Word can automate this in two main ways:
- Seq field (see 10 steps to creating inline numbering in a Word document - TechRepublic)
- Outline lists (see How to create numbered headings or outline numbering in Word 2007 and Word 2010 | ShaunaKelly.com)

Either method would work so you can make your choice as to what you prefer to use.

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Andrew Lockton
Chrysalis Design, Melbourne Australia