Statistical Safety Stock

Statistical Safety Stock

Safety stock is the operations suspension system. In conjunction with your capacity, it has to be designed to absorb all variations and lead times in the system. This means by SKU by stocking location, all factors need to be fed to the equation. Often times organizations rely on rules of thumb or organic settings. This approach serves to grow requirements over time or to miss major shifts in demand or supply patterns. A carefully calculated safety stock creates both the lowest inventory profile and the lowest risk profile.

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Supply Chain Toolworks’ solutions calculate statistical safety stocks based on a multitude of decisions, performance metrics, environmental variables, and constraints. This is a large list but excluding any of these inputs will put service level performance at risk:

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Bottom Line: We can help you get this right and avoid floating shortages

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Read More:  APICS Article, \”Navigating Troubled Waters\”
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