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Next Generation Product Complexity Management Are You Ready to Use Digitisation to Manage Product Variance? 2 Next Generation Product Complexity Management Contents

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Next Generation Product Complexity Management Are You Ready to Use Digitisation to Manage Product Variance? 2 Next Generation Product Complexity Management Contents Next Generation Product Complexity Management Are you ready to use digitisation to manage product variance? 2 Next Generation Product Complexity Management Contents Executive summary 4 Benefits of complexity management in the new digital world 5 Product complexity management has to involve the global value network 6 Leverage technology to control product complexity 9 Become world class with product analytics 14 Start today! 20 3 1. Executive summary Product architecture and platform manage- that product complexity is not managed By doing so, those organisations use ment are in many industries a proven agile enough to meet the mentioned PLM analytics tools to strive to perfection way to reduce product complexity in an business environment. in product architecture and platform effective and efficient way. Particularly in management. In our product complexity maturity study automotive and manufacturing it is the we focus on the dimensions of strategy, Within this point of view we want to outline core of the product strategy and therefore product, supply chain, production and the trends and challenges of manufac- a critical capability. technology. The key finding was that the turing companies in this field and also Leveraging carry-over parts, analysing existing IT tools and technologies are give a viewpoint on the possible levers to product data, managing the variants and merely used for organising the product address these and to optimise product restructuring the supply chain accordingly portfolio, but not for driving decision complexity management. Our approach is leads to a significant reduction of customer making in the field of product complexity easily understandable and addresses the lead time as well as product and engi- management. In order to create significant key obstacles to overcome. neering cost. However, product business value with the increasing product complexity management today faces data available, new approaches to multiple disruptive changes along the optimise and manage product complexity value chain, such as global manufacturing are possible. Companies that are “Insight- networks, growing competitive pressure, driven complexity optimisers” have already diverse local customer demands, rapid understood how to manage an integrated technological innovations and new product architecture that is operated with regulations. Customers expect person- established processes and governance alised products quick and locally available functions across the whole value chain. at any time with the expected quality. In addition they use analytical methods Global organisations are often not able to optimise their existing product portfolio to fulfill all of the demands with the same and new product developments in a degree maturity. One of the reasons is structured and insights-driven way. 4 Next Generation Product Complexity Management 2. Benefits of complexity management in the new digital world Organisations in every kind of industries Several companies already perform at a Global organisations could benefit are faced nowadays with an increasing high level in the field of product complexity tremendously through an integrated individualisation of customer requirements. management, especially in the automotive product architecture and platform To fulfil this expanding demand, compa- industry. The modular transverse matrix management in the fields of service, nies react by enlarging the number of platform of Volkswagen is only one quite production and engineering. Based on product variants. This automatically leads popular example. But today’s question our experience, a world class product to higher complexity, which the compa- is: to what extent do they consider current architecture and platform management is nies have to cope with. This becomes and upcoming industrial key challenges able to realise significant benefit effects. especially visible in the automotive and like sustainability, globally distributed manufacturing sector, but also exists for value creation networks, market volatility example in energy and utilities. Thus, and, most notably, the cross industry’s organisations need to learn, how to digitalisation with its cyber-physical manage the balancing act between production systems? While conventional fulfilling the market needs regarding complexity management is able to individual functionalities on the one hand manage product complexity locally quite and reducing internal complexity to save well, a new approach is necessary to costs and time on the other hand. also address the growing complexity and digitalisation of the value network. Up to -90% customer order lead time Up to Up to Seise digital opportunities -20% Reduced steering effort +40% Improved process efficiency process service costs Reduced idle and lead time efciency Reduced risks and quality costs Number of variants Process complexity Reduced supplier and sourcing costs Ability to serve global markets Up to Up to -30% -30% engineering product costs costs 5 3. Product complexity management has to involve the global value network Product complexity management is a an increased effort in material planning. During the product series conception challenge, which affects the whole value The goal of complexity management here rising complexity implies smaller and more chain and therefore needs a comprehen- is to structure the product requirements expensive purchased parts. Besides, sive solution approach. Companies and enforce a reuse of existing solutions. rising amount of components often leads continue to globalise and implement new to higher stocks and therefore rise in The same principle takes place in the variants of their products to spur growth. working capital. The vision of product design stage of the value creation. While As a result, the global value network complexity management in this phase is product complexity causes increasing R&D coordination, covering the idea to develop common architecture compo- costs and provokes development of new generation, requirement specification, nents to facilitate an integrated portfolio parts, product complexity management design, product series concept, sales, management across all product families takes care of early definition of carry-over realisation and assembly and after all and brands. parts and establishes maturity concepts operations and maintenance, is more and for components. Thereby, existing compo- A major negative effect of increasing more challenging and therefore drives nents can be easily identified and parts as product complexity in the sales phase is product complexity. well as subassemblies are prepared for the rising complexity of demand forecast Within the requirement specification reuse as much as possible in order to the large number of variants has led to reduce reinvention costs. Figure 1: Global distributed value creation network Fully integrated architecture and platform management and a standardised idea-to-market process Requirement Sales Realisation / Operations & Design Product Commercial SOP Idea specication series concept offer Assembly Maintenance © Capgemini Consulting 2015 6 Next Generation Product Complexity Management and cannibalisation of products and product complexity management has to of product complexity simplifies through brands in the different markets. Managed integrate the product view by all means standardisation of service processes and product complexity should simplify from engineering through manufacturing lowers the failure rate of parts, due to the demand forecast and could even ease to service in order to always have the reduced number of variants. the training needs of salesmen. With a right view of the product. Standardisation To address the requirements towards managed central sales configurator the of production processes is a consequent an integrated product complexity salesman and the engineering department benefit and eases the delivery of persona- management while keeping the has easy access to all data needed. They lised products locally at a reasonable price. value network performance high, can use it to describe and manage the Also operations and maintenance are a comprehensive, but flexible and market offering internally and externally to affected by rising product complexity. If technology-based solution approach significantly reduce interface problems as not managed well, effects can be higher across all stages of the value chain well as customer lead times. installation times or space requirements is needed. Further, increased product complexity than actually needed. In addition the causes small lot sizes and high tooling service technician has to know each part variety which complicates the realisation details of a load of variants. For opera- and assembly process. Therefore, tions and maintenance the management 7 8 Next Generation Product Complexity Management 4. Leverage technology to control product complexity The importance of the drivers for product Globalisation leads to a globally distrib- in sourcing, producing and delivering, but complexity will intensify rapidly in the next uted value creation network with new on the other hand also requires an increas- years. Strong internal and external influ- customers, especially from the emerging ingly complex and locally focused value ences will force organisations to improve markets. As we all spoke about global creation. their product management substantially. markets a lot in the past, this has now Another trend affecting the complexity of It is necessary to identify the
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