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A significant amount of complexity exists within the brand and product portfolios of PharmaCo. This complexity is driven by several factors: first, medical needs for differing products and dosages; second, marketing requests for new configurations of current product offerings; third, unique regulations and requirements for individual country markets; fourth, product portfolio growth from acquisition activity. This complexity increases both production costs and support costs (such as planning and procurement) for PharmaCo. The focus of this project is to reduce the complexity in the brand and SKU portfolios at PharmaCo. Two approaches can be utilized to reduce complexity in the product portfolio. First, measures can be taken to reduce already existing SKUs and brands. This has largely been the focus of previous efforts at PharmaCo, although additional work remains in this area. Previous analyses have focused on providing recommendations for pruning specific SKUs and divesting or pruning specific brands. Second, measures can be taken to manage the future proliferation of SKUs and brands in order to control future complexity growth. This approach has been largely unaddressed in previous internship projects and will be a major focus of the current project. It is first necessary to clearly understand all costs that are associated with complexity. Consequently, the first step of this project was to conduct site visits with multiple plants in order to learn all costs that are impacted by complexity. At these site visits, cross functional groups involved in all aspects of operations at the site were identified and consulted. Additionally, Marketing was contacted to understand complexity costs that affect Marketing. Both cost elements will be combined to develop a complexity cost model. This model is being piloted and applied to a stable brand that still has level or increasing volumes over the next several years.
Shed Revenue-Draining Complexity Costs by Thirty Percent! “This is an ambitious book packed with insight and fresh thinking. Separating good from bad complexity costs is a critical task facing companies today, and the authors provide a compelling roadmap for solving the problem.” Michael B. McCallister, President and CEO, Humana Inc. “Waging War on Complexity Costs examines an incredibly important and often overlooked aspect of business and organizations in general—regulators and government officials should read this book and take notice. Complexity dramatically increases costs and risk of failure. It is like a cancer that eats away at efficiency and profitability.” Andy Beal, Chairman and CEO, Beal Bank “This is by far the best and most useful explanation of how to address complexity in a business. Waging War on Complexity Costs frames the issue in a way that companies can finally tackle the problem—this book delivers.” Ahmad R. Chatila, CEO, MEMC Electronic Materials Inc. “This is the first book that really targets organizational complexity in a compelling way, making this a must-read for any organization that is looking to distance itself from the competition. After years of cost-cutting, many companies are realizing that they still don’t have a discernable cost advantage. This book provides the platform to achieve just that, by attacking the complexity that bogs them down.” Tom DiDonato, EVP Human Resources, American Eagle Outfitters, Inc. About the Book: Complexity costs are the single biggest determinant of your company’s cost competitiveness. For the past two decades the pursuit of growth has created massive complexity in processes, product portfolios, and organizations, adding costs that companies can ill afford. The only good news is that your competitors may be carrying as much complexity as you are. Learn how to eliminate this complexity, and you can create a tremendous cost advantage over your competition. In Waging War on Complexity Costs, Stephen Wilson and Andrei Perumal deliver a powerful and practical approach for reclaiming your cost advantage. This executive-level resource presents a wealth of insight and new research to definitively answer key questions such as: How can I quantify the cost of complexity without getting lost in a sea of data? Where are the biggest opportunities for reducing product, process, and organizational complexity, and how can I cut through the interdependencies that trap these costs? How can I see results quickly by taking targeted actions against key levers? How do I keep complexity costs at bay? It is not enough to attack bloated product portfolios. Substantive cost improvements require addressing the complexity in the underlying processes and organizational structures. Waging War on Complexity Costs provides a wealth of relevant case studies with examples from Kraft, Tesco, Fiat, and the U.S. Navy and highlights specific strategies for reducing costs by 15-30% in significant portions of your business. Tomorrow’s consumers are emerging as wellinformed customers who know what they want and the price they’re willing to pay for it. Complexity not only drives costs; it creates a barrier between you and the customer. Declare a war on complexity costs and prepare for profitable growth.
Product design is characterized by a steady increase in complexity. The main focus of this book is a structural approach on complexity management. This means, system structures are considered in order to address the challenge of complexity in all aspects of product design. Structures arise from the complex dependencies of system elements. Thus, the identification of system structures provides access to the understanding of system behavior in practical applications. The book presents a methodology that enables the analysis, control and optimization of complex structures, and the applicability of domain-spanning problems. The methodology allows significant improvements on handling system complexity by creating improved system understanding on the one hand and optimizing product design that is robust for system adaptations on the other hand. Developers can thereby enhance project coordination and improve communication between team members and as a result shorten development time. The practical application of the methodology is described by means of two detailed examples.
