Lead Time
Lead Time: The time between placing an order and receiving the goods.
Why lead time matters
If a supplier takes 14 days to deliver, a team needs enough stock to cover those 14 days plus a buffer for uncertainty.
Supplier lead time vs real lead time
Supplier quotes are often optimistic. Use observed lead time from recent orders when calculating reorder points.
How to reduce lead-time risk
Track supplier performance, keep safety stock for critical items, and set low-stock alerts early enough to cover delays.