About Safety Stock Calculator
The Safety Stock Calculator was developed by Chicago Consulting; a 25-year old firm that designs and engineers supply chains for manufacturers, distributors and retailers. It is an application of a technology we call Optimal Inventory Management.
Conceived in 1983 and perfected into operational software in 1995, Optimal Inventory Management was first applied to the parts business of a very large US OEM. It was so successful that the company expanded it to their worldwide operations where it still operates today.
One of the largest of our customers has publicly stated that our technology reduced their Capital by 30% and increased their fill rate from 96% to 98%. Contact us for a verbal testimonial.
Our Approach
Our technology targets a specific and arguably one of the most important areas in inventory management. We have conspicuously kept it focused on the core inventory management decisions—setting Safety Stocks and Order Quantities; see The Importance of Safety Stocks. In this way we can turbo-charge your inventory no matter what host system is in place.
Common Mistake
Most software approaches make the mistake of bundling Forecasting with setting Safety Stocks. This does a disservice to users because it obscures their ability to separate these two important functions. Our approach allows you to optimize Safety Stocks with your current Forecasting methods.
Sophisticated Alternatives
Some of the seemingly most sophisticated software claim to not need Safety Stocks—a very risky approach for inventories serving random demand. They “Plan on Demand” yet insert buffers into Lead-times. These buffers are hidden Safety Stocks that conceal their role. When established without regard to item characteristics (Velocity, Cost, Lead-times, etc.) they get applied with the broadest possible brush resulting in higher Costs and lower Fill.
While other advanced systems provide a laundry list of Safety Stock setting methods (see Other Safety Stocks). The effort needed to select, initialize and maintain a particular method quickly devolves into simpler more intuitive approaches that degrade inventory performance, increase Costs and lower Fill.
Alternatively users are provided with a laundry list of Safety Stock setting methods that are complex, difficult to maintain that quickly devolve into simpler more intuitive approaches that degrade inventory performance, increase Costs and lower Fill. Setting Safety Stocks is too important for this disengaged approach. Let us show you how to take charge of your inventory by sending us a sample of your data.
Our optimal Safety Stocks avoid these difficulties. They are easy to test, implement and maintain. Most importantly they are “optimal”—beating all other Safety Stock methods—see “Beat the OPTIMIZER—Win $10,000”. In addition our SaaS offering brings our technology even closer making an already simple implementation even easier.
