Consolidating plants


When fully embraced, complexity reduction initiatives can yield cost savings as high as 25-35% while also driving revenue lift.Complexity is a major issue for today’s business leaders.Bernstein & Co., said in a note to clients."The story is, or continues to be, that Harley is in the throes of a significant secular decline," he wrote. Harley executives said they're drawing more consumers to their brand, but couldn't say during the call with analysts how many are buying used instead of new bikes.As bike demand weakens, one of Harley's rival brands is calling it quits.The Kansas City plant closing will cost Harley as much as 0 million through 2019, then result in annual cash savings of million to million after 2020.

For commodity items, a program of diversified “spot buys” usually underperforms a well-planned buying program.In a recent Bain & Company survey of more than 1200 global executives, 63% of respondents claimed that excessive complexity was raising costs and hindering growth.Properly limiting complexity can have measurable benefits.Polaris Industries Inc., which started winding down its Victory motorcycle operations early last year, projected adjusted profit of as much as .20 a share for 2018, well below analysts' .99 a share average estimate.The Medina, Minnesota-based company's stock plunged as much as 17 percent, the biggest drop since November 2008.Southwest Airlines grew up with a very simple business model; it served only secondary airports, with no travel agents, no assigned seating, and only one type of plane (Boeing 737s).

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