Stock buffers are now sized correctly for long lead times.
What changed
- Cover and safety stock are now sized correctly at every lead time, given an accurate forecast. Before, the buffer for a long-lead item was too thin for the service level you set: at 120 days, a line set to 95% was actually protected to about 76%, and the gap widened the longer the lead time ran.
- The buffer now also grows with how much a supplier's own delivery date moves, read from that supplier's lead time on file rather than assumed the same for everyone.
- Because of this, suggested orders on long-lead items may come back larger than before: the extra units are what holding the declared service level actually costs on those lines, not a change in what you asked for.
- The service level you actually get still depends on how accurate the forecast is and how much a supplier's lead time varies, not on the buffer formula alone. This fix corrects the formula; it does not promise a number the forecast has to earn too.
Where to read more
- The replenishment engine
- Lead time
- Suggested orders