This document discusses complexity in products, services, processes, and organizational structures. It notes that complexity can increase costs through continued innovation and product development. Companies can reduce complexity costs through customer segmentation to better target potential customers. The optimal level of variety and innovation balances customer satisfaction and operating complexity. Streamlining offerings, roles, and processes can significantly reduce costs while improving market share and profits. Complex decision-making structures and processes also drive up costs over time if not properly managed.
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This document discusses complexity in products, services, processes, and organizational structures. It notes that complexity can increase costs through continued innovation and product development. Companies can reduce complexity costs through customer segmentation to better target potential customers. The optimal level of variety and innovation balances customer satisfaction and operating complexity. Streamlining offerings, roles, and processes can significantly reduce costs while improving market share and profits. Complex decision-making structures and processes also drive up costs over time if not properly managed.
This document discusses complexity in products, services, processes, and organizational structures. It notes that complexity can increase costs through continued innovation and product development. Companies can reduce complexity costs through customer segmentation to better target potential customers. The optimal level of variety and innovation balances customer satisfaction and operating complexity. Streamlining offerings, roles, and processes can significantly reduce costs while improving market share and profits. Complex decision-making structures and processes also drive up costs over time if not properly managed.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPTX, PDF, TXT or read online from Scribd
This document discusses complexity in products, services, processes, and organizational structures. It notes that complexity can increase costs through continued innovation and product development. Companies can reduce complexity costs through customer segmentation to better target potential customers. The optimal level of variety and innovation balances customer satisfaction and operating complexity. Streamlining offerings, roles, and processes can significantly reduce costs while improving market share and profits. Complex decision-making structures and processes also drive up costs over time if not properly managed.
Copyright:
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Q4.
Forth Principle Simpliycity gets results. Q:- How complex are your product or service offerings, and what is the degree of complexity costing you?
• Ans :- • Product portfolios are exploding, processes and systems are proliferating, and organizational structures increasingly , which creats complexity. • example – IT companies provide innovative software and hardware . Software Like linex , windows-7. etc • Complexity cost:- • Continue innovation in product and services incur cost , such type of cost are called complexity cost. • To reduce the cost complexity:- • cost complexity test is necessary; In which the most beneficial tool is customer segmentation. • Company do segmentation to target the potential customer to satisfy their wants. Q:- Where is your innovation fulcrum?
• Ans:- Innovation fulcrum is the point at which
the company provides variety of products or services for maximizing the sales and profits. • It includes right balance between customer satisfaction and operating complexity. • Company should know what customer want now and what in the future. • It use to judgmental tool to know what level of variety is appropriate for the market place. • Example:- In 2004 the CEO of the East coast wealth management company took step to reduce the complexity. • He sold most of the acquisition, reduce the number of service offerings , and streamline internal roles and process. • These and other moves allowed him to take out some $600 million in cost, reduce commission , gain market Share , and increase the firm’s operating income by 3%. Q:- What are the few critical ways your products stand out in customer’s minds? • Quality • Price • Customer service • Innovations Q:- How complex is your decision making and organization relative to competitors Ans:- Decision making procedures and organizations grow complex over time as well. • RAPID ( in loose acronyms; Recommended, Agree, give Input and Perform, or Implement the Decision) “Paul Rogers and Mercia Blenko”. • It is the tool which allows manager to asses decision making bottlenecks, assign clear decision role to indivisual in the organization, and hold them accountable. • Spans-and-layers analysis: It is the another tool which shows the number of levels in the organixation from CEO to the frontline worker, and number of people reporting up to each level. • Spans that are too narrow – few people report to individuals bosses. • Leads to excess overloads costs, slow decision making. • Sizing up the company’s decision making:- turn to suppliers, distributers, and customers for feedback. They are often good judges which give the true and quick information. Q:- What is the impact of the of this complexity?
Ans:- • Impact: • Increasing in the cost: over all cost will increase. • Take long time to decision making: • Performance of the employ will decrease. Q:- Where does complexity reside in your processes? Ans:- • Process complexity can shows in the following areas:- • On the production floor. • In distribution networks. • In interaction with customers. • In back office procedures. Q:- What is that costing you?
Ans:- • Money is being spent in the production and distribution processes. • It includes:- direct material direct labour Overhead Thank You
