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Buffer Stock
Buffer stock, also known as safety stock, is an extra quantity of inventory held to prevent stockouts due to unexpected demand fluctuations or supply delays. It acts as a cushion against uncertainty.
TECHNICAL DEFINITION
Buffer stock, or safety stock, is an additional quantity of inventory maintained to mitigate the risk of stockouts caused by variability in demand or lead times, ensuring continuous production or customer service levels.
BACKGROUND
Inventory or stock is a quantity of the goods and materials that a business holds for the ultimate goal of resale, production or utilisation.
READ MORE ON WIKIPEDIASYNONYMS & ALIASES
- Safety stock
- reserve stock
- contingency stock
- security stock
USAGE NOTE
Maintaining adequate buffer stock is essential for avoiding production stoppages and meeting customer orders during unforeseen disruptions.
DEVELOPERS
Organizations developing technology related to Buffer Stock.
Develops SAP Integrated Business Planning (IBP), which uses AI and advanced analytics for multi-echelon inventory optimization. This allows businesses to set and manage buffer stock levels across their supply chain to absorb shocks and improve resilience.
Provides the Luminate Platform, an AI/ML-driven supply chain solution that offers probabilistic forecasting and inventory optimization to dynamically calculate and position buffer stock, ensuring service levels are met while minimizing excess inventory.
Specializes in service-level driven supply chain planning software. Their technology uses probabilistic forecasting and machine learning to model demand and supply uncertainty, automating the calculation of optimal buffer stock for thousands of items.
Offers the Oracle Fusion Cloud SCM suite, which includes intelligent demand and supply planning tools that help businesses calculate and automate optimal safety stock levels based on demand variability, lead time uncertainty, and service level targets.
Through its acquisition of LLamasoft, Coupa provides AI-powered supply chain design and planning solutions that allow companies to model their entire network, run simulations, and determine optimal inventory policies, including the strategic placement and sizing of buffer stock.
Develops Infor CloudSuite SCM, a platform that provides end-to-end supply chain visibility and planning. Its inventory management modules help organizations optimize stock levels, including safety and buffer stocks, using data analytics and machine learning.
Provides hardware and software for real-time inventory visibility, including RFID, scanners, and real-time location systems (RTLS). This granular, real-time data is critical for modern systems to accurately manage and dynamically adjust buffer stock levels.
Offers the Manhattan Active® Supply Chain suite, featuring inventory optimization solutions that use AI to determine the most profitable inventory levels and placement. This includes dynamically adjusting buffer stocks based on real-time sales data and supply chain signals.