Virtual pooled inventories for equipment-intensive industries. An implementation in a paper district

Inventory pooling occurs when different actors share their inventories with the aim of reducing costs while improving performances. The paper-making industry requires large amounts of ready to install spares aimed at assuring high availability, but presents the drawback of excessive inventory costs. Pooling inventories, with the support of appropriate IT solutions, can be considered an effective strategy to improve availability while reducing the total costs. In the present work a real-life implementation within an important Italian paper-making district has been successfully carried out. Throughout the study the most recent theoretical models have been adapted after a methodical analysis that has been devoted to allow the identification and of the most significant issues and the building of a wide and solid agreement among the participants. Indeed, this required a thorough investigation, since the involved actors are generally competitors and only agree to pool inventories if this leads to increasing profits for themselves.

► The theoretical models for virtual inventory pooling have been thoroughly investigated.
► A technical inquiry allowed the evaluation of the parameters needed for the VPI to work correctly.
► The study determined the optimal stock level for each company to grant the required service level.
► The approach increased the strength of the pooling system with respect to the suppliers of spares and equipments.
► Significant outcomes are the shared purchasing of costly equipments and the increased standardization of components.