What is safety stock in SAP SRD-SCM-SCP - SCM-Supply Chain Planning and Control?

SAP Term: safety stock

• Component: SRD-SCM-SCP

• Component Name: SCM-Supply Chain Planning and Control

• Description: The amount of stock planned to be available to fill unexpected variances in supply and demand.

Smart SAP Assistant

• Key Concepts: 
  Safety stock is an inventory management technique used to ensure that a company has enough stock on hand to meet customer demand. It is a buffer stock that is kept in reserve to protect against unexpected fluctuations in demand or supply. Safety stock is typically calculated based on the expected demand and supply variability, as well as the lead time for replenishment. 
  
  How to use it: 
  Safety stock can be used to ensure that a company has enough inventory on hand to meet customer demand. It can be calculated using historical data and forecasting techniques, or by using a safety stock calculator. Once the safety stock level has been determined, it should be monitored regularly to ensure that it is sufficient for the current demand and supply situation. 
  
  Tips & Tricks: 
  When calculating safety stock, it is important to consider the lead time for replenishment, as this will affect the amount of safety stock needed. Additionally, it is important to monitor safety stock levels regularly, as changes in demand or supply can affect the amount of safety stock needed. 
  
  Related Information: 
  Safety stock is an important part of inventory management and should be considered when creating an inventory management plan. Other inventory management techniques include just-in-time (JIT) inventory and economic order quantity (EOQ).