Standardization

Reviewed by Komal | Updated on Sep 28, 2020

What is Standardisation?

Standardisation is a system of agreements that must be adhered to by all relevant parties in an industry or organisation to ensure that all processes associated with the production of a service's success are undertaken within the guidelines set out.

This ensures that the consistency of the final product is consistent and any conclusions drawn are comparable with all other similar products in the same class.

How Standardization Works?

Standardisation is accomplished by setting widely agreed guidelines on how to produce or help a product or service, as well as how to run a company or how the relevant procedures are regulated. The standardisation goal is to impose a degree of continuity or uniformity within the chosen community for such procedures or operations.

An example of standardisation will be the Generally Accepted Accounting Principles (GAAP), which are universally adhered to by all businesses listed on US stock exchanges. GAAP is a structured collection of the Financial Accounting Standards Board (FASB) standards designed to ensure that all financial statements follow the same procedures and that the information reported is accurate, credible, comparable and consistent.

Examples of Standardisation in Business

Standardisation can be seen in business operations as companies require a consistent quality standard. For example, many fast-food franchises have reported comprehensive processes to ensure a burger is cooked in the same manner regardless of which establishment a customer visits in its franchise.

Some production and manufacturing enterprises adhere to agency requirements to ensure that all goods in the same category are produced according to the same specifications between different facilities or businesses. The wood products sector, for example, is engaging in international standards to ensure the quality of similar products.

This may include links to suitable properties for product size, water-solubility, grading, and composite. These requirements ensure that when a person goes to a retail store to purchase an item, such as a two-by-four item, the sizing is consistent irrespective of the store being visited or the manufacturer being the product.

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