Increased visibility also helps operators manage the workforce in the warehouse. Operators can log into the system to see what is headed for the warehouse and when it is expected to arrive so they can schedule the appropriate labor.

Penske’s local presence in Mexico adds to the service level, allowing its team to be more focused on local sourcing, quality and safety. Penske Logistics currently employs more than 4,500 associates in Mexico and has decades of cross-border operations experience. Penske Logistics maintains significant investments in the region, including strategic locations along the border.

Throughout Penske’s relationship with the manufacturer, Penske has adapted its people and processes as changes occur at the facilities and on the production line.

As more organisations recognise the need to collaborate, a whole new culture is evolving. This is why collaboration has become such a familiar buzzword in the supply chain world. But true collaboration is not an easy state to arrive at. Boundaries of mistrust must be broken down and conflicting objectives must somehow be transformed into aligned goals.

In an ideal world, every agency involved in turning raw materials into goods, selling them, and distributing them to business customers or consumers would collaborate, thus maximising supply chain cost-effectiveness and reliability. As yet though, that degree of collaboration is more likely to be the exception than the rule.

According to U.S. Industry and Trade Outlook, published by The McGraw-Hill Companies and the U.S. Department of Commerce/International Trade Administration, wholesale trade includes establishments that sell products to retailers, merchants, contractors and/or industrial, institutional and commercial users.

As you probably know, manufacturers produce products and retailers sell them to end users. A can of motor oil, for example, is manufactured and packaged, then sold to automobile owners through retail outlets and/or repair shops.

Vehicle operating costs per km are set to be just half the normal cost for trucks and airplanes. This more accurately models the process where Zara pays for one-way shipping containers to move products from one facility to another without paying the full round-trip cost (carbon per km was also adjusted to half of normal for the same reason). This compensates for the model logic which calculates vehicle costs based on the round trip distance instead of the one-way distance.

Zara stores in a single city are represented by a single store that combines the demand of all stores in that city – not all cities are included and more cities can be added to this model.

Because Zara is a private company, specific details of the Zara business model and supply chain can be difficult to verify. Yet the supply chain model presented here is still a useful picture of the Zara supply chain and illustrates its operations and its capabilities.