What is inventory and safety stock How to reduce inventory

Inventory is what is stored in the inventory and waiting to be used.

For example: cash, goods, product parts, etc.

These things are usually used as an example of inventory data for reference and ready use. It's quick and easy.

Safety stock is the inventory required to ensure the normal production of the enterprise.

This is a vague concept.

For example, a parts enterprise needs 100 per day for production, and the parts order cycle is 5 days, then the minimum inventory of this part is 500, considering that some special circumstances may occur, it is necessary to leave a certain insurance coefficient, which may vary from % to planners according to experience. If the insurance factor is 40%, the safety stock is 700.

Thirty-eight"The origin of the section.

On March 8, 1903, women workers in Chicago held a general strike and demonstration to oppose bourgeois oppression, exploitation, and discrimination, and to fight for freedom and equality. This struggle has won the support and enthusiastic response of the vast number of working women in the United States. In 1910, the Second International Socialist Women's Congress was held in Copenhagen, the capital of Denmark, by advanced women from a number of countries.

In accordance with the proposal of the German socialist revolutionary Zetkin, who presided over the meeting, the congress designated March 8 of each year as International Women's Day in order to strengthen the unity of working women in the world and to support women's struggle for freedom and equality. The United Nations has celebrated International Women's Day since 1975, when International Women International"Thirty-eight"The festival has become a great festival for working women all over the world to fight for peace, for the rights of women and children, and for women's liberation.

The first commemoration in our country"Thirty-eight"International Working Women's Day began in 1924. Of course, under the leadership of the Communist Party of China, the meeting was held in Guangzhou"Thirty-eight"Commemoration of International Working Women's Day.

After the founding of the People's Republic of China, the People's Government Council issued a decree in December 1949 to designate March 8 as Women's Day.

Safety stock is a buffer stock that is prepared to protect against uncertainties in future supplies** or demand, such as large bursts of orders, unexpected interruptions or sudden delays in deliveries, etc. Its size depends on the uncertainty of demand and demand, the level of customer service (or fulfillment rate), and the cost of stock-outs and inventory carrying costs.

Safety stock = average monthly usage Number of monthly purchases For example, if 1000 is used in a month, and the procurement cycle is about 7 days, then the safety stock of this material can be understood as four purchases in a month, and a reasonable safety stock should ensure at least 5 to 7 days of normal use (because weekends are excluded), that is, about 250.

Build the foundation. The determination of safety stock is based on the theory of mathematical statistics. First, assume that the change in inventory revolves around the average rate of consumption, with a probability of being greater than the average demand and half being less than the average demand, with a 50% probability of being out of stock.

The larger the safety stock, the less likely it is to run out of stock; But the larger the inventory, the more surplus inventory will appear. Stockouts should be kept at an appropriate level according to the purpose of the different items and the requirements of the customer, allowing a certain degree of stockouts to exist. The quantitative calculation of safety stock can be obtained according to the fixed customer demand, the change in demand, the fixed lead time, the change of the lead time, etc., using the normal distribution map, standard deviation, expected service level, etc.

In modern warehouse management, why set a minimum safety stock level?

Hello, I'm glad to answer for you: in modern warehouse management, why set a minimum safety stock amount? Answer: The difference between safety stock and minimum safety stock:

1. Safety stock is the quantity of goods kept in the inventory, in order to prevent unpredictable fluctuations in demand or land shortage; The minimum safety stock is the minimum quantity of inventory that should be kept in the warehouse, and below this amount, there may be a shortage and affect normal production. 2. In actual operation, when filling in the warehousing list, if the current balance of an inventory is lower than the minimum safety stock, the system will give an alarm. When it is lower than the safety stock, the system will not alarm, but the enterprise generally has to order from the first merchant.

3. Safety stock is not the same as minimum safety stock. Safety stock, also known as safety storage volume, also known as insurance inventory, is inventory prepared for real needs, and once established, it will incur additional costs; The minimum inventory can be understood as the inventory set for the factors of certainty and the uncertainty of the factors, that is, the warehouse can operate in the safety stock, but once it encounters the minimum safety stock, it will lead to the breaking of the chain. The main reasons for establishing a safety stock are:

1. Customer's requirements. Usually, in order to ensure production, customers require OEMs to establish a certain amount of safety stock. In this case, there is usually a strict agreement and process between the two parties for the definition and disposal of sluggish and scrapped materials.

2. Changes in requirements. In the future, the market demand for a certain product will rise, which will lead to a shortage of some raw materials and will not be easy to solve in a short time. 3. The impact of **.

Some important raw materials will be in short supply in the future due to force majeure, changes in market trends, or due to changes in business strategies, new factories, etc., and it is necessary to consider establishing safety stocks. 4. Changes in production. The reasons for this are as follows:

Changes in the production process in the factory, maintenance or replacement of machinery and equipment, etc., will have an impact on material loss, which may lead to an increase in the scrap rate of raw materials.

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Measures to reduce safety stock or even zero inventory are:

1. Improve the consistency rate of account cards.

2. Improve the accuracy of sales planning.

3. Improve the accuracy of production planning.

4. Pull the production mode.

5. Establish a daily lottery system.

6. Deal with sluggish materials in a timely manner.

Develop a plan for the handling of sluggish materials and process sluggish materials gradually.

Prioritize concentrating on valuable, sluggish materials.

7. Classify all materials of the company A, B and C, and focus on the control of class A and B materials.

8. Strictly control the requisition of class A and class B materials and reduce unnecessary material requisition.

9. Determine the safety stock, maximum inventory and minimum inventory of various inventory materials.

The idea of lowering safety stock or even zero inventory.

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Measures to reduce safety stock or even zero inventory are: 1, improve the consistency rate of account cards 2, improve the accuracy of sales plans 3, improve the accuracy of production plans 4, pull production methods 5, establish a daily draw system 6, timely deal with sluggish materials Formulate a sluggish material handling plan, and gradually deal with sluggish materials Priority focus on dealing with valuable sluggish materials 7, carry out A, B, and C deferred lead elimination for all materials of the company, and focus on controlling Class A and B materials 8. Strictly control Class A and Class B to stimulate the requisition of this material, Reduce unnecessary material requisitions9, determine the amount of safety stock, the maximum inventory, and the minimum inventory of various inventory materials.

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Hello, the safe warehouse section is a certain amount of inventory that is reserved in response to the uncertainty and risk in the chain. Here are some ways to strengthen your safety stock: Precise demand volcanic alarm:

Accurately ** demand by collecting historical sales data and market trends to avoid excess inventory or stockouts. Improve business performance: Establish long-term relationships with business owners and monitor their delivery time and quality to ensure reliability.

In addition, you can also consider establishing flexible cooperative relations with multiple suppliers, so that you can turn to other suppliers in time when one supplier cannot deliver on time. Optimize inventory management: Adopt modern inventory management technologies such as RFID, automated** systems, and real-time inventory tracking to achieve precise control and monitoring of inventory.

Establish spare parts inventory: Establish spare parts inventory for wearing parts and urgently needed parts to ensure the normal operation of the production line and the ** of materials required for emergency repair of missing covers. Enhance risk management:

Establish a risk management plan to identify and mitigate potential risks in the chain, such as natural disasters, political instability, and currency fluctuations. Establish a safety stock strategy: Based on the analysis of chain risks and needs, formulate an appropriate safety stock strategy to ensure that the inventory level is under control, and that it can meet customer needs while reducing inventory costs as much as possible.