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.