Worksheet

Inventory Risk Matrix & Buffer Strategy Worksheet

Interactive worksheet to classify SKUs by criticality, lead-time variability, and supplier risk; capture data, compute or estimate safety stock, and record recommended buffer and replenishment rules with an owner and review cadence.

Interactive Tool

Inventory Risk Matrix & Buffer Strategy Worksheet

Use this worksheet to classify a SKU by criticality, lead-time variability, and supplier risk, then record a recommended buffer strategy and replenishment rule. Two practical approaches are provided: a quick category-based buffer (fast) and a basic statistical safety-stock calculation (data-driven). Complete the fields below and save the assessment.

Quick guidance

  • Criticality: High = protect service even at higher inventory cost; Low = accept occasional stockouts to reduce inventory.
  • Supplier & variability: Stable supplier + low variability → kanban or small safety stock. High lead-time variability or low supplier reliability → larger safety stock, dual sourcing, or consignment strategies.

Basic statistical safety stock (practical)

Safety stock ≈ z × σ_d × √(lead_time_days). Choose z for target service level (z≈1.28 for 90%, 1.65 for 95%, 2.33 for 99%). If you only have demand CV, estimate σ_d = avg_daily_demand × CV.

This worksheet captures inputs for either approach and gives space to record a concrete replenishment rule and owner.

Enter the unique SKU or part number.
Short description and primary customer or process use.
Total units per year. Used to estimate average daily demand if needed.
If you track daily demand, enter it here. Otherwise leave blank and use annual demand/working days.
Enter CV = std dev / mean (e.g., 0.3). If unknown, estimate: 0.1=stable, 0.3=moderate, 0.6=high.
Average supplier lead time in days from order to receipt.
Standard deviation of lead time in days. If you only have min/max, use approx (max-min)/4.
Rate the supplier reliability (delivery on-time and in-full).
1.0 10.0
How critical is this SKU? High = will stop production or cause major customer impact.
Physical on-hand quantity at time of assessment.
Total quantity already on order but not received.
Choose the service level you want to protect for this SKU.
How is this SKU currently replenished?
Select a risk category based on criticality × lead time variability × supplier reliability. Guidance: Low risk = non-critical, low variability, reliable supplier. Medium = mix. High = critical OR high variability OR unreliable supplier.
Common mapped strategies: Kanban, Safety stock (days), Dual sourcing, Consignment, Capacity buffer, Emergency kit (spares), Hybrid.
Write specific rule: e.g., 'Safety stock = 5 days coverage (Z=1.65) → SS = 1.65 × σ_d × √LT ; Reorder point = SS + avg_daily_demand × LT. Review quarterly.'
If you compute safety stock here, show your numbers and formula. Formula reminder: SS ≈ z × σ_d × √(lead_time_days). If you used CV: σ_d = avg_daily_demand × CV.
Enter suggested kanban card quantity or bin size if using kanban.
Person accountable for this SKU's buffer and reviews.
How often this assessment should be reviewed and updated.
Record next steps (e.g., contact supplier, trial safety stock increase, initiate dual sourcing).
Check Yes to save this SKU assessment to the library.
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