The location code is very valuable for preventing lost sales. Parts which are used infrequently may become lost as they are pushed to the back of a shelf. However, when the operator knows the location of the part, they can be quickly moved to prevent this needless expense.
Frequently, shop owners will search briefly for an item they believe is in stock, and then order a new one rather than waste more time searching. This creates a problem because funds are then tied up unnecessarily in unmoved stock.
Location codes may be developed quite simply. The first letter represents the general area of the shop, which may be a wall, shelf unit, storage shed, or office. These areas should be labeled clockwise on a floorplan. You may have shelving units, wall locations, storage bins, or even a special warehouse.
The second letter represents the position in the section (ie. L for left, M for middle, and R for right).
The final element of the code might be the shelf number. A part with allocation code of FM3 would be on shelf F, middle section, third row from the top.
The location codes should be established in a manner which is most logical for the actual shop layout. It is very important to implement these codes for effective shop management.