For this global industrial manufacturer of vehicles and engines, production depends on exceptional and reliable service throughout the supply chain. When the manufacturer was looking for a partner to manage its distribution centers, it sought a company familiar with the challenges of automobile supply chain management and decided on Penske Logistics. Penske has managed inventory in two of the manufacturer’s facilities in Mexico since 2002.
Inventory visibility is crucial. Warehouse inventory has to be able to interface with the production side of the business and they have to be able to connect within the supply chain to know what is in the warehouse and what is on a truck or stored in a trailer.
Dave Bushee, vice president of logistics technology, Penske Logistics
As part of its work, Penske manages one 150,000-square-foot internal distribution center and one 400,000-square-foot external distribution center. It provides receiving, storage, sequencing, kitting and repacking. Penske handles large parts and modules as well as shipping racks and the trailer yard. Penske also designs and produces the material sequencing racks in-house, saving production space and reducing downtime.
The actions inside a distribution center are the catalyst for speeding deliveries, managing inventories and cutting costs. Penske’s proprietary technologies track the flow of inventory through and around the distribution center, monitor product velocity, and provide advance notice of arrivals. Since coming on board, Penske has focused on reducing and controlling inventory, improving the receiving area and boosting productivity. Penske leverages a data repository that provides a single, high-level, comprehensive view of the manufacturer’s overall operations, which allows the team to increase efficiency. Information about incoming and outbound products can be transmitted electronically between supply chain partners, and the information is automatically loaded into the core system.
Greater visibility into what is happening in the supply chain and when it takes place is essential to operational success. Penske created a series of checks and balances that allows Penske associates and the manufacturer to drive accuracy. The information is presented in a timely manner, which allows the manufacturer to quickly identify a problem and act when something is not correct.
Logistics and supply chains often offer the biggest opportunity to reduce costs and increase efficiency. For many companies, better decision making can lead to cost reductions by up to 40 percent. Over the years, through automation and process improvement, many organizations have managed to reduce human effort but in order to achieve true results.
The data gives users the opportunity to track a product from the initial receipt to the final pick down to the individual SKU, ensuring a quick response in the event of a recall or a spike in demand. Visibility also helps optimize door-to-door movement in the warehouse yard, and the system can track where trailers are as they move or are parked for later processing.
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.
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.
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.