Companies are using Safety stocks to limit variability while COVID-19 continues and the Delta and Omicron versions increase uncertainty. Organizations keep extra inventory on hand to handle unexpected demand spikes.

Safety stock can achieve this purpose, however inventory management has several shortcomings. Disruption is now a "when," not "if." Thus, we need more than Safety stock to develop durable, adaptable supply networks across time.


"Safety Stock"
Sellers hold finished Safety stock in case client unpredictability surprises them. Thus, firms employ Safety stock to fulfill orders when demand exceeds their optimistic expectations. Retail Safety stock includes apparel, home products, electronics, and cookery.

Agility and Visibility: The Key to Retail Success Today

When Does Safety Stock Work?
Safety stocks don't solve all consumer supply chain unpredictability. It works best for commodities retailers. It's expensive to create and store made-to-order goods that won't sell quickly.

Safetying can help retailers prevent out-of-stocks, safeguard their reputation, and maintain business continuity. The method momentarily boosts flexibility and resilience.

Low-volume, high-margin retailers should avoid Safety stock. These firms may store pricey merchandise. Organizations may pay substantial sums to keep or dispose unsellable, useless, or obsolete commodities depending on how long fluctuating conditions endure.

2022 Safety Stock?
Retail executives wonder if Safety stock will last till 2022. Yes. After the holidays, many retailers will need Safety stock solutions. The essential question is whether Safety stock should remain a demand variability solution.

Many shops cannot investigate alternate methods. Companies' stopgap remedies, such Safety stocks, are just that. They'll wear out.

In other words, we need better answers to succeed in today's globalized, ever-changing economy. Modern supply chains will still face issues after the pandemic. Climate change will continue to affect society.

Thus, merchants must invest more in their supply chains, notably digital transformation. Digitization can boost workforces, improve supply chain procedures, and facilitate supply chain communication. Retailers can see their inventory in real time and make better, faster decisions to satisfy market demand.

Retail CEOs that can deploy Safety stock and long-term solutions will be better prepared to withstand change in 2022 and beyond. Use Safety stock as a tool to achieve a more agile and robust goal.

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