Safety stock, explained without the maths

Inventory October 2026 · 6 min read

Safety stock is the cushion you keep so that a surprise doesn't empty the shelf. A busy week, a late delivery, a supplier that sends less than you ordered — the cushion absorbs it. Too small and customers find gaps. Too large and cash sits on shelves, ages and gets written off.

Almost every company holds some. Surprisingly few can explain why each product has the amount it has.

What decides the right size

• How unpredictable demand is. A steady product needs a small cushion; a spiky one needs more.
• How long you wait for delivery. The longer the wait, the more can change before new stock arrives.
• How reliable the supplier is. Late or short deliveries add risk.
• How much a stock-out hurts. Missing a bestseller is worse than missing a rarely bought item.

A worked example, in words

Imagine two products that both sell about 80 units a day on average. Product A sells between 75 and 85 every day. Product B sells 80 on average, but some days it sells 20 and other days 200. Both have a delivery time of a week.

For Product A, a tiny cushion is enough — tomorrow looks like today. For Product B, a week of waiting could easily bring several very busy days in a row, so it needs a much larger cushion to give customers the same chance of finding it on the shelf. Same average, completely different need. A flat rule like 'two weeks of cover' treats them identically — and gets both wrong.

The common mistake

Many companies set one rule and apply it to everything. It's easy to explain, and it's wrong almost everywhere: too much for steady items, too little for volatile ones. The rule is also rarely looked at again, even when demand or suppliers change. Buffers set during a launch project can still be in place years later, long after the product's behaviour has changed.

Cost of getting it wrong, both ways

• Too little: empty shelves, lost sales, annoyed customers, emergency orders that cost extra.
• Too much: cash locked in stock, storage costs, ageing and waste, and less room for products that would sell.

A practical routine

1. Group products by importance so effort goes where it matters most.
2. Size each cushion from how the product really behaves, not a flat rule.
3. Review the cushions regularly — quarterly is a good start — and after big changes such as a new supplier or a new season.
4. Keep a record of changes so you can see what worked.

You can try a simplified version yourself in the safety buffer calculator on our home page: move the sliders and watch the curve move.

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