Safety Stock: Everybody Wants To Use, Nobody Wants To Own

sAfety stoCk: everyBoDy wAnts to Use, noBoDy wAnts to own By James workman and natalie scheidler Describes three key factors— demand variability, supply variability, and strategic considerations —which should be used in the calculation of safety stocks… less inventory will be needed if we consolidate labels of Spanishspeaking countries into one label product instead of having a separate label for each country…if your suppliers are sometimes late, then your model should account not only for how often they are late, but also by how much. C C ompanies use safety stock to reduce the risk of stock out and to keep the customer service high. The question is how to determine the right amount of safety stock. In this article, we share our experience about the safety stock model that we use at Eli Lilly and Company, and show the factors we account for in the calculation, and why. Safety stock is a major cost to a company, which must be kept under control to run the business smoothly and efficiently. Companies can do this without making large investments in tools because it is not necessary to have expensive tools for the best results. We have found that readily available tools, such ...