Introduction to Inventory Buffering

May 11, 2022Articles

In a previous blog, we introduced a few alternatives to forecasting, which is based on predicting trends that are compiled on information gathered by past behavior and daily customer input and is risky at best. In the article we briefly introduced the Buffering System as one of the alternate programs for managing inventory.

In the most basic terms, a buffer acts as a cushion to absorb the impact of potential harm. It refers to a surplus of inventory that is stored in a warehouse in case of an emergency, supply chain failure, transportation delays, or an unexpected surge in demand. All things that we have been experiencing these last few years. Sometimes, changes in demand can be predicted. Other times, a business might see an influx in sales due to a sudden change in demand or market shortage. Even if you don’t predict a higher volume of orders in the near future, having a “buffer” in how much inventory you have available to meet demand provides peace of mind and security. 

So, why should you consider the buffer method?

  • Buffering is a better indicator than relying on predictions.
  • Buffering reduces stockout costs and panic ordering 
  • Buffering avoids delays in order fulfillment and shipping
  • Buffering improves OTIF orders and customer satisfaction

In order to calculate the right amount of buffer stock to have on hand, you will need to implement an inventory management system that tracks inventory and demand over time. That is where we come in. Shippers Solutions offers a wide range of innovative supply chain solutions designed to effectively manage the availability of raw materials. For manufacturers who struggle to regulate the precise amount of inventory needed to fully address operations and production demand we have a solution called Supply Stream.

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