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Product Complexity

Products are getting more and more complex, and in the process have become able to perform some really clever functions, often at a relatively low price. But is product complexity always a good thing?

Different Types of Product Complexity

Barclay, Dann & Holroyd studied some aspects of product complexity in their paper 'New-product-development performance evaluation: a product-complexity-based methodology'  and their book 'New Product Development, both published in 2000, building on work done by Clark & Fujimoto in 1991 published in 'Product Development Performance'.

Structural Complexity

This is the complexity of internal product structure, which could be broken down into:-
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Number of elements (part no. count; parts and assemblies)
bulletNote – New parts count more than carry-over ones
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Degree of connectivity
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Degree of non-linearity
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Number of technologies
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Level of technological difficulty
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Level of supporting technologies, e.g. manufacturing & test

Functional Complexity

This is the complexity of product user interface, which could be broken down into:-
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Degree of ambiguity of customer needs
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Degree of tightness of performance criteria
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Number of Performance criteria
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Importance of intangible functions, e.g. appearance, style, taste etc.

Clark & Fujimoto's chart of Structural v Functional Complexity looks like this

With time products tend to get more complex along both axes

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More variants to seek out other customers

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More complexity as the market matures

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Or both

This leads to

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Increasing need for integrating activities

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Increasing influence on the NPD process (more structure needed)

Other aspects of complexity are

In Engineering

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More new parts mean more engineering man hours to design and test.

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More interfaces mean more complicated systems, leading potentially to ‘emergentproperties’ and non-linear responses.

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This means a more complicated and riskier development programme.

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This requires a systems engineering approach run by an experienced project management using advanced adaptive techniques.

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New technologies create even more difficulties.

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They may be poorly understood, even by ‘experts’, especially in terms of production costs and technical risks.

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The company may not have the resources to cope, e.g. engineers, test equipment etc.

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This may lead to recruiting specialists and/or using outside contractors, both of which bring in further levels of complexity and risk.

See Stacey's Complexity Matrix

In Operations

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A larger parts count and more variants typically mean increased cost in operations; more suppliers, increased stores space required, more complex manufacturing, more complexity for sales, service and marketing.

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Suppliers, manufacturing, sales, service and marketing (and customers) may all struggle to adapt to the requirements of new technologies.

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The margin per product may go down, due to increased cost from more parts or new technology in the products and some variants achieving poor sales numbers.

Rationalisation

Rationalisation is then required to reduce the complexity, by getting rid of complex, low margin products.

The low margin, low sales volume complex products, often variants for a small market should be culled and possibly be replaced by a higher margin product, unless they are of strategic importance.

The high margin products should be kept

The others should be reviewed to see what should be done with them., e.g. can they be rationalised or have their costs reduced. Some may be kept because of their strategic importance or growth potential.

 

 

 

 

 

 

 

 

 

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