The complexity and cost to produce something which is complex is more expensive than something that is lower quality or produced at a slower speed.
Attend the 1-day Lean Six Sigma Process Improvement Training Course delivered by pdtraining in Sydney, Brisbane, Perth and other cities to learn about how the law of complexity and cost affects decisions related to process improvement, and more.
What is Complexity?
Complexity in Six Sigma means non-value added high cost manufacturing processes. The Law of Complexity and Cost adds more non-value-added cost and work than either poor quality (low Sigma) or slow speed (un-Lean).
What Causes Complexity?
There are two significant contributors to complexity:
- Complexity escalates under differentiation, and occurs when we strive to develop a variety of offerings, features, and attributes. As an example, consider a cell-phone manufacturer with a growing number of cell phone models in its portfolio. Each model will require its own R&D, Marketing, and Support.
- Complexity escalates under sheer volume of back-operational work. Consider the production of a jet plane which involves hundreds of thousands of engineering specifications and processes that need come together for a final product.
Both scenarios are always at immense strategic risk when faced by a less-complex competitor.
How to Simplify?
Complexity reduction or elimination of non-value added processes is central to Six Sigma and Lean thinking.
There are two approaches to reducing complexity:
- Standardisation: Standardising the internal tasks and components of an offering so that a fewer number of them can be assembled into many different products.
A practical example can be found in the automotive industry. Instead of 8 different vehicles built on 8 different platforms, the manufacturer condenses its engineering designs into one platform. Consider how GM now shares one platform across Chevrolet, Cadillac, Buick, and GMC.
- Optimisation: Eliminating offerings that generate a loss particularly where you are strategically disadvantaged or see a declining market. Almost every organisation has products that refuse to generate profit. These should be removed or re-priced to generate adequate return.
The standardisation process achieves low cost without the market penalisation that an optimisation strategy may suffer.
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All public Lean Six Sigma Process Improvement Training courses include am/pm tea, lunch, printed courseware and a certificate of completion. Customised courses are available upon request so please contact pdtraining on 1300 121 400 to learn more.