Analysis of CFC's Global Logistics and Distribution Network Case Study

This case study analyzes the global logistics of Centennial Furniture Company (CFC), a Canadian manufacturer of lecture podiums. The assignment examines CFC's current distribution network, focusing on its partnership with Regina DC and the associated costs. It explores both qualitative and quantitative aspects, including airfreight rate comparisons and modal strengths and weaknesses. The study recommends strategies to reduce costs and improve efficiency, such as using a single distributor for direct delivery to retail stores and optimizing transportation methods. The analysis also considers the benefits of air transportation for timely delivery and a flexible supply chain. The study is supported by references to academic literature on supply chain management and logistics.

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Global Logistics Case
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Global Logistics Case
Introduction
This is a case study of CFC, a Canadian company seeking to address its distribution
network. The company has contracted Regina DC to deliver podiums to several boutique
furniture shops in the country. Regina DC offers $31.50 for handling and storage per unit per
month. Here, CFC is considering how to reduce its costs and still remain competitive and
efficient.
A: Analysis of the current transportation system
Qualitative review
It is important that CFC considers reducing its expenses in the distribution channel. It
should also address partner with Regina DC to deliver its products directly to actual retail stores
to avoid offloading, storage and handling costs which are likely to be transferred to CFC. This
will improve efficiency and save costs. According to Hugos (2018), expenses for firms arise
from carrying, handling, and storage costs. The author believes that to achieve a flexible
distribution channel, it is reasonable that a firm looks at areas that it incurs expenses or some
inconveniences (Bakulich, Musatenko, & Samoylenko, 2016). Therefore, given that CFC wants
to reduce costs, the firm should have only one distributor who delivers goods directly to retail
stores. This will help the firm avoid damages or quality interference in its supply chain. Looking
at the current situation, the products of CFC are handled by two distributors before it reaches
retail stores. This is likely to tamper with quality and increase storage costs. Nonetheless, if CFC
only hires the services of Regina DC, it will have ground to minimize its transportation costs.

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Also, the firm will achieve efficiency since it would have eliminated delays experienced during
offloading at Regina DC and loading by LTL carriers. This will mean that CFC’s products will
be delivered to the market timely.
Quantitative review
Comparing airfreight rates
Airfreight Rates
from (YYZ
Winnipeg Ottawa Regina Edmonton
1-44 kg $1.69 $1.18 $ 1.88 $ 2.25
45-99 kg $1.50 $1.50 $1.66 $1.99
100-299 kg $1.36 $0.98 $1.51 $1.81
300 kg & over $1.18 $0.82 $1.31 $1.57
Given the above airfreight rate, Regina DC is relatively more expensive than other
distributors like Ottawa. However, the difference is not significant and given that the company is
established, CFC should continue hiring its services. Also, Regina offers a flat rate of $31.50 for
handling and storage per unit per month, which to some point makes it a considerably cheaper.
Transporting in bulk will be cheaper. For instance, if CFC transports 300kgs it will cost it:
300kgs by $1.31= $393
Plus storage and handling cost it will be $393+$31.50= $424.5.
This is likely to be affordable and given that CFC has been hiring the services of the
distributor, there is no need of terminating their engagement. In essence, using a third-party to
distribute products is a common practice in many companies. Given the case study of Centennial

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Furniture Company (CFC), it is recommended that the company lets go LTL carriers to retain a
single distributor to serve Manitoba, Alberta, British Columbia and Saskatchewan among other
locations directly. Also, delays suffered during offloading Regina DC can only be eliminated if
the firm deals with a single distributor like Regina DC.
Modal Strengths and Weaknesses
Air transportation is the modal used mostly to deliver products directly from Gatineau
DC. Air transportation is fast, has many routes and can deliver high-value cargo without
damages (Azadian, Murat, & Chinnam, 2017). On weaknesses, this mode can experience aerial
currents which can be challenging sometimes. Also, it is not flexible in some scenarios because it
only lands at a designated airport. It may sometimes be costly compared to other modes of
transport. More importantly, it is recommended that CFC uses air transportation. Given that CFC
can deliver its products considerably in bulk, it should consider using air transportation which
has unlimited access to some of its markets instead of other modal choices with limited reach and
slow speed (Wang, Zhuo, & Niu, 2017). Air transportation can deliver CFC’s products to a
strategic location for retailers to collect and sell to the final consumers. It shall reduce delays in
delivery and ensure a steady or agile supply chain which will ultimately bolster CFC’s
competitiveness and minimize costs such as storage and handling.

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References
Azadian, F., Murat, A., & Chinnam, R. B. (2017). An unpaired pickup and delivery problem
with time dependent assignment costs: Application in air cargo transportation. European
Journal of Operational Research, 263(1), 188-202.
Bakulich, O., Musatenko, O., & Samoylenko, E. (2016). Analysis of the efficiency indicators of
cargo delivery distribution system. Technology audit and production reserves, 3(2 (29)),
40-44.
Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.
Wang, F., Zhuo, X., & Niu, B. (2017). Strategic entry to regional air cargo market under joint
competition of demand and promised delivery time. Transportation Research Part B:
Methodological, 104, 317-336.
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