PLAZA: THE LOGISTICS PARK OF ZARAGOZA Harvard Case Solution & Analysis


Background: PLAZA was the brand new park located near Zaragoza, Spain, which provided the facilities for different businesses around the country with major focus on supply chain and logistics facilities. The company granted the area to different business participants and connected with the international organizations for the supportive ideas to grow in the future.

Case Analysis: The company went through the estimated cost activities for analysing the cost advantages and disadvantages. In this case, the supply chain process had taken place to review the distribution and warehouse cost activities from supplier to destination. The results were quite favourable to PLAZA as it showed less cost to be implemented during the process. Zaragoza was considered to be the most favourable place for PLAZA and could produce even cheaper cost activities according to the demand of logistic business in Spain.

Recommendations: It has been analysed that the company should review the external economic threats and government intervention that can hinder the overall performance as well as the advantage to open the business in Rotterdam as it will reduce the additional cost of shipment and allow to transfer the material from Zaragoza to Rotterdam by road.

Keywords: Zaragoza, Rotterdam, PLAZA, Supply Chain, Safety stock, Transportation, Inventory.

Summary of Case

PLAZA was one of the most successful companies for its project of Logistics Park in which majority of business entities had been offered to run their distribution channels where the majority of shareholders were represented by the Government of autonomous community group. The company was engaged in quality research and teaching institution since 2003 and increased the awareness of supply chain activities across the region. However, it has been decided by Garcia (a forwarding business analyst) to review the difference of two regions in the Europe (Rotterdam and Zaragoza).

PLAZA was established near Zaragoza and was expected to analyse the cost activities with other regions. On the other hand, the overall results show that the company had an advantage for operating in Zaragoza as it was determined that the total cost of port, transportation as well as inventory cost was relatively lower than the region of Rotterdam. However, some recommendation shows that if the company will open its project in Rotterdam, then it will be more advantageous for it because in that case, the additional cost will not be charged for shipment directly to the Rotterdam.

Therefore, the company will transfer the inventory material by roads and attract the potential logistic businesses to be involved in the area of PLAZA. It also indicates that there are some external threats to fluctuate the cost of distribution like government intervention or high duties and tariffs of import, which can hinder the cost efficiency to operate in the economy.

Case Analysis

The analysis conducted from the case shows the importance of cost matters in logistic industry and also determined different possibilities to handle the cost and to provide proper valuation for the company in order to offer acceptable prices to the end users. Here are some assumptions collected by Plaza for costing the entire logistic scenario.

First of all, there are two ways to assume the cost of shipments from port to warehouse in Europe in which two options have been determined to value the total cost. Option 1 indicates the distance between Rotterdam and Distripark, which had collected the imported materials from china, whereas option 2 determines the distance covered between Barcelona and PLAZA..................

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