When ever published standards are available from outside sources the same can be applied. The frequency distribution of demand for each type and size of an item in terms of quantity of materials purchased/used /or products sold, would be an excellent starting point for standardization and variety reduction in an organization. For instance, consider the example where the diameters in millimeters of pipes are 5.0, 5.1, 5.2, 5.3, 5.4 and the past pattern shows that only two sizes 5.1 and 5.4 are often used. Then the orders for the remaining three dimensions can be gradually discontinued if these items are not critical from performance and safety angles.
The preferred number series-a series of standard sizes is suitable steps used in the bulbs and currency-developed by Renaud and known as R-5, R-10, R-29, R-40 etc is another way of stating the standardization process.
Simplifications refers to reduction of the number of the company, supplier, or standard materials used in the product or process during product design. For example, an engine starter manufacture could design all of its starter model to use a single type of housing or solenoid. Thus, simplification can further reduce the number of small value purchases while reducing storage space requirements, as well as allowing for quantity purchase discounts. Simplification can achieved as follows;
- Accumulating Small Order to Create a Large Order
Number small orders can be accumulated and mixed into a large order, especially if the material request is not urgent. Otherwise, purchasing can simply increase the order quantity if the ordering cost exceed the inventory holding cost. Larger orders also reduce the purchase price and unit transportation cost.
- Using a fixed order interval for specific categories of materials/supplies
Another effective way to control small orders is to group materials and supplies into categories and then set fixed order intervals for each category. Order intervals can be set as biweekly or monthly depending on usage. Instead of requesting individual materials or supplies, users request the appropriate quantity of each item in the category on a single requisition to be purchased from a supplier. This increases the dollar value and decreases the number of small orders.
Benefit of standardization
The warehousing and inventory manager must have an unambiguous nomenclature for identifying the terms, in order to serve the customer promptly.
- In this process, standardization which reduces the variety plays a vital role by reducing the number of varieties of the same item held in the warehouse.
- More than any other executive, the stores in charge comes into direct contact with a variety of materials. He can gain knowledge on the uses of materials in the store and can contribute significantly to achieve standardization.
- Standardization enables one to concentrate on large quantity of fewer items.
- It is possible to place economic order quantity or orders of staggered deliveries with bulk discount.
- Economic lot size at manufacturing will not be a problem as items can as items can be manufactured with the same set up timings for standard items.
- Since the inventory is likely to be less, the working capital commitment of the organization will also be less.
- The items can be easily identified by all persons in stores as the bin location can also be standardized.
- Standardization reduce the time involve in negotiation process with the suppliers as communication is better with prompt delivery schedule.
- The procurement lead time gets reduce as everyone knows the item clearly.
- The buyer-seller relations can be improved as all dimensions including price analysis. Specifications lead time etc, are standardized without scope for disputes.
- Standardization promotes healthy competition amongst vendor as standard items can be bought by several companies.
- Standardization minimizes obsolescence.
- It is possible to have rate running contracts for standardized items.
- Standardization reduces design time by concentrating on fewer parts.
- It minimizes draft time through respective of standard drawings.
- It expands the engineers list of known and power items.
- It reduces specification writing by repetitive use of standard specifications.
- Interchangeability of parts is assured through standardization.
- Lower cost of production through continuous manufacturing run with less material handling problems and increased capacity utilization is achieved by standardization.
- The workers at all levels and departments become more efficient by repeated handling of items and it is possible to utilize less skilled workers for standard operations.
- Standardization enables reduced inspections and quality control burden.
- Since methods are standardized, it ensures safety to all.
- Standardization directly reduces the variety and improves the information system of the warehouse manager.
- Standardization enables reduced number of maintenance tools and improves maintenance practices.
- Standardization aims at maximum variety of finished product with minimum categories of assemblies, sub assemblies and components.
- In general, standardization result in simple operations, minimum paper work, improve inter departmental coordination, ease of computer application and pinpoints areas involving inefficiency. In short, standardization is a means to faster and better understood communication, with fewer mistakes and hence smoother life.
Roadblock to standardization
Standardizations should not lead to monotony and prohibit innovations. For instance, it is not possible to introduce standardizations of end products in job shops, but assemblies/parts constituting a final product may be standardized. Similarly, it is possible to standardize items like shoes in terms of seven, or eight sizes. Standardizations must not lead to rigidity in design or restrict technical development. Standardizations is also based on previous practices.
In summary, the following points should be borne in mind;
- Identify the relevance of standardizations in warehousing and inventory management
- Discuss the benefit of standardization to different departments in the organizations
- Explain how you will identify the items of standardizations
- Describe the procedures for standardizations
- Enumerate the pitfalls of standardization
- Elucidate the applications of the concept of frequency distributions to standardizations
- Clarify the concepts of preferred number series in relations to standardization
- Specify the interrelationship between standardizations ,simplifications and specification
- Explain the role of Kenya bureau of standards in development of standards
- Examine the scope of standardizations in job shop, office and administrations.