The company designs and assembles large-scale isostatic press systems, across both stan-
dardized and highly customized configurations, managing an assortment of over 50 000
articles that range from standard fasteners to multi-ton steel forgings. Because production
is organized around project deliveries, demand is triggered by project schedules and sales
forecasts rather than continuous output.
Many articles, particularly those tied to engineered-to-order projects, are consumed only
a handful of times over several years, leaving insufficient historical data for traditional
statistical inventory models. The same warehouse simultaneously supplies aftermarket
spare part operations, where demand is largely unpredictable, compounding the challenge
of setting efficient safety stock levels across a shared assortment.
This study develops a methodology for determining safety stock levels to balance mate-
rial availability, lead time performance, and inventory cost in such a context. A single-case
study was conducted at an industrial company operating within project-based manufactur-
ing, where a central warehouse supports both production and aftermarket operations. The
research combined a current state analysis, stakeholder interviews, and a semi-systematic
literature review.
A multi-criteria article classification methodology was developed, integrating ABC, XYZ,
and VED analyses to capture consumption value, demand variability, and criticality for
production and aftermarket separately. Safety stock levels were determined using differ-
entiated approaches based on demand frequency and criticality at the article level, and a
set of key performance indicators (KPIs) was proposed to enable follow-up and evaluation.
The results indicate that distinguishing between production and aftermarket criticality and
demand, enables more context-adapted inventory control. The proposed methodology im-
proves prioritization of critical items and supports a standardized way of setting safety
stock levels based on their criticality for articles with low and intermittent demand.
The study contributes with a practically applicable framework for determining article crit-
icality and safety stock setting in environments characterized by high product variety and
low demand per article, where standard inventory models are insufficient.