Analysing product complexity related to product variety in a manufacturing firm with a case study at an automobile assembly plant

Abstract

In this paper, product variety refers to product complexity resulting from various customer choices related to a product, while product complexity involves all factors that make a product complex. Product variety can be a major contributing factor to product complexity of a manufactured product. High product complexity can have a significant impact on many cost areas, including material, manufacturing, inventory and distribution. A number of tools are applied in this paper to analyse product complexity related to product variety and identify product complexity reduction opportunities associated with product attributes. Measures of product variety are discussed. Two Data Envelopment Analysis (DEA) models for comparing the relative product complexities related to product variety among similar products, and a DEA model for ranking various attributes of a product for complexity reduction consideration are proposed. A case study based on the considerations of a US automobile plant is also presented to illustrate the applications of these tools.