Hence, it is no point in keeping such an extensive product line when most of our revenues are from a short number of products only
Process Types: With the large number of product variety, the process takes the form of batch process. Such a process type requires quite a narrow but specialized skills. Getting skilled manpower from is the highest factor resulting in high costs. Moreover such a process type requires changeovers at each stage of production thereby increasing the complexity and the costs of the production process.
Process Layout: With a reasonably large variety and volume, the appropriate process layout is a combination of functional layout with elements of cellular layout. Such a combination is difficult to manage as the manager has to keep track of a large number of processes going on simultaneously. This type of layout requires free flow of product pieces and resources in the organization. The most important characteristic of such a layout is the flexibility of path, product design and lot size (Shim and Siegel, 1999). Hence, it calls for an extensive coordination amongst the workers. Since more than one item might be vying for a same resource, the time in production of the item increases, some of the products might have to wait to get the appropriate resource. This results in a decrease in productivity.
Skills required: With the large number of product types, it becomes necessary to have a wide range of skills that are differentiated. These specialized skills increase the overall cost of the products. Managing different skills becomes another challenge as the manager has to keep track of the various resources that will be required for various products.
Design issues: With the large types of products being produced in the organization, the employees are not in better position to contribute towards the betterment of product design. As a result, the organization fails in launching new design products that enhance the customer