MRO Safety Stock Planning
Safety stock is a service-risk decision. For MRO items, demand variability is only one part of the answer; criticality and supply recovery can matter more.
Separate lead-time demand and uncertainty
Expected lead-time demand covers normal consumption while a replenishment order is in transit. Safety stock protects against demand variation, lead-time variation, and forecasting error. A reorder point combines the two.
Classify by consequence
Critical spares for safety, environmental, bottleneck, or long-recovery failures should not be managed solely through a normal-demand formula. Consider installed base, failure mode, repairability, supplier risk, and alternative sources.
Validate the data
Intermittent issue history can produce misleading averages and standard deviations. Clean duplicate issues, project draws, substitutions, and obsolete demand before parameterizing a model.
Review policy, not just quantity
Specify review interval, reorder trigger, emergency sourcing plan, preservation requirements, shelf life, and ownership. A correct quantity stored incorrectly still creates downtime risk.
Related tools
Use safety stock, lead-time demand, reorder point, and MRO inventory formulas.