Understanding the economic impact of complexity and reliability interactions in product development

Abstract

Product Development organizations have to deal with the product portfolio of current products and the new products in the pipeline. Many organizations strive to manage product portfolio at an individual product level leading to local optimization of cost, quality and timing. However, a global optimization of cost, quality and timing would involve understanding the complexity created by the total product portfolio and developing strategies to minimize complexity which potentially could lead to better quality and reliability management at an optimum cost. The approach of looking at complexity across products and categorizing them as value added, non-value added and functionally value added yield to components and subsystems standardization. Organizations utilize the standard part approach to minimize complexity and to manage reliability. However, development of such standard parts from the available parts in the existing product portfolio and the newer technological options available at a point of time involves systematic analysis and experimentation to yield the best possible results. Six Sigma, and Design for Six Sigma maturity levels in an organization lead to focusing on systematic reduction of complexity across product lines than the initial focus on low hanging fruits. At this maturity level, the project focus becomes lean development spanning the entire organization. Effectiveness of an approach based on Total Cost of Complexity (TCC), which takes into consideration cost elements such as variable cost, life time quality cost among other costs, is demonstrated with automotive case examples of non-value added, functionally value added, and value added complexity scenarios.