4 Reasons for Carrying Safety Stock Inventory

Safety stock is mainly used in a make-to-stock for manufacturing strategy, which is employed when the lead time of manufacturing is to satisfy the customer’s demand at the right cost and the right time. The main goal of safety stock is to absorb the variability of customer demand. Creating safety stock prevents stockouts from the variations and upward trend in customer demand.
Safety stock is used to protect the organizations from the stock-outs which is because of inaccurate planning and poor schedule. Sensitive goods which have a time limit like drinks, food, other perishable goods could spoil and will go to the waste if it is held as safety stock for too long. The better use of technology, collaboration with the suppliers, and more accurate forecasting are methods that will reduce the safety stock.

Benefits of Safety Stock Inventory
-Avoid delay in manufacturing
-Customer satisfaction
-Cost
-Wastage