Harnessing Product Complexity: Step 1—Establishing Product Complexity Dimensions and Indicators

Nihal Orfi, Janis Terpenny and Asli Sahin-Sariisik

The Engineering Economist, 2011, vol. 56, issue 1, 59-79

Abstract: With today's level of market competition and demand for diverse product offerings, more companies are now pressured to increase product variety as a strategy to maintain and increase market share. In addition to its associated direct costs, variety is considered the main source of product complexity, which has been proven to negatively impact product development time, productivity, costs, and customer satisfaction. Although several researchers have tackled the issue, product complexity continues to be a theoretical concept with different definitions and measurements established based on research area, scope, and objective. This lack of a unified approach has made it difficult for companies to take full advantage of existing research to manage the impact of product complexity. This article introduces five main dimensions of product complexity based on identifying different complexity sources in product design, development, manufacturing, assembly, and supply chain, and on understanding the impact of these sources on different direct and indirect costs. Establishing the dimensions of product complexity is an essential first step in developing a unified product complexity metric to be used as a support tool to improve product design and systematically manage product complexity.

Date: 2011
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DOI: 10.1080/0013791X.2010.549935

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