- Add your image
- Add a caption
- Add a Bookmark
- Reference your figure with the Word field called "SEQ"
Now when you move your figure and caption around the document, the sequence number will change in your figure and your reference to it can be updated by updating all of the fields in the document (Ctrl + A to select the whole document and F9 to refresh all the fields.)
Web version html | DOC
(the Word document itself is an example of how this works)
Sorry for redirecting you away from Instructables but this just doesn't work so well here. It is much more helpful to look at the Word document itself to see how it is done. The HTML gives you an idea to.