Standardization

Standardization refers to designing protocols and policies for creating products or conducting certain activities based on the stakeholders' consensus. In simple terms, in a business environment, the process creates a framework and set of guidelines for entities to follow and deliver products and services with a consistent standard and quality.

Organizations engaged in production or services find it useful to ascertain that they follow a systematic and regulated process for producing the same products or delivering the same services. It is to attain uniformity in the products and services offered and cost reduction. There are different types of standardization, for example, process and language, each having a different objective and approach.

• The standardization process is where all the parties belonging to a particular industry or sharing common interests come together to form an agreement defining standards and guidelines to be followed.
• Different stages of the process include selection, codification, elaboration, and acceptance.
• It creates uniformity or consistency for specific actions or procedures inside the selected setting.
• It has wide applications in trading stocks and commodities, accounting, manufacturing, management, judicial system, etc.

Standardization is a powerful technique in production and operations management. Eli Whitney introduced the concept as a part of engineering operations in the 18^th century. In the 19^th century, it became a powerful tool among countries with strong arms in industrialization to increase productivity. By the 20th century, there was a high spike in the industry, with plenty of corporations indulging in the standardization work, and it became a routine.

Many business experts believe mass production became possible only due to setting and following standards. Every time a company manufactures a batch of products, each product must be identical to the other following consistent quality standards. It is critical from the perspective of creating value, reducing cost, offering quality goods, safety, compatibility, and minimizing losses and malfunction. All such aspects fulfill the purpose of standardization.

It indicates a common agreement discussed and approved by most stakeholders involved in a particular industry or organization. It means that they will follow the set guidelines. In addition, there can be globally accepted standards and standards specific to organizations.

In certain cases, companies must follow standards based on the country or industry in which they operate. Regarding business or product standardization, the core principles followed are openness, transparency, impartiality, efficiency, relevance, consensus, and consistency. Irrespective of the nature and size of the product, these principles are popular worldwide.

The standardization process involves the following stages:

• Selection: This stage involves choosing or defining the standards.
• Codification: This stage involves codifying the standards selected for the people or stakeholders involved to follow.
• Elaboration: It is the extension or improvisation of standards for implementation in new domains.
• Acceptance: It involves the acceptance of selected standards by strictly following, promoting, and establishing them.

Let's look into some examples of standardization:

Example #1

Wesley opens a shoe-making company. He observes that there is no uniformity in the quality of the shoe pairs between different batches. So Wesley decides to call a meeting with all his workers involved in the design and production. After much discussion and research, they set quality standards, design guidelines, etc., for manual and semi-mechanized processes.

The workers should follow and adhere to it to bring consistency in the process and the end product. After initiating it, Wesley can observe that the whole workspace runs smoothly, and the manufactured shoes are coming of consistent quality and standard.

Example #2

When hiring students, using and comparing the outcomes of a single competitive exam is a standard approach to evaluate applicants from different education systems or school systems around the world. Standardization tests are well-designed assessments with consistent scoring, administration, and analysis.

A test based on standards is created so that every applicant who takes it will experience the identical questions, testing settings, scoring procedures, and interpretations of the test results.

• It helps bring a smooth workflow, improves end product quality, and focuses on consistency.
• Business standards can help innovation and act quickly in changing environment.
• Companies apply it to study their competitors and develop continuous improvement in their final deliverance.
• One of the major effects that customers experience is consistency in products, interoperability, and compatibility.
• It brings technological advancement whenever necessary to procure better services and gain a new competitive advantage in the market.
• One of the key effects of it associated with mass production is the strict adherence to protocols and defined systems.
• If not given attention, it can affect the quality and reduces healthy competition.

This has been a guide to Standardization and its definition. Here, we explain its process, effects, methods, test, and examples. You may learn more from the following articles –

• Manufacturing vs Production
• Competitive Market
• Cost Management