Sometimes the engineer part of me comes out. While you’d think it would show up when a machine in my house is broken or when touring a manufacturing facility, it really shows up the strongest when talking about part numbers. (Yes, part numbers.) Did I mention I’m also a bit of a geek? When I was a brand-new design engineer, someone handed me a printout from an Excel file with a thousand part numbers on it . . . and no guidance. No information on when to use a new one or reuse an old part number, or when a part needed a number at all. Now I know you’re asking: “What do part numbers have to do with procurement? Engineering/sales/technical teams assign part numbers at our business.” My answer is: everything. Part numbers are procurement’s fast-track ticket to better data, clearer scopes, cleaner technical evaluations, and fewer quality problems. If nothing else, it also helps procurement professionals “speak the language” of our technical counterparts better, which always builds relationships. Let’s talk about part numbers today from a procurement perspective: when to push for a new part number, the benefits of part numbers, and some thoughts on part number taxonomy.
New part numbers: Form, Fit, Function
It’s embarrassing how far I was into my career when someone taught me the Form, Fit, Function rule for part numbers. Basically, if two parts differ in form, fit, or function from one another, they need two separate part numbers. This rule applies whether you are assigning a part number to a physical object OR a service like an hourly rate. (More on why you should assign part numbers to hourly rates and other services can be found in my article here.)
Form – The form of a part is what it looks like, feels like, and what it generally is. This might be its color, material, or finish. For a service, it might be the units (Hourly? Monthly? Per project?) or even a general description of its function. Examples of form: A blue gel pen, the hourly rate for a level one design engineer, or a 12 horsepower engine.
Fit – The fit of a part is how it matches up to or works with the other parts around it. This might be its connectors, material (such as for friction resistance or ability to be welded), or profile. For a service, this might be expertise/experience or available equipment to complete a job. I say experience is an example of fit because in a team of service professionals, the team composition is all about having the right mix of experience and expertise to create a high-performing team that works together. Examples of fit: The refill cartridge for a pen, an engineer with five years’ experience, or an engine with a 1 x 3 15/32 inch shaft.
Function – The function of a part is what it does. This might be how it moves or the result it creates. For a service, it might be a specialty or the result of a finished project. Examples of function: a pen that creates a smooth blue line 0.5mm wide, an engineer certified to design bridges, or an engine that runs at 3600 rpm.
It all comes down to one thing: if Part A cannot substitute for Part B and vice versa, then they need two different part numbers. When I was working for an equipment manufacturing company, this used to trip me up all the time when working with electrical harnesses. It is very typical to simply give a revision letter to an electrical harness when making a small change (i.e. part 299956713 rev. A), but this causes confusion. If a customer orders a replacement electrical harness later and receives revision B instead of revision A, there’s a good chance the revised harness won’t fit their machine. So if a harness is simply getting a little extra length to make it easier to install or is getting a different color covering to make it easier to see in the machine, it can keep the same part number. But if the connectors change or it has another major revision, it needs a new part number. As a procurement professional a little later at that same company, it was my responsibility to get a new quote for the revised wire harness. If I had understood the form, fit, function rule, I would have pushed the engineer to give me a new part number when quoting a major revision to an existing part.
Part Number Benefits
As a procurement professional, comparing form, fit and function is how we get to a fair, apples-to-apples comparison between suppliers. If a technical team or supplier can articulate a difference in their offering in form, fit, or function, it is procurement’s job to help determine the impact of that difference and how it affects a bid. Major differences in function might affect the go/no-go criteria for evaluation. Differences that cannot be reconciled might lead to using a bid transformation, either in an e-auction or even just to fairly evaluate suppliers. Debatably, goods or services that cannot be represented by the same part number shouldn’t be bid as if they are the same.
My favorite benefit of part numbers for anything procurement buys is simply data. Part numbers are the magical index that can help track what we’ve paid for a good or service over time, how that compares to third-party indices, and how different suppliers compare in lead time, price, and quality. Part numbers help us track savings, present information cleanly to executives, and have data clean enough to make good use of AI tools. If there is a part or service purchased more than once each year, it needs a part number.
As a consultant coming into a company, part numbers are hugely impactful on my ability to help a company. While most of my clients don’t have many part numbers (some don’t have any), I can hit the ground running much more quickly when they do. If you’re not sure where to go with your supply chain or procurement next, start with some fundamentals and assign a few part numbers to at least your most important purchases.
Part Number Taxonomy
While assigning random numbers or letters to make part numbers is always an option, I’ve always been a fan of a part number that tells me something when I read it. If you have the freedom to influence part numbers for your business, consider the following:
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- Make it long enough. While you may be a small company now, make sure you have enough digits in your part numbers to last a long time. You probably need at least seven digits, and nine is not unreasonable. Example: ######### as an engine part number.
- Consider the part’s category. Regardless of what category system you use, if you have category numbers, consider including them in your part number. I’m partial to UNSPSC categories because they are managed and maintained by a third party, many source-to-pay and ERP systems come with them already installed, and they are reasonably well known in the procurement world. When using categories in part numbers, I like to use the highest-level category so people aren’t memorizing dozens or hundreds of categories in order to get information from their part numbers. Example: 26-###### as an engine part number (26000000 is the family for Power Generation and Distribution Machinery and Accessories in UNSPSC).
- Consider the year of creation. Using the year a part was designed/created/specified can be helpful, especially if your business has rapid turnover for customer-facing assemblies or needs to keep track of the year something originated. This can also solve the “we don’t have enough part numbers” problem because your randomly assigned set of numbers only has to happen within each year. Example: 25-###### for an engine specified in 2025.
- Note manufacturer part numbers. Especially for off-the-shelf part numbers, some companies simply adopt the manufacturer part number for their own use. This can be very helpful in finding replacements or otherwise being able to get specifications from third-party sites. The disadvantage here is not being able to compare similar or replacement products from multiple manufacturers easily. Example: K301-47460 for a specific 12 hp engine made by Kohler.
- Consider the department/business unit. One of the manufacturing companies I worked for used this method, but many of the engineers I worked with didn’t even know so it was like a secret. Part numbers starting with 296 were from our trenchless division. Part numbers starting with 180 came from the environmental division. That meant I could tell by looking at a part number where it was initially designed. In a very Lean company, this can actually tell you how efficient part designs are because it indicates when one part is used by multiple divisions. For example, when I found a part starting in 180 on a machine from the division that used 296, I knew the part starting with 180 was probably also used in another division. That also meant I needed to go check where else a part was used before I made any modifications to it. Example: 296###### for an engine specified by the trenchless division.
I’m sure there are other methods for assigning part numbers, but those are the ones I’ve seen personally. Even in randomly assigned part numbers, there may be patterns that you can use to find more information about the part (such as certain parts of a sequence that correspond to when the part number was created). If your business uses part numbers, take a closer look and see if you can find a useful pattern.
If you would like to talk about your business’ part numbers or how they are relevant to your procurement team, let’s chat. If you’d like to get these articles weekly straight to your inbox and never miss one, sign up for my newsletter.
My book, Transform Procurement: The Value of E-auctions is now available in ebook, paperback and even hardcover format: https://www.amazon.com/dp/B0F79T6F25
