a characteristic changes and removing (or deactivating) an item when it is no longer used.The final stage is cataloging: bringing all the information together in a materials database that:lets users look up the materials they need and check their characteristics;makes it easier to request quotes and issue tenders because the specifications are already in place;prevents duplicate items in the catalog;allows registration details to be checked against material documents.The catalog works only if someone is responsible for maintaining it. If anyone can add items freely, duplicates will return within months.While reviewing the register, a warehouse clerk finds 'WHITE 9W LED BULB' and '9 W 6500K E27 LED BULB' under different codes with separate stock records, then discovers they are the same product. Which stage of the process failed?Answer: Identification, which should have given the item a standardized description — with the basic name, modifier and characteristics always in the same order, the second entry would have been flagged as a duplicate. The different code is a consequence, not the cause: each different description received its own code.BarcodesCoding became far more useful with automatic data capture technologies, which eliminated the need to type codes manually. Typing long numbers all day is slow and error-prone; scanning a code takes a fraction of a second.Two technologies were explored for this purpose:Magnetic codes: information is stored on a strip of magnetizable material, like the strips on old subway tickets and bank cards. This requires contact with the reader and a more expensive, specialized material. Contrary to what was once believed, the strips are easy to copy: magnetic-stripe cloning was precisely what led banks to adopt chip cards.Barcodes: information is printed as bars and spaces of varying widths, using ordinary ink on any package. Barcodes are cheap, which is why they prevailed.Norman Woodland and Bernard Silver received a US patent for the barcode in 1952, but the technology took off only with laser scanners: the first scan at a supermarket checkout, of a pack of gum bearing a UPC code, took place in 1974. Today, barcodes appear on industrial and consumer packaging and are used in freight handling, warehouse control and stores everywhere.EAN-13 and GTINThe most common retail barcode in Brazil is EAN-13, which carries a GTIN-13 (Global Trade Item Number). GTINs are administered worldwide by GS1 and in Brazil by GS1 Brasil. The code has 13 digits:EAN-13 code with a Brazilian prefix and check digit (fictitious number)GS1 prefix: 789 and 790 are GS1 Brasil prefixes. They show where the company registered, not where the product was made; a Brazilian importer can use 789 on a product made in China;company and product codes: GS1 assigns the company code, and the company numbers its own products;check digit: the final digit, calculated from the other twelve. It allows the scanner (or system) to reject a code that was scanned or entered incorrectly.The GTIN also appears on electronic invoices, linking the item on the shelf to the item on the tax document.How to calculate the check digitAdd the digits in the odd-numbered positions (1st, 3rd, 5th...) of the first twelve digits.Add the digits in the even-numbered positions and multiply the result by 3.Add the two results.The check digit is the amount needed to reach the next multiple of 10 (or 0 if the sum is already a multiple of 10).For example, with 789123456789:odd-numbered positions: 7 + 9 + 2 + 4 + 6 + 8 = 36;even-numbered positions: (8 + 1 + 3 + 5 + 7 + 9) × 3 = 33 × 3 = 99;sum: 36 + 99 = 135;next multiple of 10: 140, so the check digit is 140 − 135 = 5. The complete code is 7891234567895.What is the check digit for the EAN-13 code beginning with 789100031550?Answer: 7 — odd-numbered positions: 7 + 9 + 0 + 0 + 1 + 5 = 22; even-numbered positions: (8 + 1 + 0 + 3 + 5 + 0) × 3 = 51; sum 73; the next multiple of 10 is 80, so 80 − 73 = 7. The answer 3 is the last digit of the sum, not the amount needed to reach 80.Other codesGS1-128: a long linear barcode used on boxes and pallets. Along with the product identifier, it carries batch numbers, expiration dates, weight and other logistics information.DataMatrix: a small two-dimensional code widely used on medicines and industrial parts.QR Code: a two-dimensional code that any smartphone can scan and that holds far more information than an EAN barcode.Retailers worldwide are moving toward two-dimensional codes. Under GS1's Sunrise 2027 initiative, checkout systems are expected to be ready by the end of 2027 to scan 2D codes containing a GTIN, such as a QR Code using the GS1 Digital Link standard, which can direct consumers to product information. EAN-13 will not disappear overnight: the two formats are expected to coexist for a long time.Radio-frequency identification (RFID)Technology did not stop at the barcode. With radio-frequency identification (RFID), information is stored on a chip connected to a small antenna. This label, or tag, is read using radio waves, without contact or a direct line of sight.The idea is not new. Its roots lie in World War II systems for identifying friendly and enemy aircraft, and the first patents for RFID tags date from the 1970s. What made it useful in logistics was the work of the Auto-ID Center, founded in 1999 at the Massachusetts Institute of Technology (MIT). It proposed the EPC (Electronic Product Code), a unique number stored on the tag of