Purpose – Companies are challenged in dimensioning their safety buffers in a way that balances desired service level with capital tied up. A high service level is crucial for competitiveness, and safety stock plays a key role in covering volatile and unpredictable demand. A trade-off must be made between safety and capital tie-up. The larger the safety stock, the greater the potential to achieve a high service level – and the capital tie-up. Therefore, the purpose of this study is to: Investigate how global companies can work more systematically and with continuous improvements in managing safety stock, and how this affects service levels and costs. To address this purpose, two research questions have been formulated: [1] What are the challenges in dimensioning and management of safety stock? [2] How can the process of safety stock updates be improved to manage changed conditions? Method – The study is a case study that combines both qualitative and quantitative research. Interviews, documents analysis and workshops have been used as data collection methods to fulfill the purpose of the study and to answer the research questions. The interviews were transcribed, and the results were categorized into five themes relevant to the study. Findings – The findings of the study consist of several challenges that must be considered when dimensioning safety buffers, particularly safety stock. Various factors contributing to uncertainties are identified, as well as the importance of reducing variability. The study identified challenges in dimensioning safety stock and how these challenges can be managed to achieve a balance between service level and capital tie-up, Furthermore, the result shows a lack of clear guidelines and routines for updating safety stock. Implications – The study provides both practical and theoretical implications. The practical implications offer insights into how the dimensioning and monitoring of safety stock can be conducted. The theoretical implications lie in the synthesis of existing theory regarding how trade-offs between service level and capital tie-up should be managed to achieve an optimal balance. Limitations – The study only considers a limited part of the supply chain, with its primary focus on safety buffers in distribution warehouses. Other parts of the supply chain are excluded from the scope of the study. The study is based on the current state of the case company and therefore does not address decisions that have already been made regarding forecasting, segmentation, buffer selection, or established targets for service levels and capital tie-up.