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Safety stocks are planned to cover for demand and sup­ply variability. In most companies it is acceptable to drop below safety stock levels to some degree. If a company performs so well that they never drop below the safety levels, then there is no need for safety stocks in the first place. If only a small portion of the planned safety stock has been utilized, there is no need to panic and replen­ish by expediting except in unusual cases.



Standard logic in many systems treats safety stocks as requirements in the first time period of the planning horizon. This creates exception messages to expedite very short-term orders when projected inventories drop be­low safety stock levels.



Planners must reject these messages and determine where to place the replenishment orders to avoid expe­dite situations and schedule instability.



Safety stock replenishment orders should be planned at the time fences and allowed to progress at full lead-time. Planners should manually expedite exceptions such as critical items or items whose safety stocks have been depleted by unacceptable percentages. This can be accomplished via system logic or by temporarily reduc­ing the safety stock planning factors and setting up safety stock replenishment requirements at the time fence.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 14

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