Setting Safety Stock correctly matters.

Skip ahead if you know the basics already.  

Safety Stock is inventory held to buffer changes in demand.*  If customers typically order 100 widgets a week, but order 150, 200, or occasionally 300, obviously we need to keep more than 100 on hand or else we’ll have a lot of stock-outs and a lot of disappointed customers. 

A Reorder Point is the level above safety stock where you need to order new stuff and account for how long it will take to arrive, so that you don’t dip into your safety stock.

It’s useful to think of inventory as stored capacity.  Higher inventories allow you to handle uncertainty better.  

There’s also a fundamental difference between goods-based and services-based operations.  In services-based operations, e.g., call centers, you can’t store capacity; you have to add capacity if you want faster or more services.**

What are our personal Safety Stock and Reorder Points for the things are important to us?  Which ones have storable capacity and which ones don’t?

The most important are our relationships, I think.  Where we turn for support, advice, and fun when we need to.  It’s worth pondering how much is storable—like inventory—or not.  This is likely an argument for broadening and deepening our relationships, both close ones and less close ones.  Financial resources are evidently storable and can be very helpful, but like inventory, they have their limitations, which are life-context dependent.

The one thing we know for certain we can’t build more of is Time.  We can’t store capacity, nor can we create new capacity.  And we’re uncertain what our own Time capacity is, what the Time capacities of the people we love are.

Perhaps, then, Time is the most precious resource of all.  And that’s important in our relationships, in what we prioritize.

-Chris

* For the record, yes, this is a very rudimentary treatment of a complex topic, on which there’s newer and more nuanced thinking.  However, for purposes of the analogy,  I feel like Classic OR 101 on SS/ROP is important.

** This is why horrible so-called AI call handling systems have proliferated.  It’s also why the menu structures take a long time to go through … queuing is a limited form of capacity addition because it smooths variability in the work arrival rate.