Safety Stock or Buffer Stock exists to counter uncertainties in supply or demand. For example, a supplier may deliver their product late, the warehouse may be on strike or a number of items may be of poor quality. In addition, a competitor may be sold out on a product, increasing demand. Safety stocks enable organizations to satisfy customer demand in the event of these possibilities.
In short, a minimal level of inventory that a company seeks to have on hand at all times is called safety stock.
Safety stock as the name suggest is the stock level till which the dead stock or stock out situation will not arise (probable figure based on past data maintained in master).
As such this figure is not stock, it is cut-off figure maintained in master which is used for Planning and once the stock level dips below this value, you can configure system to generate PR, orders automatically. It has its relevance in MRP and CBP.
Safety Stock is the quantity of stock held to satisfy unexpectedly high requirements in the stocking-up period.
The purpose of the safety stock is to prevent a material shortage from occurring. In order to determine the safety stock level, you must first specify the risk of a material shortage and also the desired service level.
Usually the safety stock will not be used in production.
The purpose of the safety stock is to prevent a material shortage from occurring.
In order to determine the safety stock level, you must first specify the risk of a material shortage and also the desired service level.
The safety stock depends on the service level that you specified in the MRP 2 view of the material master record and on the accuracy of the forecast. The more accurate the forecast, the smaller your safety stock can be.
You can specify a minimum safety stock. If the result of the safety stock calculation is lower than this limit, the safety stock is then automatically set to this minimum value. You enter the minimum safety stock in the material master record ( MRP 2 screen ).
What are the precautions to take to adjust safety stock in material master?
You can change safety stock at any time; it will only effect during next mrp run output subject to your lot size selection.
How to configure once the delivery is created, the available stock is reduced?
Go to OPJJ -> There for there for combination of Checking Group "01" or "02" as per material master and Checking Rule "B" i.e. SD delivery, Check whether "Include Deliveries" is active OR not. It should be active then System will consider the quantity of delivery document during availability check even if PGI is not done.