In other words, safety stock serves to cover possible spikes in product demand over a specific period. The main function of safety stock is to protect a business’s logistics operations from unforeseen changes in buying trends, insufficient coordination on the production lines and even supply chain disruptions. While cycle stock relates to the amount of product a company uses to satisfy its regular orders, safety stock refers to the reserve inventory employed for unexpected peaks in product demand. What is the difference between cycle stock and safety stock? In the warehouse, it constitutes a metric for inventory management and in production centres, it’s applied to calculate product demand to keep up with manufacturing orders.
#STOCK INVENTORY MEANING SOFTWARE#
Organisations can improve their inventory management by implementing software solutions that analyse historic demand levels and take into account logistics information such as seasonality, stock turnover and product life cycles.Ĭycle stock is used in all kinds of facilities. To calculate your ideal inventory levels, it’s essential to analyse demand regularly. On the other hand, too many units of a SKU could limit cash flow and push up warehousing logistics costs.
If there’s a sudden increase in product demand ― or an inaccurate forecast ― the company will be forced to resort to its reserve stock to avoid a stockout.
Knowing exactly how much cycle stock you need is crucial for optimising inventory efficiency. This stock control method lets companies know the optimal stock levels their warehouse or physical store should have to respond to normal product demand.Ĭycle stock plays a key role in an organisation’s accounting system, as it’s used to meet standard demand for a product. What is cycle stock?Ĭycle stock is the part of a business’s inventory intended to fulfill sales orders in a given period. Analysing historical data and demand forecasts provides more detailed knowledge of your exact cycle stock levels.īy calculating cycle stock, companies ensure they have all the goods they need to prepare orders every day and satisfy customer demand. Cycle stock and what it means for inventory managementĬycle stock (or working inventory) refers to the level of inventory available to meet typical demand.Blog - Logistics & Supply Chain Trends >.Marketplaces & Ecommerce Platforms Integration.3PL Warehouse Management Software (WMS).Warehouse Management System | Easy Mecalux WMS.
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