With the advent of manufacturing 4.0 and mass customization, products have become highly complex. Managing such complexity using spreadsheets and emails is not pragmatic and prone to many issues from transparency to accuracy.
Product designers and managers today have many moving parts to consider. They require practical, but robust tools to gain valuable insight to guide their product management. Deciding what NOT to do (or what features and products NOT to release) is just as important as choosing what TO do.
How can product managers get to no or yes? How can they contend with product complexity?
Let’s delve into:
Whenever new products or product variants are added, there is an increase in complexity that can impact production schedules, inventory management, supplier networks, and the overall supply chain. More options mean more parts that need to be designed, developed, and managed to support all of the variants.
Unfortunately, the actual costs are not easily quantifiable as they "hide" among all the stages of product development, such as increased overhead, or slowed production. Attempting to offer products or configurations without adequately weighing them can negatively impact your customers and profitability.
According to a recent research report, “if setup times are significant, the effect of product variety on cost is substantially greater than that suggested by the risk-pooling literature for perfectly flexible manufacturing processes, where the cost increases proportionally to the square root of product variety.” Basically, it’s more than you think.
Management consultants Bain & Company indicate that there are three types of complexity: product complexity, organizational complexity, and process complexity. They claim that companies that focus on product complexity first do well in improving overall. They say "Unfortunately, most companies usually begin with processes, often through efforts such as 'lean Six Sigma'. Typically the emphasis is on how to execute all their current operations faster and with fewer resources. But that's actually the wrong place to start."
The reason focusing on product complexity first is that complex processes correlate highly to unnecessary configurations.
Harvard Business Review notes that the more potentially value-generating innovations you add to your company’s product portfolio, the more value-destroying complexity you are likely to embed in your business."
A case study by the Supply Chain Shaman shows how Corelle Brands, LLC (formerly World Kitchen), tackled complexity in the face of a pending bankruptcy. In 2002 they implemented a volume and profitability rating system to evaluate and cull product complexity.
Wharton University of Pennsylvania highlights that “Complexity accumulates over time...The problem is that clutter is not free. It interferes with operational efficiency, with production efficiency, with a clear image, and with distribution. It can strangle a company.”
In the chart below, it is easy to see just how quickly adding a few features leads to an exponential amount of possible combinations. These are combinations that would need to be manufactured, stored, and marketed. Product managers only want as many combinations produced, as the market research indicates will be purchased!
To evaluate complexity against the potential value it can bring, you need to thoroughly analyze how likely the product or feature is going to attract the target audience, impact your business, and comply with regulations.
Specific factors to consider include:
All too often, companies overestimate how valuable new features and proposed new products will be. In our article Tapping Into Customer Needs When Product Planning, we outline how important it is to understand your target audience and to take advantage of market and industry research. As much as possible, you want real buyers interacting with the product or feature. You need this feedback so you can either not proceed or proceed intelligently with buyer feedback.
Product complexity is multi-dimensional. Consumer wants and needs, financial perspectives, and productivity capabilities need to be considered when weighing the amount of configurations to be produced. But some successful money-saving examples to consider include:
In the book Waging War On Complexity, the author isolates the three complexity issues product manufacturers must contend with: Product Complexity, Process Complexity, and Organizational Complexity. In terms of the responsibilities facing product planners, product line managers, and etc., product complexity is where their attention should focus.
Although it should be noted, if a product manager defines a product efficiently, it in turn helps improve upon some of the process and organizational complexities.
Improved product complexity can impact process and organizational complexities in such ways as:
Complexity impacts how competitive a product will be and gives product managers better oversight when errors occur. A system that can help manage all the configurations and present clear, traceable, and controllable information is invaluable. Product managers cannot even consider all the variants of most products. Some of the biggest manufacturers in the world cannot tell you how many buildable combinations just one of their product lines may have.
There are, of course, companies out there that still rely on a myriad of spreadsheet data, emails, and silos of information points across a product's development stages. However, there are far more sophisticated software and platforms available now to 1) reconcile data into one shared digital space, and 2) assist with weighing ALL the data points.
Simply put, product managers need smart, simple tools. If you are with a large company, you may be able to weather a product flop, but there are still consequences. If you are with a smaller company, a flop can spell the end. And in either scenario, if you have not adequately valued products and features, you may leave too much room for competition who will take your ideas, make some small improvements or modifications, and quickly swallow up market share.
Product managers who rely on analyzing samplings of the data are going to increasingly lose to competitors who are taking advantage of such analytical software.
A shared platform helps product managers:
And, buyer beware: not all tools and analysis methodologies are created equal. Some platforms help manage processes but do not enable you to weigh all the combinations accurately and holistically. Look for a system that allows you to bring together all of the disparate data sets; conjoint analysis results, competition, engineering/ design constraints, financial restrictions, market expectations, legal requirements, etc. This will enable you to bring the best product to market.
Gocious offers a product planning suite for product planners and manufacturers, giving insight into product lines using weighted scoring and simple modeling, unlike anything currently on the software market. Our solution is available through a cloud-based subscription platform.
We start at the beginning, from the moment a product’s features and capabilities are first defined, and the market’s needs are gathered from users and customers. We merge product definitions from engineers, designers, and marketers with requirements, rules, and constraints.
Gocious provides support for the entire product life cycle, from product launch to end-of-life requirements. From cars to smartphones, we help organizations and teams decide with certainty which product features matter most to customers within the constraints of the business and marketplace.