Location Exercise Case study
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University of Manitoba *
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Geography
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Dec 6, 2023
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Location Exercise – Case Study Supply Chain Management Diploma
Logistics and Transportation
Problem
A Shanghai-based telecom firm is considering expanding in North America. The company wants
to build a distribution center (DC) in a strategic location for expansion. It is advantageous if the
DC is close to TransCanada #1 to support sales in Alberta, Saskatchewan, and Manitoba. In-land
ports will be considered since they might act as conveniently accessible storage sites. The
following sections will strategically evaluate and analyze the options in Calgary, Regina, and
Winnipeg.
Cause
The company is considering several factors in determining the placement of its Distribution
Center (DC) in the Prairies:
1.
Geographical Distribution
: The Prairies cover a vast area, and the company needs to
ensure timely deliveries that require strategic placement of the DC to reach all three
provinces.
2.
Infrastructure and Connectivity
: Being near TransCanada #1 is essential for efficient
transportation.
3.
Cost Efficiency and Market Penetration
: This company will need a primary center that
provides reasonable supply chain and logistics solutions that help it access emerging
markets rapidly and develop a strong presence.
4.
Inland Port Benefits
: Inland ports like Centre Port in Winnipeg and the Global transit
Hub in Regina provide benefits, including reduced transit costs, quicker customs
procedures, and integrated logistical services.
Analysis (Alternatives)
Locating the organization from which the company can reach the most customers at the lowest
cost is essential for running a successful business. We must consider all the elements that go into
running the business, including lead times, inventory, and delivery costs.
The figure above depicts the expansive prairies of Canada. The accompanying legend highlights
the major railroad route and the Trans-Canada Highway. And the table below provides detailed
information about the population in the prairies and the distances between key cities, measured
in kilometers.
Figure 1. The Prairies
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Table 1. Population of the Prairie cities and distances between the cities in kilometer’s
CALGARY, ALBERTA
Based on the table, Calgary has the highest population among the three prairies, making it a
prime location for potential market expansion. It offers the largest customer base, situated a mere
294 km from Edmonton and 1000 km from Vancouver. It has a strategic advantage due to its
proximity to Vancouver, a primary port for cargo deliveries. This closeness translates to
significant transportation cost savings from the port of entry to distribution. The eastern side of
Calgary, where the company's target market is conveniently located, allows for a specific
distribution route with many stops for cell phone deliveries, further reducing delivery costs.
In addition, Calgary has a better infrastructure that surpasses that of cities of a similar size, which
complements the city's strategic position and the well-established long- and short-distance
transportation sectors. With the Trans-Canada Highway running east-west, Highway 2 stretching
north-south, and the CANAMEX corridor cutting through, businesses in Calgary are strategically
positioned to access a staggering 50 million consumers within a day's journey via ground
transportation.
Inland Ports Details:
Calgary Region Inland Port
Location: Calgary metropolitan area
Size: 2,800 acres
Rail Access: CN, CP — both CP and CN have set up main terminals
Highway Access: Highway 1, Highway 2
Volume: 822,000 TEUs (rail only)
REGINA, SASKATCHEWAN
Regina has the smallest population of the five sites, as seen in Table 1, yet it plays a crucial role
in the Prairies. This location's proximity to two important national highways—the TransCanada
Highway, which runs from the Pacific to the Atlantic coastlines, and Highway 11, which
connects to the Yellowhead Highway in the north—ensures balanced travel times across the area.
These roads and freight lanes offer seamless links to Mexico and the United States.
The Global Transportation Hub (GTH), a premier facility with quick access to superior rail and
highway infrastructure, is located in the city. The GTH stands out for its quick and easy customs
and inspection processes and effective logistical services. Contrary to congested metropolitan
ports, its strategic position guarantees free-flowing highway access. Furthermore, the GTH's wide double-lane highways are also built for high-volume truck
movements and can accommodate even the longest combination vehicles. As a result of the
efficiency of the design, it allows more deliveries with fewer trucks, reduced fuel consumption,
and lower emissions, ultimately keeping goods affordable for consumers.
Although Regina's strategic location and the GTH have several benefits, it is important to
consider the initial expenses of moving goods from the port of entry to the Distribution Centre
(DC). Regina is a logistically superior and economically advantageous company because of the
city's infrastructure and the GTH's services.
