Safety stock strategies in Assembly Systems : A case study at IKEA Components

Sammanfattning

This report investigates the assembly system and safety stock management practices at the case company involved in this study. The primary objective is to analyze the company’s current operational approach and also to evaluate it in relation to established theoretical safety stock methods, in conjunction with relevant article classification approaches. The study is predominantly quantitative and provides some insights of qualitative analysis as well as utilizing simulations and mathematical calculations to assess the performance of the existing system and to identify potential improvements. The impact of the alternative approaches is systematically evaluated to determine whether modifications of the current practices are warranted. A comparative analysis is conducted in which the average of the outcomes of the different methods are assessed against one another. The approach that demonstrates the highest level of suitability in relation to the case company’s operational context is identified as the most appropriate. The safety stock models examined in this study include cycle service level, fill rate and order fill rate. Furthermore, the article classification is analyzed using both volume based and demand based classification approaches. The results indicate different safety stock methods and classification approaches generate varying impacts on inventory levels, availability and system performance. The findings show how differentiated service level strategies combined with classification approaches can improve inventory management performance compared to the company’s current approach. Furthermore, the study demonstrates that the choice of safety stock methods involves a trade-off between service performance. inventory cost and operational complexity. Based on the results, recommendations are provided regarding which safety stock strategy and classification approach best suited for IKEA Components’ operational context. The study also contributes to the understanding of inventory management in assembly systems with shared components and highlights the importance of adapting safety stock policies to demand patterns and product characteristics.