MEASUREMENT AND COSTS OF COMPLICATION

Benefits, costs, measurements of management of complications are described in this section.

Variety is the complication's measurement index. It is the number of differentiable statuses of a system. Variety is justified by combinatorics (Malik, 2007). Complication measurement is initially subjective and little dependent on the observer's viewpoint (Flückinger&Rauterberg, 1995). For the measurement of complication, no proven or confirmed index is present. Generally, it relies on the observer and her or his attitudes towards the system.

On the basis of measurement, a hard fact might be controlled by key point indicators. Different KPIs are listed by Förster which determine systems that are complicated (Förster, 2003):

Number of part numbers

For new systems, new part numbers

Development changes, costs, and time

Changes, costs, and time of production

Changes, costs, and time of procurement

Number of suppliers and order positions

Different offered products in international markets

The effort of product management for new products

        Complication measurement has been investigated by authors but they could not find a tangible solution. Actually, the same is legal for costs as well. Complication management will optimize the ROI or return on investment, ROS or return on sales, or EBIT or earnings before interest and tax. In 2007, a survey by A.T. Kearney as a group seemed to confirm EBIT is improved by complication’s active management by 3-5 percent. That is why, transparency should be provided by the whole chain of value (Scheiter et al., 2007). For complication management to be effective, it should be applied continually for an extended time period for showing results which are tangible (Scheiter et al., 2007).

        Overall, in the literature about management, there is no common agreement to define the identity of complication. However, it is agreed by most authors that complication comprises of limitations like a consistent momentum/motion and the increment in non-transparency. The complication theory seems to describe the relationship between elements. However, those can seemingly change because of the changing statues and are also nonlinear because of the back coupling which is present either externally or internally.

        Effect of complication is not tangible and cannot be measurable for management. Only indirectly, the costs incurred by complications can be measured. And success is seemingly realized costs are reduced by the management of complications. Control and reduction are the general methods which are utilized for handling complication. Furthermore, elimination is seldom utilized as the effectiveness of the project is endangered by it.