Optimizing Logistics for Centennial Furniture Company: A Case

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Centennial College *

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403

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Industrial Engineering

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Jun 13, 2024

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docx

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Global Logistics case study – Centennial Furniture Company (CFC) The Case Study document must contain a cover page with team member names clearly noted and be in a word processed format. Hand written documents will be graded as zero (0). Assignment received after the due date, without prior permission, will receive a grade of zero. This is a team assignment. Assignments completed by individual students, without prior permission, will also receive a grade of zero. Any questions or concerns are to be addressed with the course Professor as soon as possible. You are an independent supply chain consultant that has recently been hired by Rami Alsaidi, the Director of Operations for Centennial Furniture Company (CFC). You have been hired to assist in evaluating their current Logistics and transportation system, making recommendations on a specific set of challenges and opportunities CFC is experiencing. CFC is a Canadian owned and operated manufacturer of lecture podiums. The podiums are marketed specifically to universities, colleges, schools and education institutions CFC has been in business since 1996 and has only ever sold to the Canadian marketplace. This year, CFC estimates they will surpass their highest ever year in terms of units sold and is now reaching the assembly capacity of their current space located in Toronto Ontario. CFC manufactures only one premium full size podium with raised top offers stylish design and utilitarian construction, making it a great choice for shared or public use. This type of sturdy, portable fixture is ideal for use in auditoriums, classrooms, and offices. Sales are done entirely through a network of small boutique high-end furniture shops across Canada. This strategy fits well with CFC’s limited assembly capacity and keeps the organizational identity of a small, premium, niche brand that CFC is looking to maintain. Because of this distribution network, CFC typically only ships to major cities that would have boutique furniture shops. The entire operation is run from their Toronto Ontario facility. Rami has been challenged by the CEO to find cost savings or service improvements in CFC’s logistics operation. Competition is increasing and although CFC’s podium is known for their quality and customers are willing to pay a premium for the podium, other manufacturers are creeping into the premium category and this places risk on future demand. As a strategy, the CEO has asked Rami to investigate any opportunities that may exist that will not compromise the quality of their product or delivery service. CFC has hired a third-party distribution centre (DC) in Regina SK to serve locations in British Columbia, Alberta, Saskatchewan, and Manitoba. From Toronto, CFC services the other provinces (Ontario and East) directly using LTL service. The Podium are placed in an unmarked corrugate carton for shipping. Each carton measures 85 cm in length, 35 cm in width, and 60 cm in height. Each finished carton weighs 15 kg (which includes the weight of the podium, storage bag and external carton). Podiums are palletized on standard 48 x 40 wooden pallet (weighing 30 lbs.) and shrink wrapped prior to shipping. Units may be stacked three high for transportation or storage. The engineering team does not recommend double stacking of pallets. Currently, CFC uses a single carrier for their shipments to the Regina DC and is charged as per the rates in Appendix A. Outbound from the Regina DC to actual retail stores is done by LTL carriers, managed by the Regina DC and charged directly to the receiving store. When a truckload is received, the Regina DC requires one day to unload and place the units into storage

and then commits to having any units picked the same day they are required to ship to any location. The transit time to Regina for Truckload service is four days. The Regina DC is currently only accepting full loads however they are willing to take lower quantities if required. The Regina DC charges a flat rate of $31.50 for storage and handling per unit per month. The same national carrier for shipments originating in Toronto ships orders placed from stores served by the Regina DC via LTL. All TL and LTL loads must be palletized for shipping and the minimum order quality is one pallet. Rami was able to obtain the LTL rates that are currently being used (see Appendix A) Challenges 1. Rami would like you to review the current transportation system specifically for the locations served by the Regina DC. Rami is curious to understand the trade-offs between using the Regina DC versus potentially shipping direct as they do from Toronto warehouse to the Central and Eastern locations. Your analysis must include both a qualitative and quantitative review of the current distribution system and you must make a recommendation on the continued use of the Regina Distribution Centre. 2, There would be several modal choices available to Centennial furniture company for shipping direct exit Toronto. Research each modal selection and clearly identify the strength and weakness within each mode or combination of modes chosen. Transit times as well as costing may impact modal choices and are to be included in the modal justification based on your independent research. Distance (miles) 0-999lbs 1,000 - 1,999lbs 2,000 - 3,999lbs 4,000lbs & over 0 - 99 $70.00 $56.00 $44.80 $35.84 100 - 199 $75.00 $60.75 $49.21 $39.86 200 - 399 $80.00 $65.60 $53.79 $44.11 400 - 799 $85.00 $70.55 $58.56 $48.60 800 - 1199 $90.00 $75.60 $63.50 $53.34 1200 - 1799 $95.00 $80.75 $68.64 $58.34 1800 - 2399 $100.00 $86.00 $73.96 $63.61 2400 - 2999 $105.00 $91.35 $79.47 $69.14 3000 - 3999 $110.00 $96.80 $85.18 $74.96 4000 - 4999 $115.00 $102.35 $91.09 $81.07

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