The challenge of product complexity
The market is increasingly demanding customizable products. This puts significant pressure on companies to offer many configuration options while at the same time adding diversification. The result: numerous product variants whose development and production must continue to be high quality and profitable.
This is precisely where TARGUS’ product structure management comes in — providing a proven methodology to reduce complexity, development time, and the costs associated with product variance, both during development and in production.
The three strategies of product structure management
Effective product structure management begins with a thorough analysis of market and customer requirements as well as the existing product portfolio. On this basis, companies can identify the optimal strategy for their products. There are three strategies that can be combined:
- common part/common module strategy: Focuses on the reuse of identical components across different products
- modular/construction kit strategy: Enables flexible combinations of standardized modules
- platform strategy: Utilizes a common basic architecture for different product variants
These strategies serve as a starting point for the design of an optimized product structure under the guiding principles of modularization and standardization.
The goal of product structure management
The ideal target state for optimized product structure management is high external variance with low internal variance. This means that customers can continue to choose from a large number of product variants, while internal complexity and therefore costs are significantly reduced.
The advantages of effective product structure management
The implementation of well-thought-out product structure management offers numerous advantages:
- Transparency regarding cross-product cost drivers: identification of cost factors that affect several products
- Definition of the appropriate structural strategy: selection of the optimal strategy for the specific product portfolio
- Reduced complexity: a product portfolio with low internal variance and high external variance
Practical implementation
As a result of a TARGUS PSM project, a company receives a detailed roadmap with concrete measures for the product (families), which enables manageable product and variant complexity.
Would you like to find out more about product cost optimization and other approaches to product cost management? In our brochure “Product cost management as a driver of competitiveness” you will find detailed information on the methods and their application in practice.
In the upcoming article we will continue our series with a focus on the Design-to-Cost method. Stay tuned!
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