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How Safety Stock Can Save Your Business

What’s the difference between inventory management and inventory optimization? This article, written by Michael Watson, will help you learn how you can begin your inventory optimization journey and all the right ways to make you successful. Watson starts the article by writing that every supply chain is rife with variability and uncertainty, which adds costs, problem with customers and headaches and firefighting for supply chain managers: Safety stock plays a critical role in a helping you run a good supply chain despite the inherent variability and uncertainty. Safety stock allows you to seamlessly meet unpredictable spikes in demand, and it allows you to protect your customers from production breakdowns, supplier failures, or unusually long shipment times. Safety stock helps increase sales, reduce late shipments to your customers (keeping them happy or avoiding contractual penalties), and reduce the cost of expediting by minimizing the times you are short on stock. He goes on to state that safety stock, however, is not free and may not be a good strategy to simply have large piles of safety stock throughout the supply chain. Watson provides plenty of great insight and helpful tips to help begin your inventory optimization. He concludes this piece by restating that inventory optimization is a process that will help you get control of variability and uncertainty in the supply chain.

About Matthew Kabik

Matthew Kabik is the former Editor of Computer Aid's Accelerating IT Success. He worked at Computer Aid, Inc. from 2008 to 2014 in the Harrisburg offices, where he was a copywriter, swordsman, social media consultant, and trainer before moving into editorial.

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