Almost all organizations use and store a large number of items. Some of these have relatively longer life, for example, buildings, plants, equipments, machines, furniture’s etc. while others, in a rather large number, running into lakhs, spend shorter time with the organization, for example, materials, components, tools, stationeries, etc. We shall concentrate mainly on materials and parts.
Several departments of the organization require the information about the materials and their requirements are usually different from each other. For example, it is easy to visualize how the information requirements may have quite a wide spectrum by departments such as receipt, storage, inspection, design, engineering inventory, accounts, marketing etc. about a given material. Some departments are interested in the size, volume, shape, some in engineering properties; some in financial aspects while some in the commercial value of the material. It is quite likely and perhaps sometimes purposeful for an item to get identified by different names by different departments of the organization. A dustbin may be known as refuse container, rubbish-box, etc. An electric company in UK had as many as 118 names, for a simple screw with a width of 3/8 in. and length of 6 in., depending on type of usage and the department using the screw. These may, however, result in confusion and tend to duplicate ordering or overstocking. The problem could really explode beyond dimension when the number of items is very large (as usually it is) and there are several external organizations, suppliers, wholesalers, retailers, customers etc. who prefer to call an item by different names: some by brand name, some by manufacturer reference number, some by engineering name, and some by serial number.
Quite often, a good number of products or parts may differ very marginally or insignificantly from each other in dimensional or some similar characteristics. The functional requirements will be equally well served if all such parts are made to the same common specifications. This is called standardization. The process of standardization logically leads to reduction in the number of part, variety that an organization handles.
For the purpose of convenient understanding of the topic, we shall discuss classification, codification, standardization, and variety reduction in that order.
