Hedging your company against revenue disruptions, with buffer stock, is a fundamental element of any inventory management policy. We call the buffer stock = safety stock, and in a perfect world will never consume the reserves.

Of course, life isn't perfect: the manufacturer will at some point have a raw material scarcity, logistic lanes will get blocked doubling the lead times, Sales will spike out of nowhere. All of which leaving your company vulnerable to revenue hits and customer dissatisfaction.

Therefore we introduce three policies to choose from, as well as calculating in days how long the chosen safety stock policy will last for each individual item/sku.

Specifies how many pieces of safety stock should be added to each order proposal calculation.

Users can also fill out the safety stock unit field directly in AGR through bulk update and the item card.

Example:

1.000 units have been keyed in the safety stock units field, today the units will last 49 days. The instant calculation from units to days gives valuable inventory insight for the users.

The safety stock days is a simple method to keep a fixed time period of stock reserves that will always be in line with upcoming demand.

The way it works is that the user must specify how many days of safety stock should be held at any point. How many pieces will depend on the demand from today until the selected number of days is reached. This approach is very well fitted with seasonal items.

To apply safety stock days > Settings > Forecast > Safety stock policy to days > Item card / Bulk update > specify how many days to hold.

Safety stock days can also be applied directly in items / reports, in the item card or through a bulk selection > apply SS days policy + number of days with Bulk update.

In the below example, the safety stock policy is Days + 60 Days have been keyed in. The total demand over the next 60 days for this item on that date was 8.766,- units of safety stock.

The statistical uncertainty in historic sales / consumption is calculated by AGR. The service level is then set by a confidence factor. The confidence factor takes the uncertainty and tunes it up or down to achieve a higher or lower service level.

3 factors impact the safety stock level:

In the example below, the safety stock policy being used is Statistical. The confidence factor has been set to 95%. Safety stock for the order period has been calculated and can be seen in the Units column. Those units have then been converted into days based on how many days it takes for the Total Demand to equal the safety stock units.

You can read more about what affects safety stock units when using statistical safety stock policy here.

Safety Stock Units and Safety Stock Days can be displayed as columns in Items/Reports, these fields align with the values shown in the item card.

In Settings > Forecast > Safety Stock Policy, the users can access and manage the safety stock policy across all items in AGR. By default, the Safety Stock Policy is set to Units.

Users can change the policy from Units to either Days or Statistical (Statistical, only for those that have subscribed to Order Pro).

The safety stock policy can be configured on the item level, through the Item Card -> Item Details.

You can modify the default policy and adjust the units, days, and confidence factor as needed, based on the selected policy.

If you want to configure the Safety Stock Policy for multiple items at the same time, you can do that through the Bulk Update functionality in AGR.

In the example below, I select four items, open the bulk update sidebar, set the Safety Stock Policy to "Days," and then specify it as 30 days.

This change takes effect immediately and is reflected in the item card for each item after the grid has been refreshed.

in items and/or reports you can add in a column called "Safety stock policy" which, if grouped, will display the safety stock policy in place, in the () brackets is the item / sku count associated with each policy.