by “Standardization” looks different for every supply chain. For some, standardization comes in the form of leveraging blockchain technology. For others, it might be a system-wide standardization of labeling goods. There should likely also be standards for labor practices, social responsibility, and shared long-term objectives.
Standardization or standardisation is the process of implementing and developing technical standards based on the consensus of different parties that include firms, users, interest groups, standards organizations and governments. Standardization can help maximize compatibility, interoperability, safety, repeatability, or quality. It can also facilitate commoditization of formerly custom processes. In social sciences, including economics, the idea of standardization is close to the solution for a coordination problem, a situation in which all parties can realize mutual gains, but only by making mutually consistent decisions. Standardization is creating emotional balance, conventional detail, a universal familiarity and natural definition to a concept based on physical or emotional comfort and acceptance by changing societal behaviors and developments.
Essentially, you’re looking to standardize processes to most efficiently deliver goods to your customers. This means smoothening out the procedures from start to finish, so it runs like a well-oiled machine. Standardization maximizes safety, consistency, and quality. It offers seamless integration and streamlined operations that optimize the efficiency of supply chain management.
Standardization of processes is a must-have for high performing supply chains. According to Learn G2, 79% of companies with supply chain management systems achieve higher revenue growth than those that don’t have an optimization plan. They are able to better deliver to clients while cutting costs throughout the chain. In an industry where lean, fast, and transparent reign as the three pillars, standardization of the system is critical for high performance.
Some of the benefits of standardization:
- Higher revenue generation
- Faster turnaround of goods
- Reduced resource waste
- Greater return on investment (for all partners)
- Lower expenses
- Improved productivity of the entire chain
- Fewer drops in errors, losses, and delays
- Centralized communication
- Increase in procurement and buying power
Standards can be:
- De jure standards which are part of legally binding contracts, laws or regulations.
- De facto standards which means they are followed by informal convention or dominant usage.
- Voluntary standards which are published and available for people to consider for use.
The existence of a published standard does not necessarily imply that it is useful or correct. Just because an item is stamped with a standard number does not, by itself, indicate that the item is fit for any particular use. The people who use the item or service (engineers, trade unions, etc.) or specify it (building codes, government, industry, etc.) have the responsibility to consider the available standards, specify the correct one, enforce compliance, and use the item correctly: validation and verification.
Standardization is implemented greatly when companies release new products to market. Compatibility is important for products to be successful; this allows consumers to use their new items along with what they already own.
There are typically four different techniques for standardization
- Codification
- Simplification or variety control
- Value engineering
- Statistical process control.
