Integrated Logistics: Sourcing and Cross-Docking for TFT

This report examines the integrated logistics of Tools for Trade (TFT), a Canadian company. It analyzes the benefits and concerns of changing sourcing strategies, including access to high-quality materials, cost savings, and potential regulatory issues. The report recommends that TFT consider setting up its own cross-docking facility in Western Canada to reduce transportation costs, improve product quality, and speed up delivery. Additionally, it suggests implementing a single service model to streamline logistics, reduce lead times, and enhance customer service. The report concludes by emphasizing the importance of evaluating suppliers based on various criteria and highlights the advantages of the recommended strategies for optimizing TFT's supply chain.

Running head: INTEGRATED LOGISTICS
Integrated Logistics
NAME OF STUDENT:
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Executive Summary
TFT is a successful company owing to the high quality of the product and quality of service it
offers to the customers. The success and popularity of TFT can be attributed to the effective
supply chain and logistics management approach which are undertaken by TFT in order to
ensure that their products are readily available to their customers. The company can consider
sourcing their products from other locations as there are various benefits associated with it but
the company also needs various concerns which are associated with it. It is also recommended to
the company to set up their own cross docking facility in order to increase their efficiency. It is
also recommended to TFT to implement the single service model for reducing the lead time the
products to the customers and also for increase customer service experience.
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Contents
Executive Summary.........................................................................................................................2
Contents...........................................................................................................................................2
Introduction......................................................................................................................................4
Discussion........................................................................................................................................4
Summary and conclusion.................................................................................................................7
References........................................................................................................................................9
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Introduction
The current report focuses on the benefits and concerns which are associated with a change in
sourcing of the company so that the company can take an ultimate call regarding the sourcing
strategy of the company. The current report also focuses on the advantages which are associated
with setting up of own cross docking facility by the company and the report also focuses on the
basis of recommendation of single service model for effective and productive company results.
Discussion
1. There are various benefits and concerns which are associated with change in sourcing for
a company. The benefits which are associated with change in sourcing are as follows:
 The main benefit which is associated with a change in sourcing is access to high quality
raw materials and technology for a company which can help in enhancing the quality of
products and services of a company.
 As stated by Gupta, Singh & Suri (2018) another benefit which is associated with
changes regarding sourcing strategy is cost savings, which enables a company to
implement cost leadership strategy in order to increase their profitability.
 As stated by Karagöz&Akgün(2015) another benefit which is associated with renewed
sourcing strategy is greater availability of potential suppliers for the company from whom
they can source their raw materials.
 Another benefit which is associated with revamp in the sourcing strategy of an
organization is increasing manufacturing capabilities for the organization which can help
in enhancing the profitability of a company.
 As stated by Kulinska(2016) the other benefit which is associated with modifications in
sourcing strategy is access to cutting edge research, design and specialized knowledge for
a company which can help in improving the operations of the company which can in turn
lead to enhanced organizational performances.
Apart from benefits, there are various concerns which are associated with a change in sourcing
for a company which are described as follows:
 According to Prokopovic, Prokopovic&Jelic(2016) one of the main concerns regarding
change in sourcing for an organization is change in rules and regulations regarding
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sourcing of raw materials which can impact the profitability of the company and the
availability of raw materials.
 Another concern which is associated with a change in sourcing strategy is differences in
technical and industrial standards of the new products of the company which may not
fulfil the quality standards expectations of the company.
 As stated by Mandal, Bhattacharya, Venkateswara&Sarathy(2017) another concern
which is associated with modifications to sourcing strategy is complicated documentation
requirements for cross border requirements which may increase the time regarding the
sourcing of raw materials and also tends to increase the lead time creating a shortage of
products of the company in the market.
 As stated by Mohammadreza (2018) another concern which is associated with changes to
sourcing policy is changes in political, economic and legal scenario of the new sourcing
location of the company which tends to impact the profitability of the company.
As stated by Shinkevich et al. (2016) the criteria which can be used for evaluating the new
vendors for the company belonging from other location are sustainability practices which are
followed by the new vendors, the number of years in business for the new vendors, the
quality and standards of the products in comparison to set prescribed industrial standards,
substantial catalogue of products or range of services which are offered by the vendors, the
ability of the new vendors to constantly supply products and services to the company, prices
offered by the new vendors, the customer service offered by the new vendors, the delivery
time taken by the new vendors and the terms of business which are put forward by the new
vendors.
