Dynamic Safety Stock refers to the practice of adjusting safety stock levels in real-time or at regular intervals based on changing variables such as lead time, demand variability, and service level targets. Unlike static safety stock, which remains fixed regardless of changing supply or demand conditions, dynamic safety stock is more agile and responsive. By dynamically recalculating buffer stock, companies can better mitigate the risk of stockouts during demand spikes or supply delays without incurring excessive inventory costs. This approach relies on advanced analytics and inventory optimization algorithms to calculate optimal stock levels for each SKU at every location. Dynamic safety stock is particularly useful in multi-echelon inventory systems or for products with volatile demand. As companies adopt digital supply chains and demand sensing technologies, dynamic safety stock becomes a key lever for balancing inventory cost-efficiency with high customer service levels, ultimately supporting more resilient operations.
