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