We don't anticipate a serious struggle over this operation. Although amazingly effective, Kappa's system is small - most other groups at Sigma don't yet see the potential benefits if applied to high-volume lines.

Omega's swollen administrative group has a vested interest in maintaining their present cumbersome distribution system. It provides travel perks--global travel--for senior staff when bottlenecks have to be "straightened out" on site! A quick review of related expenses shows this is a serious vulnerability for them.

Also, as our most conservative (consumer) division, Omega is slower to innovate. I've heard their planners call the Dutch bonded warehouse system "risky"! Our opinion: the top EU companies are already using this system and have demonstrated real cost savings relative to country-specific warehouses. How much more demonstration do they want?