A good system of classification helps the manager in the following way:
1. To raise separate purchase requisition for different types of materials.
2. To group together stock control cards for materials of identical nature, e.g., all electrical items together, all oils together, and so on.
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3. To send out separate enquiries for different types of materials such as steel, electrical items, hard ware etc. by virtue of their receiving separate purchase requisition for separate groups.
4. To divide the work in the purchase section, each group handling certain classes or categories of materials.
5. To raise separate purchase orders for different groups of materials by virtue of separate purchase requisitions.
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6. To rise separate GINs (Goods Inward Notes) for different classes of goods on account of their being separate orders for them.
7. To route the materials to the appropriate stores.
8. To post the receipts and issues on the correct bin cards by following the class and code number given on the G.I.N and requisitions.
9. To keep different types of goods separately as there are separate classes for different types of goods.
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10. To group catalogues, price lists etc. separately according to classification.
11. To compile budgetary figures under various sub-headings by the classification numbers.
12. To debit receipts and issues under correct account headings by linking up classifications with account headings.
13. To work out the value of different inventories, i.e., capital equipment, tools, general stores and production materials.
14. To post the G.I.Ns., requisitions, etc. on the correct cards.