2. As the current cross dock facility in Halifax is at capacity, TFT should focus on opening
its own facility in Western Canada as it offers an ideal expansion opportunity for the
company. There are several other benefits which are associated with the setting up an own
cross docking facility for the company in Western Canada which are as follows:
 By setting up an own cross docking facility in Western Canada, TFT would be able to
save transportation costs and also be environmentally friendly in nature as the
transportation will have fuller loads for each trip.
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 By setting up an own cross docking facility in Western Canada, TFT can ensure the
faster transportation of their products to their customers and the markets as products
of the company can move quickly.
 As opined by Xia & Liao (2016) by setting up an own cross docking facility in
Western Canada, TFT will be able to reduce materials handling which are associated
with the products of the company.
 By setting up an own cross docking facility in Western Canada, TFT will be able to
reduce labour costs as there is no packaging and storing involved after the setting up
own cross docking facility.
 As stated by Zhou & Wang (2016) by setting up an own cross docking facility in
Western Canada, TFT will be able to eliminate various time consuming practices in
the operations of the company such as pick-location or order picking.
 By setting up an own cross docking facility in Western Canada, TFT will be able to
reduce the overall distribution costs which are associated with the products of the
company as the products destined for a similar end point can be transported as a full
load.
 By setting up an own cross docking facility in Western Canada, TFT will be able to
improve the quality of the products of the company as it will be easier for the
company to screen product quality.
 As opined by Forslund(2015) by setting up an own cross docking facility in Western
Canada, TFT can ensure the high turnover of the products, as every product of the
company can move through the own cross docking facility of the company in a very
quick span of time.
 According to Qadir& Ali (2017) by setting up an own cross docking facility in
Western Canada, TFT can ensure cost savings as it is comparatively less expensive to
build their own cross docking facility than to construct an own warehouse.
3. As stated by Bielecki&Galińska(2017) in order to ensure shorter lead times and to provide
exceptional services to the customers of the company, TFT should focus on creating a single
service model for all the customer segments they serve which includes individual customers,
commercial users and franchises rather than practicing segmentation. As stated by Chandra,
Ghosh & Srivastava (2016) the single service delivery model is the ideal model for the company
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as it aims for excellence in the integrated logistics management of the company where the
account managers act as the single point of contact in the single service model. The single
service delivery model of the company will help in reducing lead time of the company which
will enable the company to deliver the products to the customers in a quick span of time. As
opined by Alkhatib, Darlington & Nguyen (2015) the single service model of the company will
help in streamlining all the logistics and supply chain of the company which will help in
increasing the efficiency of the company. The single service model of the company is more
effective than using different models for different segments of the company as by practicing
segmentation, the company will not be able to ensure complete visibility in the supply chain of
the company. As stated by Costa Mesa (2018) upon adopting the single service model the
company will be able to increase order frequency, improve communication process with the
suppliers of the company, reduction in time involved with gathering parts of inventories of the
company and also will be able to consolidate the suppliers of the company which will enable the
company to reduce lead time and provide exceptional services to the customers.
Summary and conclusion
From the above report it can be stated that the approach towards logistics which is being adopted
by the company is integrated and effective in nature. From the above report it can be also be
concluded that the company can considering a change in sourcing as it has various benefits such
as access to improved raw materials and technology, reduced production costs, access to cutting
edge resources, increase in manufacturing capabilities and greater source of suppliers, but at the
same time the company must also take notice of the concerns which are associated with change
in sourcing such as change in rules and regulations related to sourcing, non-compliance with
industry standards, greater complications regarding documentation and change in political,
economic and legal environment. The company should adopt various criteria to evaluate their
suppliers such as quality of materials, sustainability approaches, terms of business, years in the
market, availability of raw materials, compliance to industry standards and financial
performance. The company should also consider setting up their own cross docking facilities in
Western Canada as it offers the company various advantages such as reduction in labour costs,
reduction in transportation costs, reduced lead time, reduced warehouse space, reduction in need
for storing products and improvement in the quality of the products. In order to reduce the lead
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times with the products of the company, the company should focus on using single service model
instead of separate platforms for different customer bases, as the implementation of the single
service model will help in streamlining all the supply chain and logistics operations of the
company, improve communication between suppliers, increase in order frequency, consolidation
of the suppliers of the company and reduction in time involved with gathering parts of
inventories.
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