What is safety stock in SAP PP-MRP - Material Requirements Planning?

SAP Term: safety stock

• Component: PP-MRP

• Component Name: Material Requirements Planning

• Description: The quantity of stock to satisfy high requirements in the stocking-up period. The purpose of the safety stock is to prevent material shortage. To determine the safety stock level, you must specify the risk of a material shortage and the desired service level. Safety stock is not used in production.

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• Key Concepts: 
  Safety stock is an inventory management technique used in Material Requirements Planning (MRP) within SAP. It is a predetermined amount of stock that is kept in reserve to ensure that customer demand can be met even if there are unexpected delays in the supply chain. 
  
  How to use it: 
  In SAP, safety stock can be set up for a particular material by entering the desired amount in the “Safety Stock” field of the material master record. This will ensure that the system takes into account the safety stock when calculating the required quantity of materials for production. 
  
  Tips & Tricks: 
  It is important to set an appropriate safety stock level for each material, as too much safety stock can lead to unnecessary costs and too little can lead to stock-outs. It is also important to regularly review and adjust safety stock levels as customer demand and supply chain conditions change. 
  
  Related Information: 
  For more information on setting up and managing safety stock in SAP, please refer to the official SAP documentation on MRP.