Safety stock is the buffer that stands between you and a stockout. Demand spikes and suppliers run late — safety stock absorbs both, so you keep selling. But hold too much and you tie up cash. This guide explains what safety stock is, how to size it, and how it works with your reorder point.
What is safety stock?
Safety stock is extra inventory you keep on hand as a cushion against uncertainty — variable demand and unreliable lead times. It is not your working stock; it is the reserve you dip into only when things do not go to plan.
Why you need it
Two things are never perfectly predictable: how fast an item sells, and how long a supplier takes to deliver. Without a buffer, a busy week or a late delivery means a stockout — lost sales, and customers who go elsewhere. Safety stock covers that gap.
How much safety stock to hold
A simple, widely used formula accounts for the worst case in both demand and lead time:
For example, if an item sells up to 12 a day (average 8), and lead time is up to 7 days (average 5): safety stock = (12 × 7) − (8 × 5) = 84 − 40 = 44 units.
Too much vs too little
Too little safety stock and you risk stockouts; too much and you tie up cash and risk overstocking. Hold more on fast-moving, unpredictable or hard-to-resupply items, and less on steady, reliable ones.
Safety stock and your reorder point
Safety stock is a building block of your reorder point — the level that triggers a new order. Reorder point = (average daily sales × lead time) + safety stock, so getting safety stock right keeps your reordering right too.
Set safety stock with real data
RushFlow tracks each item's sales rate and stock, so you can set sensible safety stock and reorder points per product and per branch — and get alerted before you run short.