Time between ordering and receiving.
WHY IT DETERMINES EVERYTHING
It sets how far ahead you must commit and how much stock you must hold.
WHAT LEAD TIME ACTUALLY INCLUDES
Time to place and confirm the order Supplier production time Waiting for consolidation or shipping Transit Clearance, for imports Inland transport Receiving and inspection
WHY THE FULL SEQUENCE MATTERS
Suppliers quote production time and businesses plan on it.
WHAT TO ESTABLISH
Total time from decision to availability.
HOW
Measure it, from records, rather than accepting quoted figures.
WHAT TO MEASURE
Actual lead time per supplier, over multiple orders.
WHAT TO ESTABLISH
Its variability.
WHY VARIABILITY MATTERS MORE THAN AVERAGE
Planning must accommodate the worst case, not the typical one.
WHAT TO CALCULATE
The longest lead time experienced.
WHAT TO DO ABOUT LONG LEAD TIMES
Order earlier Hold more stock Find closer sources Split orders between sources
WHAT TO ESTABLISH
Which items have the longest lead times.
WHY
They determine your planning horizon.
WHAT TO IDENTIFY
Items where a delay would stop production or sales.
WHAT TO DO ABOUT THEM
Hold buffer stock, or secure supply differently.
WHAT TO ESTABLISH ABOUT SUPPLIER COMMUNICATION
That they inform you of delays immediately.
WHY
It is what allows you to respond.
WHAT TO TRACK
Orders outstanding, with expected dates Orders overdue
WHAT TO DO
Chase before the date, not after.
