What is Long lead time items?

Long lead time items need more planning buffer than everything else in your store. If you order them the same way you order fast local stock, you will run out while waiting weeks or months for the new batch to arrive.

The fix is to calculate the order-by date for these items using their real lead time and current sales pace, then place the order well before stock gets low. Reviewing these SKUs separately, on their own schedule, keeps them from getting lost among items that reorder weekly.

Formula

Example

A candle store sources glass jars from an overseas supplier with a 70 day lead time. The store sells 10 jars a day and has 900 jars on hand, giving 90 days of stock. Since 90 days of stock minus 70 days of lead time leaves only 20 days of buffer, the store needs to place the next order within 20 days to avoid running out.

Common mistakes

• Treating a 60-90 day lead time item the same as a local supplier that ships in 3 days.
• Forgetting that lead times for overseas suppliers can stretch further around holidays or peak shipping seasons.
• Not keeping enough safety stock to cover delays, since a stockout on a long lead time item can last months.

Long lead time items and SteadyShelf

SteadyShelf tracks each supplier's lead time separately and flags the order-by date for long lead time SKUs so they do not get missed next to faster-moving items.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

Related terms

Lead time · Lead time variability · Safety stock · Reorder point · Supplier lead time variability

Full inventory glossary

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