Identifying Complexity Costs

Recognizing and mastering complexity is one of the core tasks of the management and top executives. The key prerequisite is the ability to identify complexity drivers, their measurement, monitoring (e.g. via dashboards) and to evaluate them. Conventional controlling tools are usually not sufficient for this. But: "Without being able to know where you position yourself and where trends are heading, it is neither impossible to optimize nor is it possible to show that decisions made to control complexity will be crowned with business success at the end of the day.

  • What does complexity cost?
  • Are the complexity drivers in the company and their costs known?
  • Are my complexity costs higher than those of my competitors?
  • What effects do the complexity drivers have on my business success?

As the global market leader in Complexity Management we implement methodologies fast and efficiently. Depending on the field of application we usually achieve a complexity cost reduction of up to 30 % with our clients.


A selection of the tools used

With the help of process-oriented cost accounting, overhead costs can be allocated according to their origin
With the help of process-oriented cost accounting, overhead costs can be allocated according to their origin

With the help of process-oriented cost accounting, overhead costs can be allocated according to their origin

Further information

  • 16.09.2019
    10 min.
    Daten nutzen, um Komplexität zu beherrschen
    Daten nutzen, um Komplexität zu beherrschen

    28.01.2020
    1 min.
    Datenbasiertes Komplexitätsmanagement
    Datenbasiertes Komplexitätsmanagement

    12.11.2019
    1 min.
    Complexity Management Congress 2019
    Complexity Management Congress 2019

    16.10.2019
    1 min.
    Maschinenbaugipfel 2019
    Maschinenbaugipfel 2019


    • Precise order calculations with the complexity cost tool


      In terms of sales, a plant manufacturer was required to respond to customer-specific needs and specifications (design to order) on the one hand, and to have a reasonably coherent cost calculation available only for standard components on the other. With the approach of making indirect complexity costs transparent in addition to material, production and investment costs, we were able to make his order calculations much more precise. Using the complexity cost tool we presented, the client is now able to calculate the manufacturing and investment costs for individual customer orders that deviate from his modular system, as well as the not inconsiderable indirect costs that arise. This cost transparency now allows him to strategically evaluate and price his individual customer orders correctly.

    • Reduction of unnecessary part variants and complexity costs


      In order to design its portfolio innovatively, one of our medium-sized customers was very good at generating new product variants quickly and placing them on the market. In addition to the "time-to-market" on the product side, the control of the internal diversity and the associated indirect costs, which were extremely high for him, were also decisive for the economic success. The customer appreciated our approach to make transparent not only material, production and investment costs but also the indirect complexity costs of a high diversity of parts. As a result of our "Complexity Cost Project", the customer was presented with our Complexity Cost Tool for internal variant avoidance - instead of later variant cleanup. In addition, the customer now has a cost map in his engineering department, in which the costs of generating defined part variants are shown to every developer or CAD designer at his workplace. As a result of the greatly increased cost awareness in the design department, the company has succeeded in significantly reducing unnecessary part variants in the development process and thus in avoiding considerable complexity costs.

    • Complexity cost allocation
    • Departmental models
    • Complexity KPI model
    • Complexity Dashboards und Complexity Scorecard
    • Complexity Index

Contact

Norbert Große Entrup
+49 241 51031 0
norbert.grosse-entrup@schuh-group.com


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