Demand for spare parts is typically characterized by low and irregular consumption. As a result, the usual starting point of a demand planning process—statistical forecasting—has limited value. In this project, spare‑parts demand caused by machine failures in the field was analyzed at the machine‑group level. By combining failure data per machine group with the configuration of each machine type (i.e., the list of spare parts included), a failure rate for individual spare parts was derived.
This failure rate served as input for calculating safety stock levels at the product level in local warehouses worldwide, taking into account the required service levels and replenishment lead times. The determination of these safety stock targets, however, was outside the scope of the demand planning project.