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Accounting Best Practices, Fifth Edition by Steven M. Bragg Englewood, Colorado

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16–45. Standardize Parts

Though one can certainly use the steps just noted in the “Eliminate Redundant Part Numbers” best practice to reduce the number of items in the inventory, this still does not eliminate those similar, but still slightly different, parts designed to be used in different products. The engineering department has probably created a series of products without regard to the components used in preceding designs, so fittings, fasteners, and other items are used in slightly varying sizes across a range of products. The result is an ever-growing list of components, each one varying just enough from other items to require separate stocking.

A long-term solution is to standardize parts across multiple products, thereby greatly reducing the number of items in stock. The key ingredient in this best practice is to require approval of all new components by the engineering manager, whose performance is judged partially on his or her ability to keep the number of parts at a minimum. By requiring engineers to go through a tough review before being allowed to use new parts, they will be much more inclined to design existing stocks into new designs. A useful tool in the identification of commonly used parts is the matrix bill of material; this format displays the components of similar products in a side-by-side format, so that visual comparisons can be more easily made.

The concept ...

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