Why lead time matters
Every reorder decision is a bet across the lead time: you’re buying today for the demand of weeks from now. Long or unreliable lead times force bigger safety buffers, earlier commitments, and worse guesses.
What makes up supply lead time
- Production or processing time at the supplier
- Freight: days by air, weeks by sea
- Customs, inspection, and receiving
- Variability: the range matters as much as the average
Questions
How does lead time set the reorder point?
Reorder when remaining stock covers expected demand across the lead time, plus safety stock for the surprises. Longer or shakier lead times push the trigger earlier.
How do stores shorten lead time?
Nearer suppliers, air freight for urgent portions, holding components instead of finished goods, and honest supplier scorecards. Often the win is cutting variability rather than the average.