Unit of Measure (UOM) is an attribute that describes how an item is counted. When we consider sundry items like a gallon of milk, a pair of gloves, or a case of beer the concept of UOM is deceptively simple. However, for manufacturers, hospitals, and retailers, Units of Measure can make or break their supply chain solution. Inconsistencies in UOM data across functional areas or gaps in how units are converted can create data exceptions in procurement, inventory, and other operations. This could lead to incorrect inventory counts, delayed orders, and storeroom confusion.
Why would a single item have multiple Units of Measure Anyway?
An individual item can often be represented using different units of measure based on the context. Medical exam gloves provide an intuitive example, they are procured in bulk by the case, stocked by the box, and used by the pair. A single item can have multiple units of measure because employees in diverse job functions – like procurement, storeroom, or nursing – interact with the same item in distinct ways.
Intraclass UOM Conversion explained
Converting across units of measure is a necessary part of supply chain management. Continuing the example with gloves, let us say the storeroom managers in the hospital calculate they need 12 more boxes of gloves. Since gloves are only sold in cases a conversion from boxes to cases is necessary, 1 case of gloves equals 10 boxes of gloves. Consequently, 2 cases of gloves are needed to fill the need for 12 boxes of gloves.
Converting between cases and boxes is an example of an intraclass UOM relationship. The intraclass moniker means that the separate units of measure being considered are of the same class, in this case the class is quantity.
Interclass UOM Conversion explained
Additionally, some items have interclass UOM relationship to convert between different classes of measure - like from quantity and volume. For example, consider vials of medicine. For certain types of medicine, the stocking unit of measure is ‘vial’ and this makes perfect sense as a stocking unit considering how vials of medicine are individually stored in trays and racks. However, for clinical purposes the unit of measure is often milliliter. For the system to work with both units, an interclass UOM relationship needs to be set up to determine how milliliters equates to each vial. This ratio will be different from item to item so a unique interclass UOM is set up for each item that requires it.
Criticality of accurate UOM data
It is impossible to order, receive, or stock items in a unit of measure that has not been assigned to the item. For example, if a purchase order is for a ‘pack’ of masks, but the item is only set up in the system with the ‘each’ then the purchase order will fail or go on hold. Inventory and procurement data is often fed to boundary systems (Epic, Ivalua, WaveMark, and others) that manage inventory or contract information. The unit of measure used needs to remain consistent across these interfaces or have clearly defined rules for how the units are converted.
Inaccurate UOM relationship data can cause supply chain snafus. Consider what might happen if the ‘case’ you orders contains 10 ‘boxes’ but you expected it to contain 100! Inaccuracies like this could throw off operations and require expensive rush deliveries to resolve. Whether your business is implementing a new supply chain software solution or implementing a master data management strategy having a approach to identify and solve UOM data issues is critical to your success.