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MANAGING PRODUCT VARIETY: How to reduce complexity and increase product portfolios’ profitability
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Industrial Management.
2013 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

This paper describes a new approach to the management of product variety that

should help manufacturing companies to improve the profitability of their product

portfolios. The scientific research is conducted in different ways. After a short

introduction of basic concepts relevant for the research, a broad review of the

existing academic knowledge is proposed in form of a literature review. As a

conclusion of the review, gap analysis shows the limitations of existing methods of

variety management and sets the requirements for a new methodology. A

methodology is hence developed by the author to analyze variety of product

portfolios. The methodology includes the analysis of customer requirements, the

calculation of complexity costs and the mapping of physical variety. Furthermore,

clear guidelines are presented with the aim of improving the overall profitability of the

chosen product portfolio; these mainly refer to changes in product architectural

aspects or complete elimination of certain product variants.

Subsequently, empirical evidence has been gathered from a case study at a

manufacturing company, which has been a valuable source of data to confirm the

applicability and the validity of such a methodology. The benefits of using the

proposed methodology are proved, comparing the achieved results to the ones

gathered after the application of other methodologies.

The purpose of this study was to develop a new methodology for supporting and

enhancing decision related to variety in manufacturing companies. This methodology

aims to find a way to link the cost of complexity to the product architecture, what

represents a very important aspect that existing methodologies cannot fully perform.

For this reason the study provides a valuable contribution to the empirical knowledge

on variety management practices.

Place, publisher, year, edition, pages
2013. , 95 p.
National Category
Business Administration
URN: urn:nbn:se:kth:diva-124608OAI: diva2:637564
Available from: 2013-08-29 Created: 2013-07-19 Last updated: 2013-08-29Bibliographically approved

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