Basics of Planning & Procurement in Material Management (Standardization & Codification)

 Basics of Planning & Procurement in Material Management (Standardization & Codification)

STANDARDIZATION & CODIFICATION

Standardization

Standardization in Materials Management is a process of producing maximum from minimum. Productivity is maximized from a minimum variety of materials, parts, tools and processes. Standardization begins with the creation of detailed and precise specifications for the materials and products used in the organization. These specifications outline the quality, dimensions, features and other relevant characteristics of the materials. By adhering to standardized specifications, organizations can ensure consistency and avoid problems related to incompatible or substandard materials. The primary goal of standardization is to streamline operations, improve quality, reduce costs and enhance overall productivity.

Some of the international standards are the British Standard (BS), the American Standards Association (ASA) or the American Society for Testing Materials (ASTM).

Points to remember during standardization

• Standards form the basis of production
• Standards specify products in terms of unit size made and sold
• Standards are specified based on the type of production unit
• Standardization is aimed at making economical production units
• Standardization can vary with new material types

Benefits of Standardization

• Standardizing the procurement process involves creating uniform procedures for sourcing, vendor selection and purchase order generation.
• Standardization in inventory management involves defining common units of measurement, stock categorization and stock-taking procedures.
• A well-structured and standardized inventory management system helps prevent stockouts, overstocking and obsolescence of materials.
• Standardized quality checks and inspection procedures ensure that the materials meet the required standards and comply with regulations.
• Standardizing the equipment and tools used in materials management ensures that employees can work efficiently and safely.
• Once standard processes are in place, organizations can collect data, identify inefficiencies and implement changes more effectively.
• It helps in defining clear quality standards with efficient inspection and consistent quality
• Standardization results in cost savings through bulk purchasing and reduced variability in operations
• Training employees in standardized materials management practices ensures that everyone follows the same procedures and protocols.
• Creating standardized templates for records, reports and data entry helps improve data accuracy, traceability and decision-making.

Simplification

The process of simplification aims at reducing unnecessary varieties and standardizing to the most economical size of a product or set of products. Simplification involves the process of reducing complexity in products, processes or organizational structures. The idea is to eliminate unnecessary features, components or steps that do not add significant value to the end product or service. By simplifying, companies can enhance productivity, reduce production time and minimize the potential for errors. It also leads to a more straightforward and user-friendly experience for customers.

Example: A company may decide to simplify its product line by consolidating similar product variants into a single offering, eliminating less popular products or standardizing components across different product models.

Variety Reduction

Variety reduction focuses on minimizing the number of different products or options within a product line. It aims to rationalize the product range by eliminating redundant or low-demand items. By reducing the number of variants, organizations can achieve economies of scale in production, inventory management and marketing.

Example: A company might analyze its product offerings and identify similar products that cater to a niche market with low sales. By removing or consolidating these low-demand items, the company can concentrate its efforts on the most popular and profitable products.

Classification/ Codification of Materials

Codification in materials management refers to the process of assigning unique codes or numbers to different materials, products or inventory items within an organization. The main purpose of codification is to create a standardized and systematic identification system that facilitates efficient management, tracki