The Importance of Considering the Level of Protection Desired When Determining Spare Part Quantities

Modern retail and manufacturing businesses often face the challenge of stock management. Trends, unstable demands, and a constantly changing retail environment affect the products that should be stocked and the quantity in the warehouse and shelves. As a result, businesses must consider a certain level of protection as this reduces cost and maximizes efficiency. Safety stock is, therefore, an important practice in commercial organizations regardless of the inventory management system used by the business. Determining the spare parts quantity refers to the probability of having a spare part available when required, a variety of elements, and the reliability of the spares, among others (Muniz et al, 2021). Assessing the necessity of spare parts in a business relies on various factors. However, companies reduce inventory levels due to financial constraints despite seeking production continuity. Despite these challenges, businesses often aim at maintaining a safe inventory of spare part quantities. Therefore, assessing the safety factor, safety stock, and spare part quantities and their level of protection is crucial in maintaining a positive stock management that can withstand fluctuating demands.

Firstly, the reliability of a commodity lies in the quantity of spare parts available in the business. For organizations engaging in commercial practices, stock safety factors are crucial. These factors are significant regardless of the inventory management used in the company. All companies, regardless of their sizes, nature, inventory system, consumer trends, and maintenance, require stock protection. In this context, safety stock refers to the additional inventory held by the retailer or manufacturer to cushion a sudden increase in demand. A crucial reason why retailers and manufacturers implement a strict safety stock is to avoid stock-outs. Transitions in consumer demand and incorrect stock predictions often cause stock-outs.

Consequently, planning for the causative factors of stock-outs and maintaining a healthy inventory level can be challenging without stock safety practices. Safety stock is important in cushioning the business against demand uncertainty as retailers and manufacturers will possess products that sell at all times of the year. Products that sell more require a safety stock practice than those that do not. Running out of stock has huge implications for the daily commercial activities of a business, such as revenue, reduced market share, and strained supply and retailer relationships. Given this information, conducting stock safety helps businesses to mitigate such risks associated with stock-outs.

Additionally, safety stock and factors also protect a business against unforeseen changes in supply. This practice ensures that even when the business’s supplier closes or delays an order during transit, the normal operations with consumers continue due to insufficient inventory in spares. In the current economy, the supply chains are often globalized and lengthened with several forces causing delays and disruptions. These disruptions might cause negative implications on the business if a strict stock safety plan and protection are lacking. To avert such instances, businesses must implement a healthy safety stock practice to satisfy consumer demands during supply chain delays and disruptions (Jenkins, 2022). These actions assist businesses in maintaining normal activities during supply chain disruption hence gaining the consumers’ trust. The advantage of keeping a large stock quantity is attributed to the ability of the business to remain functional in cases where consumer demands surpass the normal supply. Generally, businesses invest huge amounts in maintaining the spare part quantities of goods that are always in demand at the expense of the slow-moving items.

Organizations often consider various operation management practices when implementing a stock safety management practice. Factors such as the availability and effectiveness of the products are prioritized when implementing stock management. Easily available products are often designated a low level of safety stock management compared to those that take time to be available. Further, commodities regularly used by consumers must be stocked in plenty compared to those required periodically. Safety stock is important in keeping customer service and satisfaction high, as there is a consistent inventory flow to retailers and other consumers. Although safety stock aims at keeping the warehouse and supply chain functioning properly, its main objective is to ensure that the consumers are satisfied and hence returning to make orders. Maintaining a constant flow and supply of goods crucially required by retailers and consumers, thus avoiding stock-outs, creates a positive perception of the business, unlike recording periodical stock-outs. Safety stock practice in most businesses follows a unique demand trend; thus, warehouse managers continuously determine the safety level following the rising or falling demands.

Moreover, lead time is crucial for companies that assemble items utilizing various components as it evaluates the minimum inventory and stock requirements. Having a stock safety program helps to counter the impacts of lead time uncertainty as it prevents production disruptions and issues related to customer delivery (Dey et al, 2021). For instance, when a company has deliveries arriving earlier or later than anticipated, a safety stock calibration will assist in covering for the unexpected delays and cover demand fluctuations hence maintaining consistent output. Moreover, most stock managers practice part lead time to determine which spare parts to stock. For businesses that engage in production, lost production due to lack of stock can be devastating and mean significant revenue loss; therefore, maintaining a healthy stock safety program is necessary.

Finally, effective stock safety reduces administrative and staff hours as time spent on communication, paperwork, and warehouse activities is significantly reduced. Supply chain leaders do not experience the challenges of scrambling and reordering orders with extra stock in the warehouse. This practice reduces calls and emails incurred when ordering new stocks. For the staff, stock safety also reduces the burden of unloading trucks and restocking racks. Therefore, the time spent on such activities can be used to improve the production and distribution of manufactured goods.

Conclusively, businesses must remain functional during extreme demands and supplies. Businesses have implemented effective safety stock initiatives to cushion them against running out of stock, especially during supply chain delays. Safety stock and spare part quantities help to prevent stock-outs, maintain customer satisfaction and enhance effective time practices. Combatively, warehouse managers avoid confusion and delays in production and supply through safety stockings.


Dey, B. K., Bhuniya, S., & Sarkar, B. (2021). Involvement of controllable lead time and variable demand for a smart manufacturing system under a supply chain management. Expert Systems with Applications184, 115464.

Jenkins, A. (2022, July 21). How to calculate safety stock. Oracle NetSuite.

Muniz, L. R., Conceição, S. V., Rodrigues, L. F., de Freitas Almeida, J. F., & Affonso, T. B. (2021). Spare parts inventory management: a new hybrid approach. The International Journal of Logistics Management32(1), 40-67.