each individual product. The standard is now maintained by GS1, the organization behind barcodes.How it worksAn RFID system has three parts: the tag, the reader (and its antenna) and the software that receives the data. Tags can be:passive: they have no battery and use energy from the reader's radio waves to respond. They are inexpensive and are the most common type in logistics and retail;active: they have their own battery, can be read from dozens of meters away and cost more. They are used to track containers, vehicles and expensive assets.Tags vary widely in size, data capacity, lifespan and durability. Some are sealed for harsh chemical environments, some are sewn into clothing, and others are attached to livestock. The NFC technology in phones, used for contactless payments, is a very short-range form of RFID. Automatic toll-payment tags in cars also use RFID.Barcode or RFID?BarcodeRFIDScanningone at a time; requires a direct line of sightmany at once; no direct line of sight neededIdentifiesusually the product type (identical products share a GTIN)can identify each individual item (EPC)Cost per labelvirtually zero (printing)cents for passive tags; much more for active tagsDatafixed and printedcan be rewritten on tags that support itLimitationsdirt, tears and scanning anglemetal and liquids interfere with scanning; reader costsRFID's main advantage is tracking each individual item through the supply chain and scanning many items at once. A reader at a loading dock can register an entire pallet of boxes without anyone opening them, while an inventory count that would take a day with a barcode scanner can take minutes. That is why RFID first gained ground with higher-value goods and in supply chains where counting by hand is costly, such as clothing stores and distribution centers.A current example in Brazil is livestock. The National Plan for the Individual Identification of Cattle and Buffalo (PNIB), whose timetable was set by SDA/MAPA Ordinance No. 1.331 in July 2025, calls for the gradual identification of every animal in the herd by the end of 2032. From January 1, 2033, cattle and buffalo that have not been identified and registered in the official system cannot be moved. RFID ear tags are among the technologies used because they allow an animal to be scanned without restraining it.A clothing distribution center wants to count 200,000 garments in a few hours without opening the boxes and know exactly which item shipped with each order. Which technology is the best fit?Answer: Passive RFID tags with EPC, scanned in bulk. RFID reads many tags at once without a direct line of sight, and the EPC identifies each individual item, not just the product type. EAN-13 is cheaper, but every item must be scanned separately, and identical shirts all have the same code. ABC classification helps determine what to count more frequently, but it is not a scanning technology.ExercisesEasy1) What is the difference between classifying, identifying, coding, registering and cataloging a material?2) Write a standardized description (basic name, modifier, characteristics, use, packaging and reference) for three items you have at home.3) Explain the structure of an NSN and what the code 19 means within it.4) Pick three products from your cupboard, check the barcode check digit on each one and determine whether the prefix indicates where the product was made.5) Name two advantages and two limitations of RFID compared with barcodes.6) Calculate the check digit for the EAN-13 whose first twelve digits are 789456123001.Hard7) A product's correct code is 7891000315507. At checkout, three operators entered it incorrectly:a) 7891000315504;b) 7891000351507;c) 7891000315057.For each code entered, calculate the check digit required by its first twelve digits and say whether the system would reject it. Did any error go undetected? Explain why.8) A military item has the NSN 5305-19-123-4567 (an illustrative number).a) What are its group, class, cataloging country and NIIN?b) An old manual lists the FSN 5305-123-4567 for an item cataloged by the United States. What is its NSN?c) In CATMAT, which group does a class 6505 item belong to, and what does that group include?9) A company plans to create a hierarchical numeric code (group, class, item) for its materials. It currently has 8 groups, no more than 60 classes in any one group and no more than 3,500 items in any one class. It wants each level to have a fixed number of digits.a) What is the minimum number of digits needed at each level, and how many are needed in total?b) How many items can the code accommodate in total?c) How does that compare with a 3-letter mnemonic code: how many combinations does it allow?d) How much room would you leave for additional groups, given that the company plans to grow?10) A company's inventory system contains three descriptions, each with its own code and stock count: 'TINTA ACRIL. BRANCA 18L', 'TINTA ACRÍLICA FOSCA BRANCO NEVE GALÃO 18 LITROS SUVINIL' and 'LÁTEX BRANCO 18 L P/ PAREDE'. They turn out to be the same product, manufacturer reference 50123, used to paint interior walls.a) Write a single standardized description in the order taught in the lesson.b) What three practical problems does the triplicate listing cause?c) What catalog-management rule would prevent the problem from recurring?11) A clothing store conducts 12 full inventory counts a year of 200.000 garments. With a barcode scanner, each garment takes 2 seconds to scan. With