Sam Graham Article on Safety Stock

628 WordsFeb 26, 20182 Pages
This article was the most interesting out of the three articles I read. The author, Sam Graham, explains in this article what safety stock is and how to use it effectively and efficiently. Sam explains that he loves and hates safety stock simultaneously. He also explains that the reason for safety stock is to protect companies from uncertainty. This uncertainty comes because companies understand that they can never fully be in control. Sam also claims that certain companies can control their employees or their suppliers, but companies can never control both. There are three main uncertainties that companies face. Those uncertainties include variation in customer demand, supplier uncertainty, and quality. Variation in customer demand means that a company can’t force their customers to buy exactly what they want them to buy. Sam claims that forecasting customer demand is the biggest challenge that a company faces under operation. He says this is the biggest problem because companies forecast demand at the wrong level of the bill of material. In the article, Sam claims that companies often rely on forecasting. This could cause a major problem within the company when the forecasting is wrong. Supplier uncertainty means that a company cannot completely count on a supplier. The supplier may have a problem within their own facility, which would cause a problem with the original company. Sam claims that supplier will let down the company at some point during the supplier-customer
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