Plaza, the Logistics Park

of Zaragoza

Presented by-
Shubham Mahore 18PGP182
Vedant Wasnik 18PGP213
Vishal B Pawar 18PGP218
Avinash Topno 18PGP230
Ranjith kumar 18PGP231
About Plaza
 Aim : To become the largest logistics park in Europe.

 Situated in the outskirts of Zaragoza, Spain.

 Plaza project was presented first time by the Government of Aragon in 2000.

 Officially opened for business on October,2005.

 Largest logistics part in Europe with total surface area of 12,826,898 sq. m. and investment over $19 million.

 Hosted ZLC(Zara Logistics Center) with the objective of using logistics park as a laboratory to experiment with
new logistics process, concepts and technologies.
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Company Background

 Plaza was a mixed public and private company.

 Majority shareholder of the company was the Govt. of

the Autonomous Community of Aragon(CAA).

 The part intention behind developing Plaza was to

prevent companies from leaving Spain.

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Q1. Calculate the total relevant costs of each option for a park
customer.
Total costs for each option :-
(for all the calculations the excel sheet is attached)

Rotterda Zaragoz
Cost Summary m a

Total Shipping Costs 530.8 0

Total Costs of Transport from Port to

Warehouse 613.2 1613.3
Microsoft Excel
Total Inventory Costs 4183.0 3001.2
Worksheet
Total Cost of Delivery from Warehouse to
Customer 1133.3 2509.5

OVERALL COSTS 6460.3 7124.0

Q2. How would the customer's conclusions change if the following assumptions
changed:
(i) Demand was more/less uncertain
(ii) The number of units per container changed
(iii) The service level increased
(iv) The product cost increased/decreased

DEMAND UNCERTAINITY
NO. OF UNITS/CONTAINER CHANGED
 Increase in variability in demand reflects that reorder  Increasing in number of units increases the
point and safety stock will be higher. Deviation in overall costs
demand is directly proportional to safety stock (affect)
level at warehouse. This would increase inventory
holding cost and then overall cost.

SERVICE LEVEL INCREASED

VARIATION IN PRODUCT COST  Increase in service level means increase

 Variation in product cost would be directly
proportional to overall cost
in safety stock and this in turn means
increase in inventory holding costs. The
costs are higher for Rotterdam than
Zaragoza , so if we increase the service
level it would be good for Zaragoza,
which would lead to holding more 5
inventory at approximately same cost
as that of Rotterdam.
Q3. What other issues (besides the one presented) should the customers
take into account?

ISSUES / ADVANTAGES :

 Plaza is run by government it will improve customer confidence over other competitors.
 Inventory holding cost of Zaragoza is less than other port, areas and Rotterdam.
 Plaza has access to area around it and has facilities for operating offices, the customers can open offices or
other logistics operations near Plaza for easier access.
 Lead time of Plaza is greater than Rotterdam since it is located further from Central Europe than Rotterdam.

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Q4. What opinion would you have about setting up more than one DC to
cover Europe ?

Zaragoza Rotterdam

 The inventory holding costs and all the added
facilities and services that Plaza offers makes it a
better option than Rotterdam.
 If the company policy is that of keeping high levels of
inventory and safety stock, and it faces uncertain
demand, Plaza would be the better option
 Rotterdam has the advantage of being closer to
central Europe.
 In case of any transport-related problem, Rotterdam
would be in a better position to timely deliver
products to central Europe.
 If the company operates in a JIT mode, then
Rotterdam would be better

OPINION :

 Company can operate the two different strategies mentioned above and keep a massive warehouse at Plaza, and
a small one in Rotterdam.
 Instead of shipping directly to Rotterdam, all the inventory should be unloaded at Plaza,
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and then transported to Rotterdam
Thank You