Glossary
Safety stock
Safety stock is the quantity you choose not to sell so that a late delivery, a miscount or a rush does not turn into an empty shelf. It is a decision per product, not a feeling.
What it is
Safety stock is a buffer: units you keep on hand but do not offer to sell. It exists because the world is late. Suppliers slip, counts drift, a promotion lands on a Friday. The buffer absorbs those surprises so a customer never gets a “sorry” after checkout.
Why it matters
Without a buffer, the last unit is always the risky one. With a buffer, the last unit you promise is the tenth from the bottom, and the bottom nine are the margin for error.
The trade is real: safety stock is money on a shelf. That is why it should be set per product and revisited, not applied as one blanket percentage to everything.
A worked example
A body lotion sells about 20 a week and the supplier takes three weeks to deliver. A safety stock of 30 covers one and a half weeks of surprise. With 110 on hand and nothing allocated, the channel is told 80. When on hand falls to 30, the channel shows zero even though the shelf is not empty, and a wholesale order can still be filled from those 30 if the business decides to.
How DockingWare does it
Each product can hold back a fixed number of units, a percentage of what is available, or both; when both are set the more conservative result is what the channel is told. The held-back units stay fully available to wholesale orders, and if a product is a component in a kit, its reserve also shrinks what the kit can promise.
Questions
- How much safety stock should I keep?
- Enough to cover the gap between when you notice you are low and when the next delivery lands, at the sales rate you expect in that window. Products with long lead times or spiky demand need more; fast, reliable suppliers need less.
- Is safety stock the same as a channel reserve?
- A channel reserve is safety stock applied to what a marketplace is told. You hold back units from the published quantity so the marketplace cannot sell them, while wholesale can still take them.
- Does safety stock change what is on hand?
- No. It changes what is promised. The units are on the shelf; the system simply stops offering them to new orders once the threshold is reached.