Control the Complexity that Innovation Causes
Offering innovative markets helps you protect market share and repel rivals' attacks. But innovation can also hurt your profitability--by spawning costly complexity throughout your operations. For example, employees must adjust workflows to accommodate new product configurations, and inventories expand.
How to manage the effects of complexity? One strategy is to design products that don't get customized until the last step in assembly or distribution. You'll reduce complexity by enabling manufacturers to source materials and components from anywhere and assemble products close to the point of sale. Home Depot, for example, designs and installs custom kitchens by combining affordable stock items from varied manufacturers.
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Posted by: Anonymous | September 24, 2008 10:18 AM
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