Identifying and Setting Safety Stocks Levels via Multiple Criteria

摘要

In a make-to-order manufacturing environment safety stock levels on components/items/sub-assembliesrnhave a major impact on the on-time delivery (OTD) metric. Especially because of the variable demand andrnsupplier lead times on different items, safety stock levels can heavily influence the production schedulesrnand due date performance. At companies that have thousands of components/items, identifying the itemsrnthat should have safety stock and the level of safety stock on those items is critical because of the inventoryrninvestment budget constraints, and expected service level and OTD metric. This paper describes arnstructured analytical approach to identify items that should have safety stock and then identify the level ofrnsafety stock based on the level of risk associated with the items. Using a multi-criteria selection process werndetermine risk priority numbers (RPN) for all the items that are considered to have safety stock. The lowerrnthe RPN the lower is the risk associated with not having the component/item/subassembly in stock. Safetyrnstock levels for parts are then calculated by setting their service levels proportionate to the RPN they hold.