Product Complexity Management

The dynamics of market requirements and rapid technological developments lead to a constant increase in product complexity in growing companies, which is expressed in two forms:

  • the system complexity resulting from the technical interactions between the system elements of a product and
  • the complexity of variants from the multitude of different variants of a product.

Successful companies are characterised by the fact that they handle product complexity confidently and successfully by

  • master the systematic planning and design of intelligent product architectures,
  • successfully use the variety of variants via modular design, modularisation and platforms
  • and use variant management to manage the product portfolio holistically and across disciplines.

Intelligent product architectures:

The product architecture defines the functional structure of a product and thus forms the linchpin between customer requirements and technical solutions.

Successful companies use intelligent product architectures as central levers for designing the value chain: By defining the system elements and interfaces, they are able to open up targeted cooperation options with external partners (e.g. joint development). This can significantly reduce the system complexity to be controlled by a company.

Digitization (IoT) is increasing the importance of product architecture for the value chain, as many functional elements migrate from hardware to software and a large number of new functionalities are created (extensions of business models). In a value chain characterized by new players and power relationships, the product architecture can have a decisive influence on the positioning of a company.

Modular design, modularization and platforms:

The desire for customer-specific solutions is constantly driving up the number of variants. The resulting diversity of variants leads to economic success if it is possible to offer customer-related diversity to the outside world but not to allow it to penetrate the value chain internally through product design measures:

  • Internal standardization - external individuality
  • Stability in the structure - flexibility in combination

A key lever for implementing these guidelines lies in a high degree of standardization in areas that cannot be experienced by the customer. Modular structures, modularization and platform concepts make it possible both to create individually configurable end products and to exploit economies of scale. A clear assessment of the required variety of variants and the interactions between different modules of a product are therefore indispensable in order to define meaningful modular elements, interfaces and Standards.

With increasing digitization, the interaction of software and hardware platforms (smart products) plays a central role. Here it is necessary to design and control platforms that have different life cycles and typically overlap across several product groups.

The development of products on the basis of construction kits and platforms also presents challenges for process and organisational design in product development. The product development processes must be designed in such a way that the interaction of platform development and derivative development (product derivations) can be synchronized over the entire product life cycle. The coordination of hardware and software driven process elements (e.g. release management) is of particular importance here.

Closely related to this is the anchoring of platform responsibility in the organizational structure. Experience shows that managing the life cycle of platforms (e.g. phasing out old platforms and introducing new ones) decides whether the advantages of platform building can be used economically.

Variant management:

In many companies, the variety of variants has increased rapidly in recent years. This often results in a broad, extremely complex product range that is not profitable across the board. The first step for successful variant management is therefore the creation of transparency. We need to clarify this,

  • which variants are exotics that reduce overall profitability in the portfolio,
  • what the optimal product portfolio looks like,
  • how the variety of parts in production and assembly can be reduced and
  • the scope for profitability that will result from a streamlining of the product range.

A holistic approach focuses in particular on the identification of variant drivers and hidden cross-subsidised variants, the organisational aspects and the analysis of the costs induced by the diversity of variants.

ROI supports companies in the manufacturing industry in complexity management in the areas of product architectures, modular design and variant management with a comprehensive consulting portfolio: 

  • systematic product planning and intelligent product architectures
    • Optimization of product planning from market requirements to product roadmapping,
    • Development of system and product strategies up to technical implementation specifications,
    • Networking of products and processes through Industry 4.0/IoT technologies,
    • Product portfolio streamlining and end-of-life product strategies,
    • Integration of release management of applications and software,
  • modular design and modularization
    • Development of a modular or platform concept by defining physical modules, component variance and interfaces and anchoring them in business processes,
    • Identification of critical components and process steps along the value chain,
    • Analysis of product diversity and economic potential evaluation of building sets,
    • Dimensioning of identical parts and carry-over parts,
  • variant management
    • Identification of variant drivers and complexity sources,
    • Strategic variant planning and design of variant cleansing programs,
    • variant-oriented development management,
    • Variant calculation and controlling,
    • Implementation of product configurators and standardization of system interfaces.

Case Study

Frau an einer computergesteuerten Medikamentenausgabe

Product Lifecycle Optimization – A formula for efficiency

A shining success typically also has its drawbacks. This was the experience of a pharmaceutical group that had reached the top of its industry with an extensive portfolio of hospital and pharmaceutical products. But after experiencing growth on a global scale within its heavily decentralized organization and delivering strong balance sheets, over the years the company lost sight of key areas like structures and process Standards. With the help of ROI, the company responded quickly, and in just nine months drew up a specific plan of action for its worldwide Product Lifecycle Management (PLM) system.