Product line simplification in action

Years back, in an effort to teach my children about money, we set up a candy store in the company.

The first sign shown comes from the Candy store we set up with my first son.


It offered a wide range of choices, multiple price points, and food choices that required us to shop at several different stores in order to stock them.

This second sign comes from the Candy store my second son set-up after the company had been through the ITW complexity reduction process.

Candy store price list after the PLS process

We had one product offering, one price point, and had narrowed our offering to our core products.

The second candy store was easier to manage and run. It also made more money. We didn’t have to worry about change and the product offering could be whatever was available at the grocery store. In the end, the customers at the second store always left with what was being advertised and so they seemed happier.

This is probably the simplest, but most compelling, Product Line Simplification (PLS) story I have ever seen. Obviously, General Motors can’t just put a sign outside the dealerships and proclaim “Cars $24,995”, but the proliferation of products and customers is the key driver of complexity in any organization. Complexity is exceptionally camouflaged and difficult to find. Often it is concealed in the minutia.

Many people who learn about the 80/20 process and PLS presume that we are mindlessly going to eliminate the 80% of the products that produce 20% of the revenue. This couldn’t be further from the truth.

PLS is a methodical process. Correctly done it is extremely powerful. Rushed through haphazardly, it can have major negative repercussions on a business for years to come. 80/20 Quad Analysis offers a clear and systematic way to work through product offerings and customers and be confident that you are making good choices for your company.

It is only after the PLS process that I ever see organizations make game changing transformations. They are ALWAYS there waiting to be discovered. But you can’t hear the music until you have eliminated the noise.

Candy anyone? Only a $1.00.