The traditional goal of complexity management initiatives has been to reduce costs. But we've found there's almost always a much larger positive impact on revenue. New Bain research from 110 companies in 17 industries ranging from cosmetics to aerospace and medical equipment to mutual funds shows that companies with the lowest complexity grew 30-50% faster than their average competitors. Why? Because too much variety (high complexity) is often a symptom of a larger problem: poor understanding of customers. By providing the right level of product variety, companies can increase sales and market share, while cutting costs.

Bain & Company work on over 490 complexity projects across industries has helped companies grow revenue by 5-40%, while reducing costs 10% to 35% percent. While the savings are significant, the largest benefits nearly always come from achieving a better understanding of customer needs, which lead to improved customer satisfaction, faster inventory turnover, and ultimately, higher revenues and margins.

We start with a one-time "clean-up" and institute an ongoing process for managing complexity. Through a "Model T" analysis, we uncover the total cost of complexity. "Model T" analysis asks the question, "How would our business change if we made just one average product?" Using a detailed understanding of customers, we then determine what level of complexity and cost should be added back in to meet true needs. Lastly, Model T puts in place the processes and practices that keep complexity out.

To find out more about Bain's work in this capability area, please contact the practice.