Business Case Study #1 - Tools for Trade Tools for Trade (TFT) is a Canadian company that sells high-end, specialty tools made to withstand the rigours of every day use by tradespeople. TFT has been in business for 15 years and enjoys a strong brand recognition and support from the trades. Their head office and main distribution center are located in Calgary, AB What sets TFT apart from their competitors is their commitment to innovation. Over the years TFT invested heavily in research and development (R&D) capabilities and secured a number of patents on the design and features of their tools. TFT is also known for a very high quality of their products. TFT tools carry a "Made in Germany label and come with a 25 year guarantee. TFT uses a fr a franchise retail model with 120 locations across Westem Canada and Ontario. TFT provides i sits franchisees with sales forecasts specific for each location, arranges for transportation, invest in marketing and advertising of their products, and provides a number of other services required to run a successful retail chain. In addition to their retail locations. TFT entered into several partnerships with large industrial firms whom they exclusively supply with their tools. These commercial customers enjoy volume discounts and high level of customer service provided by dedicated account managers. Most recently, TFT started offering their products online for purchase by individual customers. TFT offers to ship its tools free of charge to customer home or a job site. Same day shipping is guaranteed on e-commerce orders placed before noon. This service is currently available to customers located within 60 miles of TFT retail locations as the orders are filled from store inventory. TFT current supply chain operates as follows: The German manufacturer ships in FCL to Canada using the incoterms DAT Halifax. TFT has a cross dock facility in Halifax (operated by a small local 3PL) where the ocean containers are unloaded and orders are processed for distribution Shipments destined for Western Canada are loaded onto 53 rail containers while orders for Ontario stores are shipped by truck. Upon arriving to TFT distribution center in Calgary the rail containers are de-stuffed and inventory is either put away into storage or cross docked again to be shipped to stores on outbound trucks. The distribution center is capable of processing e-commerce orders from customers, however the r he management feels it is still cheaper to ship from stores versus a centralized location. TFT manages its transportation in-house and has agreements with a number of service providers to ensure it its transportation needs are m Given the success of its brand and growing demand for its tools TFT wants to expand its product line to other provinces, and potentially USA. To support this expansion a number of challenges needs to be addressed. TFT hired you to assess the situation, consider alternatives and provide recommendation on the following: 1. All TFT competitors are sourcing their tools from lower cost countries. TFT are considering importing from other countries. Given the current setup of TFT's network, what are some benefits and concerns of a change in sourcing? What criteria may be used to evaluate these new vendors? 2. The current cross-dock facility in Halifax is at capacity and TFT is considering a second cross dock operation in Westem Canada. Fearful of the Halifax 3PLS inability to expand TFT is considering opening its own cross dock. Shall TFT pursue this option or work with the Halifax 3PL to facilitate the expansion? 3. Customers are increasingly demanding shorter lead times and exceptional service. Given the different customer segments TFT serves (individual consumers, commercial users and franchisees), should TFT create one single service model, or practice segmentation? Explain each model and justify your recommendation in detail