This term refers to strategic stockpiles maintained at critical locations in the supply chain to absorb demand surges or supply disruptions. These locations may include distribution centers, ports, or manufacturing plants. Key location buffers are determined based on risk assessment, transportation lead times, and customer proximity. They act as shock absorbers during emergencies or unexpected demand peaks. Inventory optimization tools simulate different demand-supply scenarios to determine the ideal quantity and placement of buffer stock. This reduces the need for panic replenishment, improves service levels, and enhances supply chain resilience.
