Maxwell Corporation Case Study
1.) CASE STUDY : MAXWELL CORPORATION – DISTRIBUTION SYSTEM:
Marks: 15
Division A : roll no. 1 to 30
Division B : roll no.1 to 35
The President of Maxwell Corporation was considering whether the Company should set up its own distribution system or to outsource the entire distribution and logistics functions to a third party service provider.
The Company had set up a manufacturing plant in Vizag where a wide range of orthopedic equipments like the crutches, wheel chairs, heating pads, elastic bandages etc. were manufactured. Presently, the finished goods warehouse was located at Vizag itself and the products were sent to all major towns in India as a point to point dispatch.
The Company was supplying these equipments direscly to retail stores at all locations. Marketing activity was headed by a general manager – marketing, based at Vishakhapatnam who was supported by a sales team comprising of sales officers. The company was not resorting to advertisement and publicity though the products of the company were fairly well known. It was felt that all the customers wanted quick responses to their orders as the products catered to emergency patients. But, these retail outlets carried only limited inventories. This was due to the fact that most of the products came in a variety of styles, shapes and sizes and the requirement was more customer driven. Keeping even a moderate inventory of all types was not economically viable and lead to dead stocks in the long run. The company was looking at various options which included the following: 1. Setting up of hub and spoke type of distribution network wherein it was proposed to set up a stock point or mother warehouse in each zone, east, west, south and north respective retail outlets were to be fed from the mother warehouse located in that zone. 2. 2. Setting up a central warehouse anywhere in Central India and feeding retail outlets from this location. 3. Changing the distribution channel from the present
Marks: 15
Division A : roll no. 1 to 30
Division B : roll no.1 to 35
The President of Maxwell Corporation was considering whether the Company should set up its own distribution system or to outsource the entire distribution and logistics functions to a third party service provider.
The Company had set up a manufacturing plant in Vizag where a wide range of orthopedic equipments like the crutches, wheel chairs, heating pads, elastic bandages etc. were manufactured. Presently, the finished goods warehouse was located at Vizag itself and the products were sent to all major towns in India as a point to point dispatch.
The Company was supplying these equipments direscly to retail stores at all locations. Marketing activity was headed by a general manager – marketing, based at Vishakhapatnam who was supported by a sales team comprising of sales officers. The company was not resorting to advertisement and publicity though the products of the company were fairly well known. It was felt that all the customers wanted quick responses to their orders as the products catered to emergency patients. But, these retail outlets carried only limited inventories. This was due to the fact that most of the products came in a variety of styles, shapes and sizes and the requirement was more customer driven. Keeping even a moderate inventory of all types was not economically viable and lead to dead stocks in the long run. The company was looking at various options which included the following: 1. Setting up of hub and spoke type of distribution network wherein it was proposed to set up a stock point or mother warehouse in each zone, east, west, south and north respective retail outlets were to be fed from the mother warehouse located in that zone. 2. 2. Setting up a central warehouse anywhere in Central India and feeding retail outlets from this location. 3. Changing the distribution channel from the present