Polaris 2015 Annual Report Download - page 4

Dear Shareholder,
Adverse times both test and develop
leadership, and for Polaris, 2015 qualified
on each of those points. Despite delivering
our sixth straight year of record sales and
earnings, we were disappointed inour
performance and results, as we were
tested by external forces such as declining
currencies and weakening market demand,
internal failures such as our Spirit Lake paint
system debacle, and ineective forecasting.
While this was a dicult and expensive
education, we accept accountability and will
use these lessons to develop into a stronger
company as we enter 2016. We remain
confident and committed to our Strategy
and 2020Objectives, and are setting two
key priorities in2016 to regain momentum:
We will pursue an All-Out Assault on Costs
and rededicate ourselves to Making Growth
Happen. Throughout our history, we have
endeavored to be better, innovate faster and
reward our stakeholders. We hold to these
ideals with unwavering resolve as we look
tothefuture.
An essential part of our future is building and
constantly improving our “Lean Enterprise.”
A core tenet of this system is that customer
demand drives production, and this is
paramount for Polaris. Slowing RANGER
and RZR demand in Fourth Quarter exposed
the limitations of our Max Velocity Program
(MVP) tools, underscoring the need to fully
implement our Retail Flow Management
(RFM) dealer replenishment system in our
O-Road Vehicle (ORV) business. While
we cut shipments to meet our year-end
commitments for overall dealer inventory,
we should never have been in the position
towarrant such a significantreduction.
We are improving our tools and processes
to better manage dealer deliveries and
inventory in2016, and with our new
Huntsville plant coming online in a few
months, we will take a major leap forward
in being able to “make to demand.”
Subsequently, Executive Vice President
of Operations, Engineering and Lean, Ken
Pucel and his team will drive that operating
system back through our plant network
to ensure this dealer inventory issue will
neverreoccur.
Quality and Delivery must also improve as
we progress along our Lean journey. While
an important commitment will always be
to build the best vehicles, we know that
winning in the future will require more than
horsepower and suspension travel. With our
multi-year global investment in assembly
plants in its final stages—from Spirit Lake
and Opole all the way to Jaipur and Shanghai
—we are prepared to deliver higher-quality
vehicles and shorter lead times to customers
all over the world. We also anticipate a future
of consistent margin expansion, as our Lean
tools and Lean leaders drive productivity
and value throughout our operations and
supply chain.
Productivity is aided by volume, as well. To
earn more customers and retain our valued
owners, we are making significant front-
end investments. Tim Larson, Senior Vice
President of Global Customer Excellence
leads Sales and Customer Service, as well as
our consumer-facing digital operations. He
is investing in talent and technology that is
driving improvements at each stage of the
consumer experience and in support of our
SHAREHOLDER LETTER
>> Polaris Executive Management (left to right): Michael Speetzen, Executive Vice President of Finance and Chief Financial Officer;
Kenneth Pucel, Executive Vice President of Operations, Engineering and Lean; Scott Wine, Chairman and Chief Executive Officer;
Bennett Morgan, President and Chief Operating Officer; Stacy Bogart, Senior Vice President–General Counsel and Secretary;
James Williams, Senior Vice President and Chief Human Resources Officer