Complexity Management in Mass Customization SMEs

As mass customization is being widely adopted, manufacturing companies are faced with an increasing challenge of establishing and maintaining manufacturing systems with sufficient flexibility to meet customers’ diverse needs and yet be efficient enough to be competitive. This is also the case in Small and Medium Sized Enterprises (SMEs), which are also experiencing a demand for increased product variety. However, increased variety in the product portfolio often implies increased complexity in manufacturing costs, which combined with low manufacturing volumes in SMEs often implies that parts of the product portfolio may prove unprofitable. This is often found to be a product management issue, where complexity increases over time, as new variety is introduced in the product portfolio, not following an explicit procedure for assessing impact of increased product variety and complexity. This paper investigates the impact of excess product variety and complexity in four different SMEs, and describes experiences with using a structured approach to assessing variety and consolidating the product portfolio. The issues found in the cases are SME specific, as the volume-variety relationship as well as the organizational resources available to perform product management in relation to new product development and adaption of the product portfolio to accommodate requirements for specific customer orders.