The Top Two Core Problems and Challenges
Disruptions in the supply chain and logistics are a core problem as Polaris Inc. faces serious challenges acquiring materials and parts for production. According to Tita (2021), due to several inconsistencies and unreliability in the supply chain, Polaris often makes changes to its plans. The supply chain and logistics disruptions and lack of backup components put Polaris in a difficult position as the manufacturers could not advance production and deliver on time. Polaris had challenges acquiring materials and components for the production of its motorcycles, boats, all-terrain vehicles, snowmobiles, and off-road utility vehicles (Tita, 2021). The inadequacies in the supply chain forced manufacturers to change plans and production models, for instance, the production of three-seat or two-seat vehicles due to a short supply of seats. Disruptions and unreliability in the supply chain lead to a shortage of materials for production and consequently increases storage costs. Therefore, supply chain disruptions are a core problem and challenges that affect the company’s market share and revenues.
The availability of materials and parts for production is another core challenge for the company. As a result of the lack of components, Polaris changes its plans often on what to manufacture (Tita, 2021). The company has to shift production targets and models as the supply chain and logistics cannot deliver the required components necessary for the manufacture of certain models. According to Tita (2021), the core problem for Polaris was the scarcity of materials and components and the inability to build them. Firms are used to set up backup components and materials to enable efficient production and delivery as well as reduce storage costs (Tita, 2021). The lack of backup materials and parts renders the company ineffective and exposed because they fail to deliver. The scarcity of materials and components became serious to the point the company could not resupply its dealers and customers had to make deposits on orders still in the factory (Tita, 2021). At some point, the company’s dealers went out of stock and customers had to purchase whatever was available. Acquiring or building the right materials and parts was a huge challenge for Polaris and hampered the company’s production and assembly lines.
The Current (in-pandemic) Strategic Approach (Objective, Scope, Advantage)
According to Tita (2021), Polaris initiated mechanisms to make the company self-reliant on the supply of materials and parts that are a challenge to obtain. The objective of the strategy is to reduce the company’s dependence on supply chains to provide most of the materials and components needed for production. The reliance on the supply chain for most components and materials forced Polaris to postpone full production of vehicles or shift plans to production of different models. For instance, with a shortage in the supply of seats the company produces three-seat or two-seat utility vehicles. Faced with difficulty acquiring foam for seats due to a storm in Texas Polaris manufactured vehicles lacking seats while they waited for its availability (Tita, 2021). Among the changes in the strategic approach is avoidance of semiconductor chips utilized in vehicle gauges that the company used before. Polaris acquires readily available semiconductor chips as its engineers restructure the gauges to be compatible with them (Tita, 2021). The adoption of this strategy eliminates the company’s overreliance on the supply chain to deliver materials and components thus avoiding disruptions.
The full production and delivery of vehicles and snowmobiles are constrained because some parts are missing or components ran out (Tita, 2021). According to Tita (2021), due to the lack of some components almost one-third of the vehicles Polaris manufactures endure delays until specific parts are available. Faced with a lack of shock absorbers the company delivered to its dealers some snowmobiles lacking the absorbers to wait for its availability and installation (Tita, 2021). At some point, Polaris halted production of single-seat all-terrain vehicles due to a severe shortage of its shock absorbers and instead shifted plans to the manufacture of a two-seat modification of the four-wheel motorcycles. The company’s current strategic approach has some advantages as is cost-saving, increases production, ensures fast and on-time delivery, reduces operation costs, creates an effective and reliable supply chain and logistics, and gives Polaris a competitive advantage.
Polaris’ current strategic approach could form a Blue Ocean Supply Chain Strategy for the company as it establishes new and reliable approaches within its supply chain that make the competition irrelevant. Polaris is creating uncontested market space by defining ways to avoid supply chain disruptions and consequently ensure unrestrained production and on-time delivery. The company is avoiding dependence on rare parts and restructuring vehicle gauges to function with a variety of semiconductor chips that are easily available (Tita, 2021). Polaris is making the competition irrelevant by going into the blue ocean through the implementation of a new approach that ensures the availability of materials and components and on-time delivery. According to Murray (n.d.), the blue ocean strategy entails altering the conditions of competition by making it irrelevant. The company’s current strategy makes the competition irrelevant as they do not rely on parts that are rare to acquire but instead are redesigning vehicle components to fit with easily available parts. The current approach could form a Blue Ocean Supply Chain Strategy for Polaris as it is based on creating uncontested market space and making the competition irrelevant.
Polaris is creating and attracting new demand through sustained production and on-time delivery enabled by the restructuring of in-house components to match easily available parts thus ensuring a sustainable and effective supply chain. Through avoidance of rare components, the company is establishing a reliable supply chain that ensures effective and efficient production and delivery thus capturing new customers and demand. The implementation of the strategy ensures the supply chain produces constant and sufficient components and materials for all-around production (Tita, 2021). The company is acquiring readily available components than what they used before and redesigning some parts to fit together and work efficiently thus aligning the supply chain to achieve differentiation as well as ensure low cost. Acquiring readily available materials and parts ensures low cost for Polaris while delivering unique vehicles, boats, snowmobiles, and motorcycles manufactured with redesigned components. The company’s current approach ensures efficiency in the supply chain, continued production, new demand, and low cost.
The industry could benefit through the elimination or reduction of some of the factors and also through improvement and introduction of some other factors. The dependence on specific materials and components is a factor the industry could eliminate as there are other alternatives. Through reliance on specific and rare parts, companies end up halting production when faced with a shortage or lack of the parts. The industry could adopt mechanisms to ensure the availability of components through redesigning available materials and parts to fit. Also, the overuse of traditional and unsustainable supply chain practices is another factor the industry could do away with. The decongestion of port and rail is causing inefficiency throughout the supply chain and the industry could devise ways to improve the situation. The creation of extra terminals at ports and the adoption of reservation systems could help ease the congestion problem (Boyd, 2017). Companies within the industry also endure high operating costs for distribution centers that are connected with labor, real estate, and taxes. The industry could introduce factors such as outsourcing labor and logistics to third parties to deal with the operating costs. Disruptive supply chains could be a beneficial introduction in the industry as there is considerable growth and significant opportunities in the direct-to-consumer sector.
References
Boyd, J. H. (2017, August 24). Big Growth, big Challenges. CSCMP Supply Chain Quarterly. https://www.supplychainquarterly.com/articles/1436-big-growth-big-challenges
Murray, A. (n.d.). What is Blue Ocean Strategy? The Wall Street Journal Guide to Management.
Tita, B. (2021, June). For Polaris, Parts Decide What Gets Made. The Wall Street Journal.
