Safety stock
Safety stock is used to safeguard stock in the supply chain against uncertain influencing factors. It is an extra quantity of an item that is held at a location to reduce the risk that an item is going to be out of stock. Maintaining enough safety stock enables businesses to deal with demand or supply uncertainty.
It is important to maintain some buffer inventory so that channels do not over-promise their consumers. Safety stock is derived by the systems that predict the number of units that are sold to walk-in consumers. This prediction can be used as safety stock so that the availability calculation does not consider the stock that is reserved for walk-in customers. The prediction of grocery items shrinkage due to events such as expiring or damaged products, is another example. However, this prediction is considered for availability calculation.
The available to sell quantity is determined by the available quantity minus the safety stock that is withheld. The calculated quantity is also published (through event subscriptions) to external systems along with the amount of safety stock that is withheld. The following example explains how to use safety stock to prevent online channels from overselling.
- item
- item-node
- item-node-deliveryMethod
For example, consider an item T-Shirt with variation that has one associated child item: Medium T-Shirt. Safety stock is configured as explained in the following table.
Hierarchy | Safety stock quantity |
---|---|
Medium T-shirt | 4 |
Medium T-shirt + Matrix-Store-001 | 2 |
Medium T-shirt + Matrix-Store-001 + SHP | 1 |
T-shirt | 5 |
T-shirt + Matrix-Store-001 | 3 |
T-shirt + Matrix-Store-001 + SHP | 0 |
Availability criteria | Safety stock quantity | Quantity available to sell |
---|---|---|
Medium T-Shirt + Matrix-Store-001 + PICK | 2 | 10 - 2 = 8 |
Medium T-Shirt + Matrix-Store-001 + SHP | 1 | 10 - 1 = 9 |
T-Shirt + Matrix-Store-001 + PICK | 3 | 10 - 3 = 7 |
T-Shirt + Matrix-Store-001 + SHP | 0 | 10 - 0 = 10 |
Availability criteria | Safety stock quantity | Quantity available to sell |
---|---|---|
Medium T-Shirt + Matrix-Store-001 + PICK | 2 | 2 - 2 = 0 |
Medium T-Shirt + Matrix-Store-001 + SHP | 1 | 2 - 1 = 1 |
T-Shirt + Matrix-Store-001 + PICK | 3 | 2 - 3 = 0 |
T-Shirt + Matrix-Store-001 + SHP | 0 | 2 - 0 = 2 |
Availability criteria | Safety stock quantity | Quantity available to sell |
---|---|---|
Medium T-Shirt + Matrix-Store-001 + PICK | 2 | 0 - 2 = 0; Shortage quantity =2; |
Medium T-Shirt + Matrix-Store-001 + SHP | 1 | 0 - 1 = 0; Shortage quantity =1; |
T-Shirt + Matrix-Store-001 + PICK | 3 | 0 - 3 = 0; Shortage quantity =3; |
T-Shirt + Matrix-Store-001 + SHP | 0 | 0 - 0 = 0 |
Safety stock and total availability
By default, the Availability API reports the total availability for a node or distribution group with safety stock withheld considered. For example, when total available quantity is 15 and total safety stock that is withheld is 5. In this scenario, the total available is 10.
If you want to ignore safety stock when the absolute inventory is calculated and consider safety stock as available, you can use the considerSafetyStock parameter in the Availability API.
For more information, see Availability API.