Harnessing Product Complexity: Step 2—Measuring and Evaluating Complexity Levels

Nihal Orfi, Janis Terpenny and Asli Sahin-Sariisik

The Engineering Economist, 2012, vol. 57, issue 3, 178-191

Abstract: In today's market, companies are forced to balance the requirements of sales growth through increased product complexity against the requirements of cost control and operational efficiency. Therefore, how to meet the increasing needs of customers while managing the impact of product complexity becomes a great challenge for a company to gain competitive advantage. Although some have tackled the issue of product complexity, it still remains a theoretical concept. There is yet no generalized approach to identify complexity sources, measure complexity levels, and manage its impact throughout the different stages of the product's lifecycle. Our work seeks to help formulate strategies to manage the cost impacts of product complexity. This article builds on prior work that identified sources and indicators of product complexity, categorized them into five dimensions, and linked the indicators to direct and indirect costs. Now, we develop a product complexity measurement framework as a second step in establishing the overall methodology and support tool. The article also describes the application of the developed framework to existing product lines.

Date: 2012
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DOI: 10.1080/0013791X.2012.702197

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