Penske And Distribution Center Management In The Steel Industry


A U.S.-based international company that develops, manufactures and distributes metals was looking at ways to improve its responsiveness to local customers and grow its business in China. Its products include high temperature (iron-nickel-cobalt base,) stainless, superior corrosion resistant, controlled expansion alloys, ultra high-strength and implantable alloys, tool and die steels and cast / wrought titanium alloys.

Innovative and wholly dedicated to its customers, the company is constantly seeking to increase its global manufacturing capacity and expand operations to provide cutting-edge turnkey solutions.

Prior to working with Penske, the company had been direct-shipping goods from the U.S. to China for many years. Challenged with the need to introduce greater flexibility in order to better serve its local customers, as well as a need to meet specifications and maintain consistently high quality products, the customer sought a partner who could help with both. The company selected Penske for its knowledge of the local market, as well as its legacy of quality and commitment to fostering environments of continuous improvement.

Customer's Challenges

  • Expanding reach and growth in China
  • Maintaining specialty steel inventories closer to customer base in a new market
  • Transporting and delivering products to local customers quickly and to customer specifications
  • Managing inventory and shipping costs
  • Responding faster to customer orders
  • Ensuring high levels of product and customer service quality
  • Gaining knowledge and expertise in the local market quickly

Penske's Solutions

  • Warehousing in bonded logistics park
  • Custom product-cutting, finishing and documenting
  • Dedicated project manager and specialized team
  • Domestic / international sourcing, negotiation and procurement of equipment (for example, forklifts, tools, heavy crane equipment)
  • Warehouse management for specialty steel products
  • Custom order management, including weighing, repacking, labeling, cutting and scanning steel and other customer orders to spec
  • Bonded transportation and domestic distribution in China
  • Import coordination and customs clearance
  • System linkage between customer and China Customs IT system

Results Delivered

Penske developed and deployed an integrated DCM / TM strategy to help establish a high quality local distribution presence for this customer. This included in-country, bonded warehousing space and local help to manage and supply it. Penske's market knowledge saved the customer 27% on equipment purchase prices relative to the budgeted amount.

Penske helped the company ensure high quality product delivery in China by achieving its AS9120 (Aerospace Distributor) certification there. It did so by meeting a series of rigorous standards rooted in careful documentation, for which it received a score of 100%. Doing so ultimately helped play a major role in enabling the customer's global network.

On an ongoing basis, Penske now provides certification and training for all associates, fostering an overall 'safety first' mentality, and serving as the company's final point of contact. Moreover, Penske's culture of excellence and hiring high-quality individuals has created a dedicated team who continues to meet or exceed the customer's monthly key performance indicators (KPI) expectations.

Ultimately, Penske has reduced this customer's lead times from six or more weeks to a mere few days. With our help managing goods, inventory and orders to its local Chinese customers, this customer's China business grew by 40% in year one alone.