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If you’re running a wholesale, distribution, or production company today, you’re navigating through an unprecedented level of complexity – and managing customer expectations and profitability at the same time is anything but simple.
A growth strategy often entails adding more products, customers, and suppliers to the portfolio. This creates a surge in the introduction of new products, while older products continue to be either sold or become obsolete. At the same time, new customers demand more customization, and your channels to market are growing more diverse.
However, increasing amounts of products and customers do not automatically translate to increased profitability. Market conditions are unpredictable and service requirements are more challenging.
Meanwhile, your commercial- and supply chain teams will find it challenging to keep up with added complexities in their daily routines, and without any complete overview, it will put added pressure and strain on your business’ efficiency.
Without any insight and consequent actions to manage the added layer of complexity, your company will experience a significant rise in operating costs and will become slower and unresponsive to new market opportunities and investments.
Most companies don’t measure complexity and are at the very early stages of Complexity Management with minimal awareness and at best, ad hoc projects once a year. Without proper insights, they risk getting rid of products with low sales or low profit margins, without fully understanding the true causes of complexity within their own business that have the biggest impact on value.