Lead time is the time between deciding to reorder and having the goods received, checked and ready to sell. Suppliers often quote only their own production or shipping time, which understates what your stock actually experiences (for example, a supplier may say "5 days" while your real lead time is 12).
Enter the days for each stage: internal order processing, the supplier’s production or picking time, transit, and your own receiving and put-away. Use averages from recent orders, and check the slowest recent order as well, because that one drives your safety stock.
Once you have the total, feed it into the reorder point calculator. A reorder point that ignores receiving and put-away days is a common cause of items arriving physically but still being unavailable to sell.
Lead Time Calculator
Total lead time
12 days
About 1.7 weeks
How the calculation works
Total lead time = order processing + supplier production + transit + receiving and put-away.
Example: 1 + 5 + 4 + 2 = 12 days, or about 1.7 weeks. If demand is 20 units a day, you sell roughly 240 units while the order is on its way, which is the number your reorder point has to cover.
The figure is an average. If your supplier is sometimes late, plan around the slowest realistic case, or add a safety stock buffer on top.
See also: Reorder point calculator, Glossary: lead time, Stock cover calculator.
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