Inland Ports Details: Global Transportation Hub
1,700 acres of serviced land ready for further development
Rail Access: CP
Highway Access: Connections to all major networks including Trans-Canada,
Minneapolis/St. Paul, Chicago and points south and west, including Mexico
WINNIPEG, MANITOBA
Winnipeg presents a significant business opportunity due to its strategic location at the eastern
end of the three prairies. Winnipeg's favorable location at the eastern end of the three prairies
creates a significant business opportunity. This positioning ensures efficient transportation of
products from the Distribution Centre (DC) towards the west, following a consistent route for all
stops. CentrePort Canada distinguishes Winnipeg, the biggest tri-modal inland port in North America,
which covers 20,000 acres and has 3,000 acres available. With some of Canada's biggest carriers,
this port is strategically located just one hour from the United States and serves as a center for
international trucking. The CentrePort Canada Way, built to RTAC standards, facilitates swift
cargo movement, achieving the "five minutes to 55 mph/90kmh" target. Furthermore, CentrePort is a desirable investment location due to its strategic location at the
intersection of many transit arteries, accessibility to skilled labor, affordable tax and energy
prices, and speedy land-development approvals. With its 665 acres, the forthcoming Rail Park
will further improve CentrePort's infrastructure and offer unmatched access to truck and rail.
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With access to international markets and a population of 100 million people within a day's drive,
CentrePort is excellent for companies engaged in international supply chain activities.
Inland Ports Details: CentrePort
Size: 20,000 acres dedicated land. 3,000 acres currently available
Rail Access: CN, CP, BNSF
Highway Access: Connections to all major networks including Trans-Canada,
Minneapolis/St. Paul, Chicago and points south and west, including Mexico
Air Access: Adjacent to the Winnipeg James Armstrong Richardson International
Airport
Solution
After thorough analysis, Regina is shown to be a strategic location in the Prairies despite having
the smallest population among the places considered. Its excellent location close to two major
national highways—the TransCanada Highway, which connects the Pacific and Atlantic Oceans,
and Highway 11, which connects to the northern Yellowhead Highway—ensures efficient and
balanced regional distribution. The Global Transportation Hub (GTH), the centerpiece of the city's peak, provides outstanding
logistical advantages. The GTH has quick customs and inspection procedures, ensuring that
goods move swiftly and without hindrance, in contrast to crowded metropolis ports. Its strategic
location ensures uninterrupted highway access, and its wide double-lane highways, designed for
high-volume truck movements, can accommodate even the largest combination vehicles.
The city is in the middle of the prairie provinces, and it allows for reaching all major target cities
within an 8-hour drive, ensuring swift distribution. The city's inland port development further
strengthens its appeal for import-export operations. The GTH's vision of creating an optimal
transportation network for global supply chains between Asia and North America is a testament
to its forward-thinking approach. Since Regina is in the central location in the prairie provinces, all major target cities are easily
accessible within an eight-hour trip, ensuring swift distribution. The growth of the city's inland
port has increased its attraction for import-export business. The GTH's goal of developing an
ideal transportation network connecting Asia and North America for global supply chains is
evidence of its forward-thinking mindset. Its infrastructure, with direct access to the Canadian
Pacific Rail's (CP) mainline and a comprehensive highway network, ensures seamless
connectivity from coast to coast.
In conclusion, the company should establish their distribution center in Regina, Saskatchewan,
considering Regina's strategic location, unparalleled advantages of the GTH, and the economic
benefits of the province. This decision not only ensures logistical efficiency but also positions the
company for sustainable growth and profitability in the long run.
References
Calgary Economic Development. (2021, February 24). CALGARY: A TOP TRANSPORTATION AND LOGISTICS HUB
. Https://Www.calgaryeconomicdevelopment.com/. https://www.calgaryeconomicdevelopment.com/newsroom/calgary-a-top-transportation-
and-logistics-hub/
CentrePort Canada. (2023). CentrePort Canada
. Https://Centreportcanada.ca/About-Centreport/. https://centreportcanada.ca/about-centreport/
Global Transportation Hub. (2023). Why the GTH? | Global Transportation Hub
. Thegth.com. https://thegth.com/why-gth#location-advantage
Visual Lizard. (2017). Transportation & Distribution | Economic Development Winnipeg
. Economicdevelopmentwinnipeg.com. https://www.economicdevelopmentwinnipeg.com/key-industries/transportation-
distribution
Yeh, K. (2018, February 28). A beginner’s guide to Western Canada’s major inland ports
. Medium. https://karlyeh721.medium.com/a-beginners-guide-to-western-canada-s-major-
inland-ports-f0c119c34a6a
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