Standardization is defined as a process of formulating and applying rules for an orderly approach to a specific activity with the cooperation of all concerned, and in particular for the promotion of overall conditions and safety requirements that benefit all. This definition, however, has a rider to it in that the process of formulation should be based on the consolidated results of science, technology, and experience, keeping in view the present and the future development, and should keep pace with progress. Simplification also referred to as variety reduction is a form of standardization consisting in the reduction of the number of types of products, within a definite range to that number which is adequate to meet the prevailing needs at any given time.
Standardization is but a synonym of variety reduction in so far as the Materials Management vocabulary is concerned. Its, more or less, universal practice is aimed at promoting operational efficiency by limiting the technicalities involved to be mastered on the one hand and for controlling the inventory by reducing the variety of spares required for the purpose of holding on the other. Thus a product is said to have been standardized by a single user when the same is used exclusively in preference to and at the exclusion of the rest of the available alternatives at any given time. Though it is both rational and logical to standardize, the practical utility of this measure in terms of the attendant potential advantages inherent in it depends on the methodology adopted for standardizing it. Judging from the way standardization tends to be done, we can categorize the same as that emanating from the rule of thumb method or borne out of systemic approach. The functioning of standardization under these categories will, indeed, make a study in contrast as we shall observe.
Rule of thumb method of standardization
The fundamental difference between the rule of thumb method and the systemic approach to standardization lies in the former’s emphasis on the observance of the definition part of standardization without adequate regard to the principles enumerated in the rider whereas in case of the latter the futuristic concept of the rider takes primacy. Lack of the knowledge in the absence of proper backup logistic services and practical limitations of a given situation contribute to the thumb rule method of standardization. For a variety of reasons resorting to standardization is mostly prompted by the desire to rationalize the irrational product mix on hand than riveting to it as a means for the prevention of the product proliferation in the first instance. Thus, it is sought to be used as a cure when it had the potential for prevention itself.
Confronted by the variety of products in usage, with its attendant maintenance and servicing bottlenecks besides the unavailability of economics of scale, an exercise in standardization becomes imperative at one stage or the other. Since the scope of such an exercise is merely of salvaging, it will naturally be conditioned by the constraints of the given situation. The advantages of a clean-slate situation in that there would be no compulsions for compromise of any sort are not available for the standardization process of this nature. Any attempt at restricting and streamlining the existing product mix has to reckon with the numerically predominant makes in usage, not withstanding their comparative merits and demerits, vis-à-vis the competitive products, not only operational in the company but also available in the market at that time. As considerable investment would have been made in the form of maintenance, repair, and operating supplies, MRO inventories, the discontinuation of the lead product in usage to give way for the introduction of a superior alternative will not work out to be advantageous, at least, in the short term aspect. The balance of short term economics tilts in favour of its continuance and even its long term perpetration irrespective of its operational deficiencies. This product thus comes to represent the Sisyphus rock of the operational system.
Whereas the economics against change are loaded in favour of the continuation of the high investment oriented products, force of habit seems to prevail over innovation and experimentation in case of the low investment products as well. It may be true that a given brand would have been the best available product of its kind (quality and cost-wise) when the same was chosen for standardization but the continuous patronage of the same without a periodic review of its performance in comparison with the available alternatives from time to time could be counterproductive. Moreover, the competitors in the meanwhile might have caught up with the once-market leader in terms of technological innovation and even excelled in it; even otherwise, the price offered by the competitor’s quality-for-quality may be advantageous for contemplating a switchover. Ignoring these factors, in the mistaken notion that once standardized, standardized forever, is like standardizing standardization itself. After all, standardization is a progressive management concept and habit or lethargy should not be allowed to make it retrograde.
Systemic approach to standardization
No investment is attendant with such far-reaching consequences on the efficiency, profitability and indeed the long-term viability of an industrial undertaking as the one in the plant and machinery component of it and the attendant process that necessitates it. Never was this premise so true than in the present-day technological environment punctuated as such with constant research and development, leading to perpetual updating of technology. It is said that fashion used to change by the hour in Paris of yore, and the current analogy could, as well, be that technology is changing by the year, the world over. We have already seen the practical limitations for change of any existing product with a new breed technology alternative. Besides, the people manning the attendant logistic functions, such as operation, maintenance and servicing, attuned as they are to the product in existence are required to be reoriented for adjusting with the complexities o the new product as and when introduced.
Systemic approach to standardization is the only recourse under these circumstances and this in the main consists in formulating the process of selection of a product keeping in view the present stage of advancement and its future scope of development. Thus while selecting a product for standardization, factors such as the R & D effort of the manufacturer, past track record of development, present state of the technology used, future product development plans, envisaged collaborations or technology transfers etc. are to be taken into account for arriving at a product which yields maximum flexibility for subsequent improvements without sacrificing the advantages of its standardization. In other words the switchover, as and when undertaken, should not only be smooth in the operational sense but also restrict the resultant obsolescence to the acceptable levels.
In case of the low spares or no spare inventory products, however, one had to constantly monitor the improvements in the design, operation, and efficiency of various brands besides their price structure and make the switchover as and when warranted.
Hence, standardization should be viewed as a means for achieving the end result of operational efficiency and not as an end of the means for change.