Topic 3: STANDARDIZATION OF MATERIALS

Introduction
Standardization means producing maximum variety of products from the minimum variety of

materials, parts, tools and processes. It is the process of establishing standards or units

of measure by which extent, quality, quantity, value, performance etc., may be compared and

measured.

Objectives
Objectives by the end of this topic you should be able to:
Describe the various aspects of standardization.
Explain the influence of standardization to various departments.
Explain the importance of standardization to the overall performance of an organization.

Learning activities

Learning Activity 3.1: Reading

Read the provided topic notes on curriculum design.
Learning Activity 3.2: Discussion
Explain the overall importance of standardization to the performance of an organization
Post your discussion in the provided discussion forum
Assessment
The Participation in the discussion in activity 3.2 will be graded

Topic Resources

Supply Chain Management: Strategy, Planning & Operation 2007 by Chopra and Meindl
Manufacturing Planning And Control Systems For Supply Chain Management

STANDARDIZATION
Standardization means producing maximum variety of products from the minimum variety of

materials, parts, tools and processes. It is the process of establishing standards or units

of measure by which extent, quality, quantity, value, performance etc., may be compared and

measured.
Standardization is the process of creating standards to guide the creation of a good or service
based on the consensus of all the relevant parties in the industry. The standards ensure that goods
or services produced in a specific industry come with consistent quality and are equivalent to
other comparable products or services in the same industry.

Standardization also helps in ensuring the safety, interoperability, and compatibility of goods
produced. Some of the parties involved in the standardization processes include users, interest
groups, governments, corporations, and standards organizations.

Advantages of Standardization

All the sections of company will be benefited from standardization as mentioned below.

Benefits to Design Department

1. Fewer specifications, drawings and part list have to prepared and issued.

2. More time is available to develop new design or to improve established design.

3. Better resource allocation.

4. Less qualified personnel can handle routine design work.

Benefits to Manufacturing Department

1. Lower unit cost.

2. Better quality products.

3. Better methods and tooling.

4. Increased interchangeability of parts.

5. Better utilization of manpower and equipment.

6. Accurate delivery dates.

7. Better services of production control, stock control, purchasing, etc.

8. More effective training.

Benefits to Marketing Department

1. Better quality products of proven design at reasonable cost leads to greater sales volume.

2. Increased margin of profit.

3. Better product delivery.

4. Easy availability of sales part.

5. Less sales pressure of after-sales services.

Benefits to Production Planning Department

1. Scope for improved methods, processes and layouts.

2. Opportunities for more efficient tool design.

3. Better resource allocation.

4. Reduction in pre-production activities.

Benefits to Production Control Department

1. Well proven design and methods improve planning and control.

2. Accurate delivery promises.

3. Fewer delays arise from waiting for materials, tools, etc.

4. Follow-up of small batches consumes less time.

Benefits to Purchase and Stock Control Department

1. Holding of stock of standard items leads to less paper work and fewer requisitions and

orders.

2. Storage and part location can be improved.

3. Newer techniques can be used for better control of stocks.

4. Because of large purchase quantities involved, favourable purchase contracts can be made.

Benefits to Quality Control Department

1. Better inspection and quality control is possible.

2. Quality standards can be defined more clearly.

3. Operators become familiar with the work and produce jobs of consistent quality.

Other Benefits

1. Work study section is benefited with efficient break down of operations and effective

work measurement.

2. Costing can obtain better control by installing standard costing.

3. More time is available to the supervisors to make useful records and preserve statistics.

4. Reduced reductions and scrap.

5. Helps supervisors to run his department efficiently and effectively.

Disadvantages of Standardization

Following are the disadvantages of standardization:

1. Reduction in choice because of reduced variety and consequently loss of business or

customer.

2. Standard once set, resist change and thus standardization may become an obstacle to

progress.

3. It tends to favour only large companies.

4. It becomes very difficult to introduce new models because of less flexible production

facilities and due to high cost of specialised production equipment.

Effects of Standardization

Some of the effects of standardization include the following:

Firms

When competing firms standardize their products and services, the competition shifts from
integrated systems to the individual components. This means that companies whose main selling
point is the integrated system must change strategy to focus on the individual components of the
system.

Companies can create a competitive advantage by selling components or sub-systems of the

integrated system to other businesses that are compatible with their business model.

Consumers

One of the benefits that consumers reap from standardization is increased compatibility and
interoperability between products. For example, when communication gadgets and services are
standardized, consumers can share information across a large number of people who are not
limited by a specific service or product.

Also, consumers can match up the components of a system in a way that fits their specific
preferences. However, standardization can also adversely affect consumers. For one, it means
that options will be limited for consumers. Also, standardization may limit producers from
providing more value to consumers than their competitors, because they are constrained by the
standards.

Technology

The effect of standardization on technology is mixed, and it may yield both positive and negative
outcomes. The positive effect of standardization is that it can help weed out incompatible
technologies in the market that slow the growth of technology. There will be an increased uptake
of standardized technology, which will spur the growth of the technology industry. A familiar
example of standardized technology is that of software programs that are compatible with the
Windows operating system.
On the downside, standardizing technology restricts the innovative quality of new and existing
technologies.