The safety stock factor is a multiplier found in some ERP and inventory management systems. This multiplier can be used to increase or decrease a calculated or manually set safety stock proportionally. The safety stock factor can help with items that either regularly do not reach their target delivery readiness or conversely overshoot the required delivery readiness. With a safety stock factor above 1, the safety stock can be increased and with a value less than 1, it can be reduced.
Our advice:
Be extremely careful with the safety stock factor. It should only be used in exceptional cases, as it is extremely difficult to adjust by hand.
Occasionally, the safety stock factor can help to move from a manually set safety stock to a statistically calculated safety stock if there are reservations in the company about a statistically calculated safety stock. In this case, the safety stock factor can be used to approximate the calculated safety stock to the manually set safety stock. The advantage of this compromise solution compared to a completely manually set safety stock is, that it is at least automatically readjusted and not forgotten. However, if a statistically calculated safety stock fluctuates strongly from calculation to calculation, the safety stock factor dampens or increases this effect.
