Standards facilitate everyday life. They increase safety and can be used to rationalize operations. Standardization ensures that products, services and methods are appropriate for their intended use. It ensures that products and systems are compatible and interoperable.
A product manufactured according to standards is accepted in the international markets. Using standards removes barriers to trade.
There are many different standards in the world. Paper and envelope sizes, clothing and shoe sizes, food packaging, screws, nuts, and many other familiar things in the market are based on standards. All manufacturing and construction as well as installation, repairing and maintenance work is conducted in accordance with standards. In addition, using systems, devices, and equipment, as well as operating processes and maintaining them, requires standards.
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.
Benefit of Standardization
Standardization enables industry to proceed on scientific lines to locate factors influencing preparation of inventory control programmes, for achieving economy on materials and parts, avoiding wastages, disposal of unwanted stores and reduction in stock cover without much trouble.
Identifying the problem areas and resolving such problems so as to keep the supply line open, reducing the capital investment to the minimum by reducing variety, improving input-output ratio; formulating the quality index of the goods as well as suppliers, formulating reliability index of both, standardization programme helps materials management in many ways. Standardised materials and parts have thus obvious importance to inventory control.
According to Bureau of Indian Standards (ISI), standardization has the following advantages:
- Manufacturers can streamline production process, introduce quality control systems and avail an independent audit of quality control by ISI, reap production economies accruing from standardization, project a better image of their products in internal and overseas markets, win for their wholesalers, retailers and stockists, consumer confidence and goodwill; generate preference for ISI-marked products by organized purchasers of both private agencies and government bodies; get higher prices for ISI-marked goods and obtain incentives offered by financial institutions and nationalized banks.
- Consumers get the products certified by an independent national technical organization; secure help in choosing standard products; they are protected from exploitation and deception and from replacements of ISI-marked products that are of sub-standard quality and an assurance of safety against hazards to life and property.
- For organized purchaser, ISI certification is a convenient basis for concluding contracts, which obviates the need for inspection and testing of goods and thus saves time, labour and money.
- Exporters are exempted from pre-shipment inspection wherever admissible and standards act as a convenient basis for conducting export contracts and for elimination of need for the exhaustive inspection of consignments by the export inspection authorities.
- Overseas buyers are assured of the quality as per Indian standards and free replacement substandard goods.