Service level improvement opportunities for the Vendor Managed Inventory at Jindal Films: recommendations for improved demand forecasting, inventory management, and tool performance

Abstract

Jindal Films is a company that produces plastic films for numerous labelling and packaging applications. The company offers VMI contracts to some of its customers, which give them the responsibility to manage product inventory and to replenish stock. The company faces some problems to manage efficiently the process. These problems are notably the incompatibility of some of the items with the VMI concept, the high inventory level due to poor customer’s forecasts and the out-of-date computer program. Therefore, the VMI system was reviewed. The first step was to classify and to group the items depending on the level of compatibility with a VMI in order to suggest alternatives for the bad ones or new inventory management policies for the others. Before running simulations for inventory management policy, an evaluation of the accuracy of the forecasts sent by the customers was performed. New forecasting methods were then tested to improve the forecasted demand. Based on these new forecasts, simulations were carried out, with the aim of reducing the inventory level. This was indeed the case but for only a limited number of products. Finally, computers tools requirements were established and general recommendations on the VMI concept were provided to Jindal.