RFID, a reader scans a box of 50 garments in 3 seconds. Labor costs R$ 30 per hour, and each passive RFID tag costs R$ 0,15. Inventory turns over 4 times a year, and every incoming garment needs a new tag.a) How many labor hours does each technology require per inventory count?b) What is the annual labor cost of inventory counts in each case?c) How many RFID tags does the store use each year, and how much do they cost?d) Do savings on inventory counts alone pay for RFID? What other benefits might justify the switch?Answer key1) Classifying means grouping materials by criteria such as type, value, criticality and hazard. Identifying means recording the details that distinguish an item in a standardized description. Coding means assigning an item a unique symbol. Registering means adding an item and all its characteristics to the system, or updating or removing its record. Cataloging means bringing everything together in a materials database that everyone can search.2) Answers will vary. Example: LAUNDRY DETERGENT POWDER; for clothing; for use in washing machines; 1,6 kg box; manufacturer's reference. What matters is the order: basic name, modifier, characteristics, use, packaging and reference.3) It has 13 digits: 4 for the supply class (the first 2 identify the group), 2 for the country that cataloged the item and 7 for the item number. The last 9 digits make up the NIIN. The code 19 identifies Brazil: it means the item was cataloged by Brazil.4) Answers will vary. Use the calculation from the lesson (odd-position digits + 3 × even-position digits, then find the amount needed to reach the next multiple of 10). As for the prefix, 789 and 790 indicate that the company registered with GS1 Brazil, not that the product was made in Brazil.5) Advantages: RFID can read many tags at once without a direct line of sight; it can identify individual items (EPC); and data on some tags can be rewritten. Limitations: tags and readers cost more, and metal and liquids interfere with scanning.6) Odd positions: 7 + 9 + 5 + 1 + 3 + 0 = 25. Even positions: (8 + 4 + 6 + 2 + 0 + 1) × 3 = 21 × 3 = 63. Total: 25 + 63 = 88. Next multiple of 10: 90. Check digit: 90 − 88 = 2. Complete code: 7894561230012.7) a) The first twelve digits match the correct code and require a check digit of 7 (odd positions: 7 + 9 + 0 + 0 + 1 + 5 = 22; even positions: (8 + 1 + 0 + 3 + 5 + 0) × 3 = 51; total: 73; 80 − 73 = 7). The entered digit was 4, so the code would be rejected.b) 789100035150: odd positions: 7 + 9 + 0 + 0 + 5 + 5 = 26; even positions: (8 + 1 + 0 + 3 + 1 + 0) × 3 = 39; total: 65; required check digit: 5. The entered digit was 7, so the code would be rejected. The 1 and 5 were swapped.c) 789100031505: odd positions: 7 + 9 + 0 + 0 + 1 + 0 = 17; even positions: (8 + 1 + 0 + 3 + 5 + 5) × 3 = 66; total: 83; required check digit: 7. The entered digit was 7, so the incorrect code would be accepted (the 5 and 0 were swapped). When adjacent digits a and b are swapped, one changes from a weight of 1 to 3 and the other from 3 to 1. The total changes by 2 × (a − b). If a − b = 5, the change is 10, a multiple of 10, so the check digit cannot detect it. EAN catches every single-digit error and nearly all swaps of adjacent digits, except swaps between digits that differ by 5.8) a) Group 53 (hardware), class 5305 (screws), country 19 (Brazil), NIIN 19-123-4567 (the last 9 digits).b) Insert 00 after the class: 5305-00-123-4567.c) Group 65 (the first two digits of the class), which covers medical, dental and veterinary equipment and supplies; 6505 covers medicines.9) a) Group: 8 fits in 1 digit (up to 10). Class: 60 requires 2 digits (up to 100). Item: 3,500 requires 4 digits (up to 10,000). Total: 1 + 2 + 4 = 7 digits.b) 10 × 100 × 10.000 = 10.000.000 combinations.c) 26 × 26 × 26 = 17.576 combinations, far fewer, which is why alphabetic codes fell out of use.d) With 8 of the 10 possible groups in use, only 2 remain. Using 2 digits for the group (up to 100 groups) makes the code 8 digits long but avoids having to recode everything as the company grows.10) a) ACRYLIC PAINT; matte; snow white; for painting interior walls; 18-liter can; manufacturer ref. 50123 (basic name, modifier, characteristics, use, packaging and reference).b) The company buys stock it already has because the quantity is split across three codes; it runs out under one code even though stock remains under the others; and it cannot accurately total how much of the item it uses or spends on it, distorting ABC classification and demand forecasts.c) Assign a catalog manager: no one adds an item without their review, which checks whether a standardized description already exists.11) a) Barcode: 200.000 × 2 = 400.000 seconds ÷ 3.600 = 111,1 hours. RFID: 200.000 ÷ 50 = 4.000 boxes × 3 = 12.000 seconds ÷ 3.600 = 3,33 hours.b) Barcode: 111,1 × 12 × 30 = R$ 40.000 per year. RFID: 3,33 × 12 × 30 = R$ 1.200 per year. Savings: R$ 38.800.c) 200.000 × 4 = 800.000 items arrive each year, each requiring a tag: 800.000 × 0,15 = R$ 120.000 per year.d) No. The R$ 38.800 in savings does not cover the R$ 120.000 cost of the tags, even before accounting for the readers. RFID could be justified by other benefits: fewer stockouts because accurate inventory records let the store sell what it has; checking incoming and outgoing shipments without opening boxes; tracking individual items; and less theft. Cheaper tags could also make it worthwhile.
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