Definition
When you have an assembly or finished good made up of multiple components, each of which may in turn have their own components, you have a possible stack-up of lead times from beginning-to-end. This is referred to as an item's cumulative lead time.
There is an option in Default Safety Stock Settings (or via override) to have your safety stock calculated based on cumulative lead time if you wish. This is recommended if you stock finished goods, but none of the components, so you need to prepare for extended outages. For example, a stockout of your finished good with a 100-day cumulative lead time means you must start at the beginning of your supply chain.
If safety stock is held at intermediate levels of your BoM, then this is usually not necessary, and would only serve to inflate safety stock on your finished good unnecessarily.
For this reason, the Global Safety Stock Settings also includes an option to stop the cumulative LT calculation when you reach a level among the chain (e.g. hub/spoke or BoM components) where the item has a stocking order policy, indicating there should always be stock at that location. This can allow you to stock to cumulative lead time for a part's assembly, while not having to inflate safety stock beyond where the components are expected to be in inventory.
Applies To
Typically items that are in a BOM or an assembly good