Complexity Was Never the Problem

Manufacturing has never been more technologically capable. Engineering teams collaborate seamlessly across continents. Artificial intelligence is accelerating design decisions while global supply chains connect thousands of suppliers through increasingly sophisticated digital platforms. By almost every measure, manufacturers have more tools, more data, and more computing power than at any point in history. 

Yet many of the world’s most successful manufacturers continue to wrestle with delayed product launches, fragmented engineering decisions, duplicate parts, inconsistent supplier information, and rising operational costs. Why? Despite billions of dollars invested in ERP systems, PLM platforms, procurement applications, and digital transformation initiatives, those problems continue to persist. 

What if the issue was never a lack of technology? What if the real challenge is the accumulated cost of complexity? 

Over the past several years, I’ve had countless conversations with executives at some of the world’s largest manufacturers. Increasingly, they’re arriving at the same conclusion: complexity has become one of the biggest obstacles to improving supply chain performance. Nowhere is this more apparent than in the automotive industry, where established manufacturers compete against EV startups capable of bringing new products to market in months rather than years. Those startups don’t necessarily have better technology or larger budgets. They simply have far less organizational complexity. 

One of the ironies of manufacturing is that success today often creates the very conditions that slow future success. As companies grow, they acquire competitors, introduce new product lines, expand into new markets, build additional plants, and onboard thousands of new suppliers. Every one of those decisions is strategically sound. Collectively, however, they create more systems, more processes, more data, and more opportunities for information to become fragmented across the enterprise. 

It dawned on me that there is a Complexity Tax being levied against large successful manufacturers, where an accumulated economic cost emerges. This Complexity Tax manifests when an organization’s growth outpaces its ability to unify products, suppliers, processes, and information.  Although seemingly ‘hidden’, its intuitively obvious how easily this complexity ‘happens’ in successful organizations, as represented in the following graphic. 

Unlike most business costs, the Complexity Tax rarely appears on a financial statement. It isn’t tracked as a KPI or highlighted in a board presentation. Instead, it quietly surfaces as slower innovation, longer product development cycles, delayed sourcing decisions, duplicate engineering effort, inconsistent supplier data, missed market opportunities, and a reduced ability to respond to change. Over time, what begins as operational friction becomes a measurable competitive disadvantage. 

Complexity Tax in Action 

It usually begins as a routine design review. Engineering finishes the latest design, but procurement discovers a few preferred components are no longer available. Manufacturing raises questions about buildability while finance updates commodity assumptions. Quality asks for additional supplier validation, and logistics identifies a new tariff risk. These issues aren’t unusual, and each makes perfect sense on its own, but any one of them can cause the launch date to slip 2 to 4 weeks. That’s the Complexity Tax in action. 

In a recent conversation with leaders at a large automotive OEM, I explained how Samsung’s Caidentia Design to Source platform could create a common view of the bill of materials across functions, plants, and systems. They immediately saw the value, but one executive summed up the challenge simply: “This is extremely difficult to take on given our 30 plants, 12 ERP systems and the 40 countries we operate in.” 

That comment captures the Complexity Tax perfectly. The organization had become so complex that even addressing the problem felt overwhelming. 

But it doesn’t have to be solved all at once. Manufacturers can start with a product, business unit, or specific use case, prove the value, and expand over time. 

The Invisible Factory 

A second factory has quietly emerged inside every organization: the one where information moves. Engineering hands work to procurement, procurement collaborates with suppliers, and information flows from manufacturing through logistics.  

Every product passes through this Invisible Factory. Yet unlike the physical factory, it is rarely mapped, measured, or managed with the same discipline. As complexity grows, information moves more slowly, decisions take longer, and the impact often isn’t visible until a launch date begins to slip. 

Where the Complexity Tax Comes From 

The instinct is to consolidate everything onto one global system, which can cost hundreds of million dollars. The more useful question isn’t “how do we get everyone onto one system?” It’s “what has to be unified even while multiple systems remain?” 

Having too many systems is the most visible symptom. The bigger problem, however, is that those systems don’t agree on the basics. A part may carry different identifiers depending on the plant, supplier, division, or region. An engineering bill of materials may not align with the manufacturing, sourcing, or service version of the same product. Even supplier names can vary by legal entity, while “cost” might mean standard cost, purchase price, landed cost, or quoted cost depending on who’s in the conversation. 

Organizational Speed Is the Real Advantage 

The BOM is where it All Comes Together 

The answer isn’t to replace every ERP or PLM system with a single platform. That may be the long-term vision, but most manufacturers can’t wait years to make better product decisions. 

A more practical approach is to connect the systems they already have around the bill of materials—the place where engineering, sourcing, suppliers, and manufacturing naturally come together. When those teams are working from the same product context, decisions happen faster, collaboration gets easier, and the Complexity Tax starts to come down. 

Complexity isn’t going away. It comes with the scale and growth of a successful manufacturing business. The opportunity is to manage it better, so it no longer determines how quickly the business can move.