This, however, is not entirely the case and in fact a great deal of process and product variety exists even in most of the niche markets in the manufacturing sector (MacDuffie et al. 1996). This variety increases as product complexity increases which has a twofold effect on a given manufacturing organizations market position and profitability: first, productivity tends to decrease as product complexity increases, limiting profitability due to the basic rules of economies of scale; second, it increases competitiveness in most industries as it increases the number and degrees of variations possible (MacDuffie et al. 1996). Complexity also affects the cost of manufacture and thus profitable price points for the product and thus the level of variety in most manufacturing processes and products is a major contributor to competitiveness in manufacturing industries and between manufacturing organizations.
Variety is clearly as influential in manufacturing operations as it is in the provision of services and possibly even more so.
Variety is only one factor in many that influence competitiveness and profitability for business organizations. Even the other three vs do not paint a fully comprehensive view of the factors influencing given markets and industries. By developing a clearer understanding of how variety influences given industries, however, it is hoped that a more refined knowledge of competitiveness is obtained.
Johnston, R. & Clark, G, (2008). Service operations management. New York: Prentice Hall.
Macduffie, J.; Sethuraman, K. & Fisher, M. (1996). “Product Variety and Manufacturing Performance: Evidence from the International Automotive Assembly Plant Study.” Management science 42(3), pp. 350-69.