Complexity management
Complexity management has developed into a key driver for reducing costs and enhancing operating performance in many industries. Large product portfolios, service differentiation and globalizing supply chains often drive complexity.
In brief
Reducing complexity in the product portfolio and key processes has become a major competitive factor for ensuring supply chain performance and exceeding customer expectations. For this reason, best-in-class players have developed strategic approaches to mastering complexity, which they then use to create a sustainable competitive advantage.
Given that an increasing share of work is outsourced in many industries, the challenge of handling complexity has become all the more demanding. Companies that do not master complexity risk experiencing supply chain inefficiencies, resulting in non-competitive working capital structures, lower transparency of cost drivers and difficulties in achieving service levels. Ultimately, this leads to lower profits.
Our approach
Roland Berger has developed effective complexity management solutions for many clients in the process and engineered products industries. Our approach is typically based on three steps:
- Complexity audit: First, we carry out a focused and framework-based complexity audit. We map variants and processes across portfolios and throughout key processes. The audit identifies all key complexity drivers and their impact.
- Complexity reduction levers: Based on the audit, critical areas of action are identified and prioritized. We next define actions to reduce product and process complexity and use a set of tried-and-tested tools, such as variant trees, to reduce product proliferation. Finally, we evaluate the benefits of complexity reduction and investment needs in a business case.
- Implementation: The implementation process is launched based on structured action plans. For large projects, all actions are managed using the web-based RBpoint action-tracking tool to ensure efficient implementation.
Our approach not only aims to reduce existing complexity, but it also puts the company in a position to manage any future complexity. For this reason, we also develop and implement enablers such as comprehensive commodity codes and tools for tracking complexity drivers.
Sample projects
Complexity Management in R&D
We supported a leading global automotive OEM in diagnosing and developing a model of its product development process. The concept was based on a common global commodity code and on streamlining global engineering processes. It led to shorter development times and lower costs, and improved process quality and supplier integration.
Complexity Management in production
We conducted a comprehensive audit of a leading steel supplier's product and order portfolio, and reduced complexity with regard to dimensions and specifications. This led to a 22% reduction of complexity costs. In addition, service levels were improved and stock levels reduced by 10%.
Complexity Management in SCM
We helped a leading global machinery provider streamline its product and order portfolio. We also applied modular approaches in product development, clarifying make-or-buy in production and integrating global processes throughout the supply chain. To achieve sustainability, we established improved communication and common tools/databases between sites and KPIs.
