Benefit of Standardization in Materials Management

Introduction:

A “standard” refers to anything we use as a measure.  any specification that is used  repeatedly becomes a standard. By standardization, the quality, quantity, value, performance or services  can be gauged or measured.

The basic definition of standardization can be -  “Unification of methods, practices and techniques, involved in the manufacturing, construction, use of materials, machines and products, which present the necessity for performing repetitive work”.

History of Standardization:

History says that the Standard weights and measures were invented by the Indus valley civilization.The merchants, at that time used these standard weights and measures to do business of Food grains, materials, clothes, valuable items, stones etc. 

history of standardization

There are two different aspects of standardization:

1. The first one is concerned with the size, shape, color, physical and chemical properties or performance characteristics of materials or products.

2. The second one is concerned with the managerial aspects of a business activities for example the standards of operation, practices procedures and systems.

Here we are concerned with the former.

In any business there are industry standards, national standards International standards and Company standards.

It is very desirable for the purchase department to keep abreast of standards and the Purchase and maintain publications relating to standards of all materials, parts equipment etc with which they are concerned. this should be properly arranged function wise.

There are many advantages in using standard material or components. To develop the industrial revolution,mass production, standardization has a big role. Because of mass production, manufacturers have been able to improve their technology to raise productivity and improve quality leading to reduction in prices at the end products.  

Objectives of standardization can be summarized below:

1. To achieve maximum overall economy:  this may be in terms of costume and effort and conservation of essential materials as opposed to more readily available materials.   as opposed to more readily available materials this involves judicious choice of raw materials and the adoption of production and handling practices is known or expected to be most economical.

2. To ensure maximum convenience in use: This leads to simplification, rationalization, interchangeability of parts and confirming the dimensions of components. This, in turn, increases productivity, elimination of unnecessary waste and shortening of inventory.

3. To adopt the best possible solution to recurring problems: with the above two points and taking into account all the available scientific knowledge and up-to-date technological development the objective of standardisation is aimed at facilitating design processes and guiding the formulation of research and development programs. it involved standardization of basic terminologies,   Test procedure,  codes of practices,  forms of specifications in general.

4. To define the required levels of quality: in order to facilitate property valuation of quality and its attainment. This leads to the standard deviation of Sampling  procedures, testing methodology,  grading scheme and quality specification.

From the objectives of standardization it can be seen that most of the following objectives of Material Management are made in the process of standardization:

1. saving of raw materials particularly those which are squares and essential due to rationalization and variety reduction.

2. reduction in materials cost storage space and inventory.

3. import substitution or localisation

4. contribution to price stabilization

5. improvement in quality due to streamlined and stabilized process

6. reduction in cost of canned products thus ensuring competitiveness of the product in the market

7. availability of standardized spare parts leading to a reduction in the cost of maintenance and services along with reduction of downtime which in turn, reduces heavy production loss.

8.  improvement in export potential

9.  elimination of reduction in waste and scrap

10.  Contribution to the continuity of production and higher productivity

However the use of company national or International standard has its drawbacks and consequently entails risk. As per as purchase department is concerned the below problems that may arise:

1.  This could stop creative thinking and development of new ideas.

2.  It may be possible with a little extra expenditure to obtain a better or more suitable tailor made components than the standard items for incorporation in the end product. This search for small economy might not be in the world in tourist in terms of quality of the end product

3.  manufacturers making the standard product may get together and raise their prices so that the benefit original regained his nullified. buyers have to be aware of their possibility. At the same time, there are a number of ways in which the purchase department stands to gain as a result of standardization.

Major Benefits:

1.  standardization leads to a reduction in the varieties of items kept in stock. Thus results in lesser stocks being kept in the warehouse which, in turn, save cost.

2. When there are less numbers of varieties it means large quantities of one item rather than small quantities of several items. This reduces the unit purchase cost as a buyer can obtain a quantity discount.

3.  different types of stalking policy can be derived and implemented in case of standardization and less variety.

4.  standardization eliminates the requirement of long drawn out explanations and descriptions for each and every item purchased to make the supplier clearly understand the quality requirement.

5.  This increases the scoop of competition.  the purchaser does not have the compulsion to purchase only from one Specialists supplier.

6.  it reduces the scope of error

7. It helps to reduce some aspects of purchasing activities to a routine.