estiva whatsapp
header insight

Gain New Insights

Back to insight list
A Guide to Determining the Ideal Safety Stock to Avoid Dead Stock
safety stock yang ideal

In logistics and supply chain management, one of the biggest challenges companies face is managing inventory efficiently—avoiding both overstock (dead stock) and stockouts. This is where safety stock plays a crucial role. However, calculating the ideal amount of safety stock is not simple; it requires careful planning based on demand, lead time, and the risk of delivery delays.

What Is Safety Stock?

Safety stock is an additional quantity of inventory kept on hand to buffer against demand fluctuations or supply chain disruptions. The purpose is to ensure product availability and keep operations running smoothly, even during sudden spikes in demand or delays in delivery.

Risks of Incorrect Safety Stock Calculation

  • Dead stock due to overestimation
  • Stockouts that disrupt customer service
  • Financial losses from excessive storage costs
  • Prolonged lead times caused by unreliable distribution

How to Determine the Ideal Safety Stock

  1. Analyze Historical Demand. Study sales or consumption data periodically (daily, weekly, monthly) to identify patterns and trends.
  2. Calculate Demand and Lead Time Variability. The greater the variability, the higher the need for safety stock.

A commonly used formula:

Safety Stock = Z x σLT

Z = service level factor (e.g., 1.65 for 95% confidence)

σLT = standard deviation of demand during lead time

  1. Consider Delivery Lead Time. Delivery delays are a critical factor. Relying on unstable transportation can increase safety stock requirements.
  2. Use an Integrated Inventory Management System A digital system helps monitor stock levels, item movement, and demand forecasts in real-time.

PT SPIL Offers the Right Solution: Door-to-Door Land Transport Service

To help maintain inventory stability, PT SPIL offers a door-to-door land transport service—an integrated logistics solution that enables direct pick-up and delivery from and to the customer’s warehouse, without intermediaries.

Key Benefits of PT SPIL’s Land Transport Service

  • Accurate delivery timing that minimizes the risk of delays
  • Real-time tracking to monitor shipment status anytime
  • Efficient door-to-door service with no additional transit points
  • Seamless integration with warehouse operations to support real-time safety stock management

Conclusion: Optimize Safety Stock, Minimize Risk, Maximize Efficiency

Determining the ideal safety stock is not just about numbers—it’s also about choosing a reliable logistics partner. With PT SPIL’s land transport service, you can reduce distribution lead times and build a leaner, more efficient inventory strategy—avoiding dead stock, meeting customer demand on time, and boosting overall service performance.

Interested in trying PT SPIL’s door-to-door service? Contact us today for a smarter, more reliable logistics solution.



Category
spilcoid
Share
No insight available at the moment.
Latest Insights