Definition
The extra inventory held to absorb downtime, demand variation and lead-time variation; it is an explicit term in the kanban and reorder-point formulas, not a surplus discovered during a count.
In detail
Safety stock answers how large the uncertainty is, not how much extra feels comfortable. The approach of breaking it into failure factors that can each be improved — equipment downtime, defects, transport delays each contributing a few percentage points that add up to a safety factor — comes from Volume 12 (a third-party reprint); the official kanban calculator instead uses either a statistical Z-value method or a vendor performance factor. Once a factor improves, safety stock should come down instead of sitting there forever. It enters the kanban and reorder-point formulas together with lead time, so the basis must state whether it is expressed in days or in pieces. Too much safety stock hides problems; too little turns every fluctuation into a shortage.
Example in practice
A part with daily usage of 100 pieces and a 5-day lead time starts with 50 pieces of safety stock, using a 10 percentage-point safety factor applied to total lead-time demand (this is one of two still-unresolved readings; applied to average daily demand instead, it would be 10 pieces). Six months later supplier on-time delivery has risen from 85 to 98, so the team cuts the term to 20 pieces; kanban cards drop accordingly and a shelf slot is freed.