Analysis of the relationship between production efficiency, product complexity and market destination: case study of a multinational company that exports capital goods

Abstract

The objective of this article was to analyze the effect of both target market and product complexity on produc- tion activities in an industrial goods company located in the state of São Paulo-Brazil. During twelve months in 2005, nine projects developed and manufactured by the company were monitored and their data collected, according to a factorial experiment involving two independent variables (target market and product complexi- ty) and two result variables used to measure production efficiency: percentage of production overtime actually spent as compared to planned, and man-hours for reworking production. Results showed that products for the American and European markets received differentiated treatment due to the market factor. Another statis- tically significant factor was that high complexity products for the American and European markets showed cost projection errors (under estimated). On the other hand, low complexity products for the domestic market showed cost projection errors (over estimated). Finally, a product with more complexity and a demanding des- tination market (American and European) impacts production low efficiency. Keywords: Quality, Product, Efficiency, Production, Industrial goods.