// ROBOTICS AND SMART FACTORIES TERM
Safety Stock
Extra inventory kept on hand to prevent stockouts due to unexpected demand spikes or supply delays.
TECHNICAL DEFINITION
Safety stock is an additional quantity of inventory held by a company to mitigate the risk of stockouts caused by variability in demand, lead time, or supply disruptions, ensuring continuous production or customer fulfillment in supply chain operations.
BACKGROUND
Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of the secondary sector of the economy. The term may refer to a range of human activity, from handicraft to high-tech, but it is most commonly applied to industrial design, in which raw materials from the primary sector are transformed into finished goods on a large scale. Such goods may be sold to other manufacturers for the production of other more complex products, or distributed via the tertiary sector to end users and consumers.
READ MORE ON WIKIPEDIASYNONYMS & ALIASES
- Buffer Stock
- Reserve Stock
- Contingency Inventory
- Security Stock
USAGE NOTE
Calculating optimal safety stock levels balances service levels with inventory holding costs.
DEVELOPERS
Organizations developing technology related to Safety Stock.
SAP provides comprehensive Enterprise Resource Planning (ERP) and Supply Chain Management (SCM) solutions, including advanced planning systems (such as SAP IBP) that leverage machine learning and analytics for demand forecasting, inventory optimization, and safety stock calculation to ensure resilience in manufacturing.
Oracle offers cloud-based Supply Chain Management (SCM) and Enterprise Resource Planning (ERP) solutions that incorporate advanced planning modules for inventory optimization, demand sensing, and multi-echelon safety stock planning, crucial for modern manufacturing and Industry 5.0 initiatives.
Kinaxis specializes in concurrent planning, providing a platform that integrates demand, supply, and inventory planning. Their solutions enable manufacturers to optimize safety stock levels in real-time by analyzing various factors like lead time variability, demand uncertainty, and service level targets.
Blue Yonder is a leading provider of supply chain planning and execution solutions. Their inventory optimization software uses advanced algorithms and machine learning to accurately predict demand and optimize safety stock across the network, reducing costs while meeting service levels for manufacturing operations.
ToolsGroup offers AI-powered supply chain planning software, including highly specialized solutions for demand forecasting and inventory optimization. They focus on delivering very high service levels with the lowest possible inventory, specifically addressing safety stock calculation and optimization using probabilistic modeling.
o9 Solutions provides an AI-powered digital brain platform for integrated business planning. This platform helps manufacturers create more resilient and agile supply chains by optimizing inventory, including safety stock, through advanced demand forecasting, supply planning, and scenario modeling.
E2open offers a networked platform for multi-enterprise supply chain management. Their solutions enable end-to-end visibility and collaboration, facilitating better demand sensing and inventory optimization, which directly impacts the accuracy and effectiveness of safety stock planning in complex manufacturing environments.