Manufacturing complexity is eating profits silently - and most executives don't see the full picture.
McKinsey & Company research reveals that companies with highly configurable products face hidden costs across their entire value chain - costs that "collectively can span the entire value chain and often grow exponentially with the addition of each new variant." Mastering complexity with the consumer-first product portfolio | McKinsey
The problem isn't just obvious - it's systematic and compounding.
Here's what happens with every complex sale:
Custom technical documentation creation
Multi-stage engineering review cycles
Specification validation across departments
Cross-functional stakeholder coordination
Specialized tooling and testing requirements
The brutal reality? Many specialized models "effectively freeload off more profitable lines" because they require "more investment in R&D, tooling, testing, marketing, purchasing, and certification."
Manufacturing & Supply Chain | Operations | McKinsey & Company
Your engineering teams are pulled into routine configuration work instead of innovation. Your sales cycles stretch longer. Your margins erode quietly.
Industry data shows manufacturing companies average $723 in customer acquisition costs - reflecting the resource-intensive nature of technical sales cycles.
But this masks the real story: companies with highly configurable products often spend significantly more due to the complexity tax.
The irony is painful: Your most sophisticated products - the ones with the highest potential margins - become the most expensive to sell. Each variant multiplies operational complexity. Each customization option creates new bottlenecks. Each technical specification requires expert review.
Smart manufacturers are discovering they need "a new approach to understanding cost complexity" that reveals "what complexity is truly costing them, and where it comes from."
Mastering complexity with the consumer-first product portfolio | McKinsey
They're finding ways to maintain product sophistication while eliminating specification friction.
The goal isn't to reduce product complexity - it's to decouple product sophistication from sales complexity. Leading manufacturers are already making this transition.
Source links:
McKinsey: "Tailoring tradeoffs for simpler portfolios" (https://lnkd.in/gFumEa_C)
McKinsey: "Finding the true cost of portfolio complexity" (https://lnkd.in/g9rw8Yj7)
#Manufacturing hashtag#ProductComplexity hashtag#Sales hashtag#EngineeringProductivity hashtag#ManufacturingStrategy"
McKinsey & Company research reveals that companies with highly configurable products face hidden costs across their entire value chain - costs that "collectively can span the entire value chain and often grow exponentially with the addition of each new variant." Mastering complexity with the consumer-first product portfolio | McKinsey
The problem isn't just obvious - it's systematic and compounding.
Here's what happens with every complex sale:
Custom technical documentation creation
Multi-stage engineering review cycles
Specification validation across departments
Cross-functional stakeholder coordination
Specialized tooling and testing requirements
The brutal reality? Many specialized models "effectively freeload off more profitable lines" because they require "more investment in R&D, tooling, testing, marketing, purchasing, and certification."
Manufacturing & Supply Chain | Operations | McKinsey & Company
Your engineering teams are pulled into routine configuration work instead of innovation. Your sales cycles stretch longer. Your margins erode quietly.
Industry data shows manufacturing companies average $723 in customer acquisition costs - reflecting the resource-intensive nature of technical sales cycles.
But this masks the real story: companies with highly configurable products often spend significantly more due to the complexity tax.
The irony is painful: Your most sophisticated products - the ones with the highest potential margins - become the most expensive to sell. Each variant multiplies operational complexity. Each customization option creates new bottlenecks. Each technical specification requires expert review.
Smart manufacturers are discovering they need "a new approach to understanding cost complexity" that reveals "what complexity is truly costing them, and where it comes from."
Mastering complexity with the consumer-first product portfolio | McKinsey
They're finding ways to maintain product sophistication while eliminating specification friction.
The goal isn't to reduce product complexity - it's to decouple product sophistication from sales complexity. Leading manufacturers are already making this transition.
Source links:
McKinsey: "Tailoring tradeoffs for simpler portfolios" (https://lnkd.in/gFumEa_C)
McKinsey: "Finding the true cost of portfolio complexity" (https://lnkd.in/g9rw8Yj7)
#Manufacturing hashtag#ProductComplexity hashtag#Sales hashtag#EngineeringProductivity hashtag#ManufacturingStrategy"
