Rishab Ravikanth 2nd April 2015

MGI 633 Supply Chains and Global operations Short Case Report

Polaroid: European Distribution System

SOME ISSUES UNDER CONSIDERATION IN AMERICA

Does Polaroid need to reconsider its distribution strategy?

Have their warehouses been consolidated?
Were they to implement a new distribution strategy, would it save them
money or will it end up costing them more ? Would it cut total cost ?
If they were to adopt a different distribution strategy or switch to third
party logistics, would that significantly affect their delivery times
compared to the existing setup? What about efficiency ?
Who would take ownership of the distribution process ?
What about employees ? If there were layoffs, manufacturing strikes
imminent ?
As the existing management is poor, would subsidiaries commit?
Problems with customs and the political situation in Italy

Based on the current scenario, Polaroid can seriously consider having a separate
European direct distribution system. However, they must have support of the
management. They must also retain their employees and not end up laying off
their employees. They must also maintain customer service levels, whilst
optimizing transportation and cost.

They can consider having a direct distribution or two satellite warehouses in

different locations in Europe or they can consider outsourcing logistics activities
to third party logistics providers.

Some of the advantages and disadvantages of having direct distribution are listed
here

The advantages are that

It eliminates intermediary expenses

It increases direct customer contact
It provides more control
 Since no intermediaries share profits, most direct distribution channels
have higher rates of profit

On the downside

It reduces distribution channel options

It increases internal workload options
It raises order fulfillment costs
There is limited consumer choice
There is limited customer focus
After sales service is generally poor

They could consider mixing up different strategies for a trial period and then
decide on which option they can finally decide on for a long term decision.

RECOMMENDATIONS

Polaroid could establish regional distribution centers and could tie up

with logistics services to take charge of their logistics and distribution
activities.
Polaroid could also consider the European Distribution Centers,
especially out of the Netherlands.

RATIONALE FOR RECOMMENDATIONS

Regional distribution centers can manage and rotate stock to ensure that
shipments are made on time.
RDCs can closely track the product and chain of custody of the product
and help avoid theft and counterfeit products.
It allows for consolidation of shipment, through which lower costs can be
leveraged.
RDCs can consolidate a number of products into a single delivery.
Can help store buffer stock in cases of emergency.
Allows for increased warehousing capacity. Smaller more frequent
shipments enable in-country supply chains to increase their throughput
of product without new investment in increased physical capacity.
The Netherlands boasts more European Distribution Centers (EDCs) than
any other country in Europe. EDCs provide a single point-of entry for
distribution into Europe, which allows foreign companies to streamline
and maximize efficiencies in their distribution processes
3PL would take full control of all aspects of distribution, i.e warehousing,
transportation and would help eliminate warehouse costs and bring
down costs severely.
TOOLS THAT CAN BE USED TO ASSESS DECISIONS

SWOT Analysis
Break-even Analysis
Porters 5 forces to assess the prevalent market conditions
Logistics software like LOGWARE to plan routes and then assess the
impact of 3PL logistics
Solver in Excel