Safety Stocks

Because safety stocks comprise an essential share of a company's fixed capital and cause considerable costs, balancing safety stocks according to stock and delivery requirements is of great importance. Constantly available checks and control mechanisms for the safety stock levels at the material and supply chain level contribute to remarkable improvements.

ORSOFT Manufacturing Workbench analyzes the orders and inventory situation across the entire supply chain. Alert mechanisms identify and indicate any non-compliance of the safety stock levels in terms of the company’s economic objectives. In order to set the algorithm's parameters, the product portfolio has to be segmented and it is necessary to identify the risks each supply chain bears.

Safety Stock - Share of the Minimum Stock
Safety Stock - Share of the Minimum Stock

The maintenance of static or dynamic safety stocks balances periodic fluctuations of:

  • delivery dates and quantities
  • quality of delivered / manufactured material
  • production dates and quantities
  • selling dates and sales volumes