Most stockouts are not surprises — they are mistimed reorders. The fix is not always more safety stock; it is aligning when you buy with how fast you sell and how long supply actually takes.
Days of cover in plain terms
Cover = on-hand quantity ÷ daily run rate (use sellable units, not system buckets that include quarantine or reserved stock). If cover is 10 days and lead time is 14 days, you are already late unless goods are in transit.
Lead time from history, not the supplier card
Posted lead times on supplier records are often optimistic. Use PO-to-receipt history: median days per supplier-SKU pair, plus variance. High-variance suppliers need buffer; stable suppliers may need less.
A simple reorder rule
Reorder when:
cover days < (lead time + receiving buffer + policy buffer)
Policy buffer might be three days for A-class lines and zero for C-class lines you are exiting.
Common mistakes
- Reordering on calendar rhythm (every Monday) instead of cover crossing a threshold
- Ignoring open POs and backorders in cover math
- Using one global safety stock field for SKUs with different velocity and margin
Rank reorders by risk × revenue at stake — not alphabetically by SKU.