complexity management


  • Effective complexity management is based on four pillars: alignment with the overall strategy of the company, transparency over all costs and benefits of complexity, identifying
    the optimization benefits, related measures and managing the trade-offs between parts of the total value chain (the totality of all the company’s activities), and sustainable infrastructure such as IT tools, incentives and processes.

  • Complexity management has recently been enabled by new technology, leading to detailed analysis and simulation of complexity, optimization measures, and their effects down
    the entire value chain.

  • Transparency[edit] Fact based transparency over the costs of complexity as well as its value is created along the entire value chain.

  • SKUs) • Markets/segments: number and type of market segments in the respective countries/regions served • Customer portfolio: number and variety of all customers served (including
    customer accounts and ship-to customers) • Material/components: Variety of raw materials, components and services used in value generation • IT systems: Variety and type of systems and applications • Organization: Company organization, structures
    and governance • Processes: Number and type of processes in the enterprise • Production/Supply chain: Production plants and network, manufacturing processes, asset base, distribution • Technologies: R&D platforms and project portfolio and
    product technologies involved Complexity in enterprises is driven by: • Market volatility: changing market conditions like raw material supply and sales volumes drive business process complexity • Fragmented customer demands drive product
    portfolio and feature complexity • Globalization drives complexity of served markets and company locations • Mergers & acquisitions drive complexity in all fields • Silo-oriented cultures drive complexity in organization, IT systems and business
    processes • Increasing customer pressure drives complexity in product portfolio and features Approach Constant complexity management can result in a significant profitability increase of an enterprise.

  • Total value chain[edit] Based on the defined strategy and the achieved transparency, the optimal complexity is identified for each of the fields within the enterprise.

  • [1] Reducing complexity requires subsequent activities around the four pillars: strategy, transparency, total value chain and sustainability.

  • At this time it becomes critical to actively manage the change and trade-offs between the value chain functions (such as R&D, procurement, manufacturing, logistics, and marketing
    & sales), so that the overall company-wide optimum can be achieved.

  • If complexity has an important role for the success of an enterprise it needs to be embedded in the corporate strategy.

  • Strategy[edit] The relevance of complexity for the success of a given business model is being evaluated.


Works Cited

[‘• Marti, Michael (2007), Complexity Management: Optimizing Product Architecture of Industrial Products, ISBN 3-8350-0866-8
• Blecker, Prof. Dr. Thorsten; Kersten, Prof. Dr. Wolfgang (2006), Complexity Management in Supply Chains, ISBN 978-3-503-09737-1
• Lindemann,
Udo; Maurer, Maik; Braun, Thomas, Structural Complexity Management: An Approach for the Field of Product Design, ISBN 978-3-540-87888-9
• Fonseca, Jose, Complexity & Innovation in Organizations, ISBN 978-0-415-25030-6
• Allen, P., Maguire, S.,
& McKelvey, B. (Eds.). (2011). The SAGE Handbook of Complexity and Management (1st ed.). London: SAGE.
1. ^ Chynoweth, Carly (13 March 2011). “How to avoid a tangled web”. Sunday Times. Archived from the original on March 14, 2012. Retrieved 22
March 2011.
2. ^ Disclosure overload and complexity hiding
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