In the modern era, technology has been an indispensable part of our lives. And the fact remains constant for various industries including the field of supply chain management. With cloud computing, big data, and other forms of advanced analytics, businesses are becoming more efficient than before with their supply chains. But what exactly does this mean?
Supply chain management is a management process that focuses on the smooth flow of information, materials, and services to meet customer demand. It is a complex process that requires the coordination of many different players, from suppliers to distributors and customers.
Now that we've discussed supply chain management, it's time to learn about safety stock. Safety stocks are a component of supply chain management aimed at preventing stockouts.
The term "stockout" refers to a situation in which a firm has run out of inventory, leaving clients without a product or service. This can be quite harmful to businesses because it could result in lost revenue and customer satisfaction. Therefore, it is clear that Safety stock targets are one of the most important aspects of supply chain management.
Essential elements of setting up safety stock goals in supply chain management and analytics:
- Using advanced analytics can help ensure that your company will never run out of inventory and prevent the loss in revenue that comes with a stockout. Analytics can also help you to avoid overstock, which occurs when a company has more inventory than they need. Apart from this, Advanced analytics can help you to determine the optimal amount of inventory that should be kept in a warehouse.
- In order to ensure your business is using safety stocks effectively, it's important that all stakeholders work together from the beginning stages of an operation plan. This will allow companies to make decisions based on accurate data and demand forecasts for their products.
- It is also important to take into consideration the various planning horizons when setting up safety stock targets. For example, if your plan has a long-term horizon (more than one year), you will want to make sure that the inventory accounts for fluctuations in demand over time, however, if your supply chain management strategy focuses on short-term goals. You might want to have a more streamlined strategy that focuses primarily on current demand.
- You may also enroll in a supply chain management course to learn more about the subject and how it might assist your organization to operate successfully.
Explore SCM with Imarticus Learning:
Imarticus learning offers you a Supply chain management course with analytics that will provide you with the skills and knowledge to understand supply chain planning, management, and optimization. You will get to learn about the modern supply chain management concepts and how to apply them in your specific business environment.
This course contains numerous case studies which will help you understand exactly how these issues are handled by professionals working in Supply Chain Management across various industry sectors. Also, this course will take your Supply chain management career to the next level.
- Real SCM projects and case studies.
- Industry expert faculty will help you apply SCM concepts in your organization.
- Exclusive Videos and Podcasts by industry leaders to take your career ahead.
- Offers you a certification from one of the most renowned supply chain management training institutes.