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Material Specification, Codification, and Standardization

Part of the Springer Texts in Business and Economics book series (STBE)

Abstract

This chapter addresses a very important strategic intervention required in organizations to reduce inventory and related costs through codification, standardization, simplification, and variety reduction. Codification should become a starting point of this initiative. A material identification code uniquely encapsulates relevant key information about a particular item in 7–10 digits using numerals or alphanumeric codes. Codification may reveal excess variety and will facilitate interdepartmental communication and will lead to standardization. Simplification and variety reduction are direct derivatives of codification and standardization. Huge amount of inventories can be saved through product simplification and variety reduction. In case 100 different parts can be standardized into 1, then only 10 % inventory is required. Even modest goal of reducing variety from 2 to 1 can cut down inventory (and cost) by 30 %.

Keywords

  • Strategic intervention
  • Standardization
  • Material identification code
  • Interdepartmental communication
  • Simplification
  • Variety reduction
  • Codification

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  • DOI: 10.1007/978-81-322-1970-5_12
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References

  • Dobler DW, Lee L Jr, Burt DN (1984) Purchasing and materials management: text and cases. The Southeast Book Company (With Special Arrangement With McGraw Hill International Book Co.), Taiwan

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  • Gopalakrishnan P, Sundaresan M (1979) Materials management: an integrated approach. Prentice Hall of India, New Delhi

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© 2014 Springer India

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Vrat, P. (2014). Material Specification, Codification, and Standardization. In: Materials Management. Springer Texts in Business and Economics. Springer, New Delhi. https://doi.org/10.1007/978-81-322-1970-5_12

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