Application of S&OP and VMI to Reduce the Overstock of Finished Products in a Textile Company: A Case Study (#2261)

Authors

Marin Manco, Vannia Alexandra

Vera Peña, Robert Luisaurelio

Aparicio Lora, Victor Ernesto

Abstract

In the textile sector, managing finished product inventories is crucial to ensure profitability and operational efficiency. This article focuses on reducing the overstock of finished products in the domestic line. The importance of addressing this problem is highlighted mainly to reduce the loss of utility in the domestic line. Through a detailed study of the case of the company Textil El Amazonas S.A., it is analyzed that this problem has a negative economic impact of S/ 2,512,067.3 caused mainly by poor production planning, poor inventory management and error in the amount of yarn production. Based on this, it is proposed to reduce the first, second and third causes with the implementation of the Sales & Operation Planning (S&OP) methodology and the second cause with the implementation of the Vendor Management Inventory (VMI) methodology. With the application of these methodologies, it is expected to reduce the technical gap proposed in the research by at least 13%. Likewise, it is intended to reduce the average absolute deviation of the demand forecast by 15% of the current one. Finally, it is expected to increase the inventory turnover rate and the ERI indicator.