Procurement Glossary
Degree of standardization: measurement and control of standardization in Procurement
November 19, 2025
The degree of standardization measures how uniformly processes, materials or suppliers are designed in procurement. This key figure helps purchasing organizations to reduce complexity, cut costs and increase efficiency. Find out below what the degree of standardization means, what methods exist for measuring it and how you can use this KPI strategically.
Key Facts
- Key figure for measuring the standardization of materials, processes or suppliers
- Usually calculated as a percentage of the total number of standardized elements
- Greater standardization leads to cost savings and reduced complexity costs
- Balancing act between efficiency through standardization and flexibility for special requirements
- Important control parameter for strategic procurement decisions
Contents
Definition: Degree of standardization
The degree of standardization quantifies the extent of standardization in various areas of procurement.
Basic concepts
The degree of standardization systematically records how many elements of a defined area are designed according to uniform specifications. This includes both tangible aspects such as product specifications and intangible factors such as process flows. The measurement is typically based on the ratio of standardized to non-standardized elements.
- Material standardization: standardization of product specifications and material classification
- Process standardization: Uniform processes in procurement and logistics
- Supplier standardization: Reduction of the supplier base to qualified partners
Degree of standardization vs. individualization
In contrast to complete individualization, standardization strives for uniformity while at the same time meeting demand. While individualization offers maximum flexibility, standardization enables economies of scale and cost savings. The optimum degree of standardization balances both aspects in line with the corporate strategy.
Importance in Procurement
For purchasing organizations, the degree of standardization is a key lever for reducing complexity and optimizing costs. Systematic spend analytics can be used to identify areas with standardization potential. The key figure supports strategic decisions on supplier consolidation and product portfolio optimization.
Methods and procedures
Various approaches make it possible to systematically measure and control the degree of standardization in procurement.
Quantitative measurement methods
The degree of standardization is calculated using mathematical ratios of standardized to total elements. Typical formulas take into account the number, volume or value of the objects under consideration. Data quality KPIs support the data quality for precise measurements.
- Number-based calculation: (standardized items / total items) × 100
- Volume-based calculation: (Standardized purchase volume / total volume) × 100
- Value-based calculation: (value of standardized procurement / total procurement value) × 100
Categorization and classification
Systematic material group hierarchies form the basis for meaningful standardization measurements. Uniform classification systems such as UNSPSC or eCl@ss create a comparable database. The categorization enables differentiated considerations according to Categories or procurement categories.
Benchmarking and target definition
Industry comparisons and internal benchmarks define realistic target values for the degree of standardization. The definition of category-specific targets takes into account different standardization potentials. Regular reviews ensure continuous improvement and adaptation to changing market conditions.
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Key figures for controlling the degree of standardization
Specific key figures enable the systematic measurement, monitoring and control of standardization activities.
Primary standardization indicators
Basic KPIs measure the current degree of standardization in various dimensions. These KPIs form the basis for strategic decisions and target definitions. Spend cube analyses support the multidimensional view of standardization levels.
- Degree of material standardization: proportion of standardized items in the overall product range
- Degree of supplier standardization: focus on strategic suppliers
- Degree of process standardization: proportion of standardized procurement processes
Efficiency and cost ratios
Secondary KPIs evaluate the impact of standardization measures on costs and efficiency. These KPIs quantify the benefits of standardization investments and justify further measures. Regular measurements reveal potential for improvement and optimization opportunities.
Quality and risk indicators
Supplementary metrics monitor quality aspects and risks of standardization. Data quality scores ensure the reliability of the key figures. These KPIs warn against excessive standardization and support balanced strategies between efficiency and flexibility.
Risks, dependencies and countermeasures
Excessive standardization can lead to inflexibility and dependencies, which pose strategic risks for procurement.
Supplier dependencies
High standardization concentrates procurement volumes on a small number of suppliers and increases dependency risks. Supplier failures can have more serious consequences with standardized products than with diversified procurement strategies. Supplier management must therefore pay greater attention to risk assessment and continuity planning.
- Development of backup suppliers for critical standardized materials
- Regular risk assessment of the supplier base
- Building up strategic inventories with high dependencies
Innovation inhibition
Strict standardization can hinder innovation and delay technological developments. Rigid standards may prevent the adoption of new technologies or improved materials. Balanced approaches must create room for innovation and continuous improvement.
Data quality risks
Insufficient data quality leads to incorrect degrees of standardization and wrong strategic decisions. Inconsistent classifications or outdated master data significantly distort measurements. Systematic data cleansing and continuous data maintenance are therefore essential.
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Practical example
An automotive manufacturer analyses its level of standardization for fasteners and identifies 2,400 different types of screws with only 180 variants actually required. Through systematic consolidation, the company reduces the number to 200 standard types and achieves a degree of standardization of 85%. The measure cuts procurement costs by 15% and reduces inventories by 30%.
- Data analysis identifies consolidation potential
- Technical assessment defines minimum requirements
- Step-by-step implementation minimizes business interruptions
- Continuous monitoring prevents renewed diversification
Trends & developments relating to the degree of standardization
Digital transformation and artificial intelligence are fundamentally changing the measurement and control of standardization levels.
AI-supported standardization
Artificial intelligence automates the identification of standardization potential through pattern recognition in large amounts of data. Machine learning algorithms analyze procurement data and automatically suggest consolidation options. Automatic spend classification significantly accelerates the categorization and evaluation of materials.
Digital twins and simulation
Digital images of the procurement landscape enable simulations of various standardization scenarios. Companies can evaluate the effects of standardization measures in advance and develop optimal strategies. Supply chain mapping visualizes complex supplier networks and dependencies.
Sustainability-oriented standardization
Environmental and social standards are increasingly being integrated into standardization strategies. Sustainability criteria influence the selection of standardized materials and suppliers. This development requires extended evaluation criteria and new key figures to measure sustainable standardization.
Conclusion
The degree of standardization is a key control parameter for efficient procurement organizations that reduces complexity and enables cost savings. Successful implementation requires systematic data analysis, balanced target definition and continuous monitoring. Modern technologies such as AI-supported analysis significantly expand the possibilities for optimization. The key lies in the balance between standardization and the necessary flexibility for strategic competitive advantages.
FAQ
What is the optimum degree of standardization?
The optimal degree of standardization varies depending on the industry, company size and strategic goals. Typical values are between 60-80% for materials and 70-90% for processes. The decisive factor is the balance between cost savings through standardization and the necessary flexibility for special requirements.
How is the degree of standardization calculated?
The calculation is made as a ratio of standardized to total elements, multiplied by 100 for the percentage. Depending on the focus, the number, volume or value can serve as the basis for calculation. A consistent methodology and clear definition of standardized elements is important.
Which areas are suitable for standardization?
Areas with high volumes, low complexity and standardized requirements are particularly suitable. C-parts, office supplies and standard components often offer great potential. Critical or highly specific materials, on the other hand, require a more differentiated approach to standardization options.
How do you prevent over-standardization?
Regular reviews of the standardization strategy and consideration of innovation requirements prevent over-standardization. Flexible exceptions and continuous market observation enable adjustments to be made. It is important to strike a balance between efficiency and strategic flexibility for future developments.
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