Inventory operations

Safety stock

The cushion held against demand and suppliers going wrong.

Updated

The short answer

Safety stock is the extra inventory held beyond expected demand during a lead time, to absorb a busy week or a late shipment. Held in days of cover it stays defensible: a supplier that has been two weeks late twice this year justifies two weeks, and a reliable one does not.

It is a cost as well as a protection. Every unit of cushion is cash on a shelf, plus storage and the risk of obsolescence, so a blanket safety policy applied across a catalogue overstocks the reliable half to protect the unreliable half.

Sizing it in days rather than deriving it from a service level and an assumed demand distribution keeps it auditable. A number chosen because of something observable is easy to revise when the supplier improves; one produced by a statistical model nobody can check tends to be neither trusted nor updated. The safety stock calculator shows both, the service-level answer and the simpler max-demand one, each turned into days of cover.

The right size falls when either side gets more predictable. Shortening a lead time, splitting an order across two shipments or moving to a supplier who is dull and punctual all reduce the cushion the same stock service level needs.

In nouz the cushion is a date rather than a setting. The reorder planner on Insights, Inventory dates each variant's Order by day so that the reorder lands as the last unit sells at the expected pace, counting stock already on its way. Holding a cushion of so many days means ordering that many days before Order by, which is why the calculator gives its answer in days.

Where it lives in nouz. Not a setting of its own: the reorder planner on Insights, Inventory dates the last day to order, Order by, and ordering your safety days before it holds the cushion.

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