I was just made aware of the book Conquering Complexity in Your Business: How Wal-Mart, Toyota, and Other Top Companies Are Breaking Through the Ceiling on Profits and Growth by Michael L. George and Stephen A. Wilson. It was published in 2004, so you can even get a used copy now
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The basic premise is a really sound one that I agree with and wish I had put into these words. “The winning strategies were based on either supplying a very low level of complexity to the marketplace … or targeting customers who were willing to pay an adequate premium for higher complexity…”
Part of the trick is to deliver higher complexity at a low cost. At Factory Insite we have the slogan “Identify, Simplify, Automate” to describe how we approach helping our customers to improve profits. We identify the value to the customers, simplify the process to remove unnecessary effort, and automate to drive costs down.
Certainly part of reducing complexity is using lean concepts; if you are wasting resources and performing steps that your customers do not see as worth paying for you are loosing potential profit. But what about other areas like the time consumed in hand-offs between internal and external workers. In this day of outsourcing and contract workers it is easy to look only at the cost of the worker and not consider the communications required to deliver a product that meets customer expectations and market timing.
The solutions to the problem of complexity presented in Conquering Complexity in Your Business are:
- Eliminate complexity that customers are unwilling to pay for.
- Exploit complexity that customers will pay for.
- Minimize the costs of complexity you offer.