Complexity cost analysis in a large product line

Hewlett-Packard's Industry Standard Servers (ISS) organization offers a large variety of server computers and accessories. The large range of options available to its customers gives way to complex processes and less than optimal resource usage. In the work presented here, a method for quantifying the costs associated with these effects is reviewed and applied to the current ISS offering. Several areas for investigation are identified including Research and Development, Sales and Marketing, Materials, Inventory, Organizational, amongst other costs that erode profits. Each area is explored through interviews and detailed modeling to arrive to a cost estimate. The end goal for estimating the costs associated with complexity is to establish a simple process for evaluating the "real" profitability of a new product introduction (NPI). Such process is enabled by implementing a set of complexity guidelines through the use of a complexity cost calculator. The end result is that HP's ISS division could see savings in the millions of dollars once the program is implemented. In the end, a set of wide reaching conclusions are drawn from the study to assist in future complexity cost analyses.

Department dc:contributor.department

Leaders for Manufacturing Program at MIT

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2006

Author dc:creator

• Landivar Chávez, José Luis

Advisor dc:contributor.advisor

• Sharon Novak and David Simchi-Levi.

• Electrical Engineering and Computer Science.
• Sloan School of Management.
• Leaders for Manufacturing Program.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/38551

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/38551