
As a businessman, of course you will need to carry out supply chain management to support operational activities. So, what is safety stock and what is its role in the supply chain management system? Safety stock is inventory prepared by a company to prevent inventory shortages when market demand conditions are uncertain. In a trading company system, safety stock is useful for calculating the quantity of a product. For this reason, special calculations are needed so that product inventory can meet customer demand.
Safety stock plays an important role in supply chain management to maximize profits, anticipate fluctuations in market demand and facilitate goods production schedules. As we know, the law of supply and demand is always influenced by market conditions. If market conditions always move dynamically, then companies must implement safety stock so they can anticipate changes in demand and be able to make more profits.
Safety stock is also needed to determine inventory levels appropriately. If there is too much inventory, then the company's cost turnover will not run smoothly. Conversely, if there is too little inventory, the company will experience stock out. So, what happens if the safety stock calculation is not done correctly? Operational systems will be disrupted and waiting times will be longer, resulting in chaotic delivery schedules for consumer orders.
So have you done safety stock in your business?


