You have an item "Widget" (Product ID W) with 2 style groups, Color (ID 10) and Size (ID 20). Your Color group contains Red, Blue and Green. Your Size group contains Large and Small. If the customer chooses a Red (Style Code RD), Large (Style Code LG) widget, the Part Number ordered would be W-RD-LG. This will allow you to synchronize multiple inventory items at your business or warehouse with a single product in the shopping cart. If you wanted size to come before color (W-LG-RD) you would need to renumber the Color Group and Size Group IDs. The final output may be altered by changing the 2 settings below in Application.cfm.
You may also add additional Style Groups to the same item with this feature set to No. For example if the Large, Red Widget ordered gets Holes punched in it before delivery, and the customer has a choice of Square Holes or Round Holes, you may add the Hole Type style group with this set to No. The style code of the Hole selected would not affect your inventory so would not be used to build the Part Number.
Be sure to see Product Grouping for expanded functionality for this feature.
Now that you've created a Style Group, see "Add Styles To Groups".