Product Complexity Defination

Topics: Economics, Transaction cost, Complexity Pages: 5 (1639 words) Published: November 3, 2011
Product complexity definition
What product “complexity” means to supply chain and the industry? It can be define differently based on the industry and the market. A lot people think complexity is the same meaning with complicacy or simplicity. Unfortunely, both of the definition is wrong because complexity is something that interacts among each other and sub divide it in all its single elements and lead to the solution of the problems. “Complexity makes a supply chain inflexible and inefficient,” Hoole writes. “It also hampers on time delivery and creates problems for product quality.” From the manufacturing company stand point, it will cause complexity when the variety over the limit of the supply chain. For example, to serve the different types of logistics customer, better technologies to make the merchandise, the different types of the sales channel, handle different types of raw materials and components. Webster define complexity as 1a) the quality or state being composed of two or more separate or analyzable items, parts, constituents, or symbol. 2a) having many varied parts, or elements, and consequently hard to understand.2b) marked by involvement of many parts, aspects, and need earnest study or examination to understand it. Based on product design, it defines as proportional to the total number of design decision (Baldwin& Clark 2009). The number of functions designed into products (Griffin 1997a, 1997b), the numbers of components (Gupta&Krishnan 1999). Other than that, it defines as number of physical modules and by the degree of dependency (Kaski&Heikkila 2002). It also has three different definitions for the complex system like it is a system that mixes with the different parts in a complicated way and hard for the industry to understand. (Flood &Carson 1988). According to Klir(1985), a system manifesting differentiation and connectively.

Complexity is divided into 2 big categories multiplicity and relatedness into the products. A lot of times, product complexity only call as ceteris paribus and it means a product contain more components or more interrelationship among it elements. Product complexity is defined as assessment about the number of components in a product. Industrial purchasing process can affect by a multitude of complexities induced by the nature of purchased products, the organizational structure and the influences of the external environment. Other than that, product complexity is directly link to the supply chain operation management. Because of this, Jacob literature defines the complexity supply chain by the number of parts and degree of unpredictability, represents by three facts: the number of components, extend of interactions, and degree of product novelty. Besides that, represent by the numbers of modules and markets, it also clear in the different types of the suppliers and their interaction. Because of this, Jacob define the product complexity as a design of multiplicity, relatedness to others, and product architecture elements. Multiplicity is a unique category and relatedness has three different types like similarity, complementary, and inter-connectedness. Complementary is for economic sense of a product like mp3 player and music player (Jacob). Similarity is merchandise that sharing the same components, provide the same functions, and same benefit role of the products to the market. Other than that, According to Ulrich’s (2005), inter-connectedness is a kind of connection of interface such as slot, and sectional typology. It also includes the logical and mechanical connection between two elements. For example, it modified of old products through the similarity of the components and the function of the products. (Jacob)

Literature define Product portfolio complexity management as the combination of decisions, value systems, supporting process, and initiative pertaining to deciding and employing the most effective product portfolio like mix...
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