After defining System item flexfield next step to do is to define Item categories flexfield .
1. Go to Inventory responsibility and open Key Fleffield 
    Flexfield -> Key -> Segments

Key Flex Field

In flexfield title search for Item Categories.

Item Categories

2. Enter new record in this case ORK Item Categories. Now click on segments to enter segments summary.

3. You can define any number of segments according to your business requirement  here is this example we   will define three segments.

4. Enter first segment as Super Category. assign column and value set to this segment.
5. Repeatedly do above step for both next segments.Column indicates the database fields that will hold entered value for specific segment. Now enter your desired item segments name and their corresponding value sets.
6. Now freeze flexfield and compile it.
Optional step before defining inventory organization
Define Location.
1. Now In Inventory responsibility navigate to
    Setup -> Organizations -> Organizations

Enter organization name and type from pre defined list.
In this case this organization is defined as Master Org.
2. To define a location navigate to
     Setup -> Organizations -> locations


There are two options for scope Global and Local
Global: If global selected then this location will be available for all modules.
After entering name and description move to address details tab.


3. Choose your address style as address styles are defined according to your country.
    Enter remaining details and save you work. 

4. Now select location ORK Locations in organization definition form.

    Save your work as it is required before proceeding to next step.
    In classification tab select inventory organization from list of values and check it.

5. Now click on others to add additional organizational information.
1.EGO_ITEM_PUB.Assign_Item_To_Org

This API provide functionality to assign one/more items to an organization(s)
How to Assign Item Using Assign_item_to_org 


2. Item Creation and Updation Public API.
This API used to create items.
EGO_ITEM_PUB.Process_item(s)

 3. Category Code Creation Public API.
This API provides functionality to create a category.
INV_ITEM_CATEGORY_PUB.Create_Category

4. Item Category Assignment Public API
EGO_ITEM_PUB.Process_Item_Cat_Assignment

5. Item Catalog Descriptive Element Public API.

EGO_ITEM_PUB.Process_item_descr_elements

6. Item Revision Creation and Updation Public API.

EGO_ITEM_PUB.Process_Item_Revision
7. Implement Item Pending Changes Public API.

This API provides functionality to implement pending changes (phase and/or status) for an item/item revision.

EGO_ITEM_PUB.Implement_Item_Pending_Changes
8. Item Lifecycle Public API.

EGO_ITEM_PUB.Process_item_phase_and_status
9. Item Grant public API

EGO_ITEM_PUB.Process_item_role
10. Item User-Defined Attributes Data Public API.

EGO_ITEM_PUB.Process_User_Attrs_For_Item
11. Item Assignment to an Organization Public API.