How do you measure the benefits of material standardization and simplification?

Key metrics that can be achieved by Standardizing and Simplifying are; Cost reduction: Increasing the amount you order from fewer suppliers results in volume pricing. Supply Chain management: Reducing the number of Vendors allows effective management. Reliability: Reducing the variety of sources allows focus on Quality. Vendor partnering: Partnerships with key suppliers who understand their importance, and who are rewarded with higher steady order volume produce reliable partners who assist not only on day-to-day purchases, but in crisis situations. Emergency stock: Reduction of suppliers allows key vendors to hold Safety Stock at no charge, in the event of unexpected shortages, global supply issues, or sudden order increases.

Less inventory and higher turn times and on time delivery. The fewer part numbers contributes to the bottom line. Less of everything.

Research Materials that are common across the organization. What are the average quantities, volume of usage and storage capacities per locations? Designate a team to research this for a few high volume Materials to start negotiating bulk purchases. Utilize scheduling agreement commonly used in SAP to address storage capacities per locations. I would set up safety stock for the first few months after activation to prevent production issues. This is what im thinking off the top of my head. Caution this contribution was made prior to my first cup of coffee

First, cost reduction is essential, as standardized materials often lead to bulk purchasing discounts and lower production costs. Second, efficiency improvements can be quantified by reduced lead times and streamlined inventory processes, enabling faster response to demand. Third, quality consistency is crucial; simplified materials tend to result in fewer defects and more reliable product performance. Fourth, easier training for staff can be assessed by tracking onboarding times and error rates. Lastly, sustainability metrics can be evaluated, as standardization often leads to reduced waste and optimized resource use, aligning with corporate social responsibility goals.

These are valid steps to implement change, in this case standardization and simplification. I'd likento add that leadership support is the number one key to success in change management. Without their buy-in, you will never reach 100% adoption.

How do you quantify savings with standardization and simplification projects? It's simple to compare PPV, but what about reduced inventory carrying costs and TCO reductions? What are best practices when calculating standardization and simplification savings?