SIMPLIFIED PRACTICE OR SIMPLIFICATION Another branch of standardization is the commercial elimina tion of unnecessary variety in sizes, dimensions, grades or qualities of common commodities. Its chief purpose is to reduce the eco nomic waste resulting from the production and distribution of too many varieties of the same general class of goods. The wastes of over-diversification are unduly large inventories, increased cost to carry them, slower turnover, idle investment, heavy obsolescence and decreased profits. Advantages gained through simplification, by the manufacturer are decreased production costs and selling expenses, smaller inventories, faster turnover and consequently improved profits. Distributors likewise are enabled, through sim plification, to reduce their inventories to the lines that sell well and thus to secure speedier turnover and better profits. Con sumers benefit from simplification through lower prices, improve ments in quality of product and in the service of supply.
Analyses of many different lines of products have shown to the U.S. department of commerce that usually 8o% of the year's total business in any line of products is done in 2o% of the varieties in which that line is offered. The remaining 8o%, produc ing only 2o% of the year's business, usually provides a fertile field for simplification.
During the World War, the United States organized its war industries board which, among other responsibilities, was charged with the restriction of production of non-essential goods, in order to divert to war purposes the material and labour represented in those goods. The conservation division of the board applied sim known industrial and management engineers to make a survey of waste in industry. The committee studied six major industries and found wastes ranging from 29% in the metal trades to 64% in the manufacture of men's ready-made clothing. Avoidable waste, according to the committee's evaluation, amounted to 41% in boot and shoe manufacture, 49% in the textile, 53% in the building and 58% in the printing industry. Among the outstanding causes for waste in these fields was the unnecessarily great variety in sizes, etc. The committee therefore suggested that the Federal Government call together representatives of trade associations in inter-dependent industries and form committees to effect simplifications in their commodities. (See Waste in Industry, McGraw-Hill Book Co., 1922.) When Hoover became secretary of commerce he was requested by many business leaders to assist industries to apply simplifica tion. Accordingly, he organized the division of simplified prac
tice. In Nov. 1921, varieties of vitrified paving-brick were reduced from 66 to I1, which constituted the bulk of the output.
A general conference of brick producers, highway engineers, and officials agreed thereafter to concentrate on the I I most popu lar sizes. In March 1922, a second conference reduced the num ber to 7; in Jan. 1928, only 5 varieties were listed. (See Trade Association Activities, Domestic Commerce series no. 20, U.S. department of commerce, 1927.) Meantime, simplification through group co-operation has been applied to 8o other commodities, with elimination of superfluous variety ranging from 25% in some instances to 99% in others, as shown in part in the following tables:— plification to more than 30o commodity lines with enormous sav ings to industry. (See B. M. Baruch, American Industry in the War, U.S. Government Printing Office, 1922.) After the war, many of the industries which had participated in the Govern ment's programme and had benefited by simplification, wishing to continue this waste-elimination programme, turned to the U.S. Chamber of Commerce.
Early in 1921, Herbert Hoover, then president of the American Engineering council (the executive body of the Federated Ameri can Engineering Societies), organized a committee of 17 well One manufacturer of electrical apparatus eliminated 49% of the items in his stocks. An important Western road reduced its stores, releasing $18,000,000 of otherwise idle investment.
A shoe manufacturer making 3 grades of shoes in 2,500 styles cut his varieties to one grade of ioo styles, thereby reduc ing his production cost 31%, direct overhead 28%, inventories 26% and cost to consumer 27%. This enabled him to increase his turnover 50% ; women's shoes 22%; and men's 8o%.
Simplification, now widely recognized in America, is also being studied, and to some extent applied, by business interests in other countries. Many economists regard the increasing application of simplification as a significant factor in the advancing standard of living, since the savings it yields are passed on to the ultimate consumer in higher wages and lower prices.
Management's Handbook, Sect. 17, P. 989-1034 (1924) ; U.S. Bureau of Standards, Standards Year Book (1927) ; Amer. Soc. of Mech. Eng., Bibliography of Management Lit erature, p. 58 (1927) U.S. department of commerce, Simplified Practice it Is and What it Offers. (R. M. H.)