The automobile industry is one classic example. Several years ago, I was involved in a study to measure
the impact that the variety of options available to consumers had on productivity at a Big Three auto plant. As the study began, I tried to understand variety from the customer’s perspective by visiting a dealer near my
home in the Philadelphia area and “shopping” for the car model produced in the plant we were to
study. From sales literature provided by the dealer, I determined that when one took into account all
the choices for color, interior features, drivetrain configurations, and other options, the company
was actually offering 20 million versions of the car. But because ordering a car with the desired
options entailed an eight-week wait for delivery, more than 90% of customers bought their cars off the lot.