Michael Marti presents a complexity management model that is based on the reasoning that product architecture determines to a considerable extent how external complexity is translated into physical products. The model demonstrates a procedure to optimize a product’s architecture and is applied to several industrial products.
Combining rigorous academic research with the latest practical tools and techniques, this book explores the growing area of complextity management in business. Through a range of high quality international cases leading authors help students to understand how to manage organizations in unpredictable and complex business environments.
The treatise supports understanding the phenomena of complexity in engineering, distinguishes complexity from other challenges and presents an overview of definitions and applied approaches.The historical background of complexity management is explained by highlighting the important epochs, their key actors and their discoveries, findings and developments. Knowing about the appearance of early system awareness in ancient Greece, the creation of mechanical philosophy in the 17th century and the discovery of classic physics enables the reader to better comprehend modern system sciences and management approaches.A classification of complexity management approaches by research fields indicates current focus areas and starting points for future discussions. In a comprehensive map, the classification points out mutual overlaps between engineering disciplines in terms of similar complexity management approaches.Finally, the treatise introduces a generic complexity management framework, which is based on structural management approaches.
This book contains all refereed papers accepted during the 14th International Conference on Complex Systems Design & Management CSD&M 2023 that took place in Beijing, People’s Republic of China by the end October 2023. Mastering complex systems requires an integrated understanding of industrial practices as well as sophisticated theoretical techniques and tools. This explains the creation of an annual go-between European and Asian forum dedicated to academic researchers and industrial actors working on complex industrial systems architecting, modeling and engineering. These proceedings cover the most recent trends in the emerging field of complex systems, both from an academic and professional perspective. A special focus was put this year on “New Trends in Complex Systems Engineering.” The CSD&M series of conferences were initiated under the guidance of CESAM Community in Europe, managed by CESAMES. Its Asian version took place in Singapore for three consecutive sessions during 2014 and 2018. The fourth Asian edition was held in Beijing in hybrid with the Chinese Society of Aeronautics and Astronautics (CSAA) as the co-organizer in 2021. Since 2023, its European and Asian conferences merge into one, taking place in China and Europe in turn. CESAM Community aims in organizing the sharing of good practices in systems architecting and model-based systems engineering (MBSE) and certifying the level of knowledge and proficiency in this field through the CESAM certification. The CESAM systems architecting, and model-based systems engineering (MBSE) certification is especially currently the most disseminated professional certification in the world in this domain through more than 3,000 real complex system development projects on which it was operationally deployed and around 10,000 engineers who were trained on the CESAM framework at international level.
After years of new product launches, and entry into emerging markets, Company X, a healthcare company, has seen its product portfolio proliferate and bring costly complexity into its operations. Today, Company X seeks to achieve and sustain an optimal product offering that meets their customers' needs. Through a six-month research effort, we develop a process for stock-keeping-unit (SKU) rationalization to reduce SKU complexity while maintaining sales volumes. We, also, implement operational models to compute complexity costs associated with SKU complexity and employ SKU portfolio dashboards to monitor SKU development and govern SKU creation. This thesis discusses a process for applying these tools to any healthcare company. Through two case studies, we apply the rationalization process on one pilot brand and develop a dashboard to improve product portfolio management. We expect that the SKU rationalization process will release 38% of avoidable costs associated with the pilot brand. These case studies also provide insight into how to correctly diagnose the cost reduction opportunity associated with SKU complexity, as well as methods for a step-change improvement in lead-times and cost-reduction. Lastly, removal of complexity provides flexibility to capture other business opportunities.
As contemporary engineered systems become more interdependent, there is a growing need to manage their system complexity. However, system complexity only exists as implicit and heterogeneous information. This situation causes difficulties to obtain and analyze system complexity. This manuscript illustrates a model-based approach to support system complexity management. The system complexity includes dynamic complexity and structural complexity in this manuscript. The proposed approach includes complexity modeling and complexity analysis. As for complexity modeling, a graph-matrix hybrid complexity modeling approach is proposed to describe the dynamic and structure complexity information. The graph-based architecture models are developed by a unified meta-meta modeling approach. The connections among different architecture models are described by design structure matrix. As for complexity analysis, a general complexity metric provides dynamic and structural complexity values for the designer to evaluate the system. Besides, automatic ontology modeling is introduced to integrate complexity modeling and complexity analysis. Finally, a case study about aero-engine design is conducted. The complexity management processes of three different scenarios are compared in this case study. The comparison results demonstrate that the proposed approach is general and applicable to any engineered system and can support the trade-off between complex product design schemes.