Inventory how-to

How to measure supplier lead time variability

Track the actual days between placing each order and receiving it, for at least your last 6 to 10 orders per supplier.

Short answer: Track the actual days between placing each order and receiving it, for at least your last 6 to 10 orders per supplier. Calculate the average and the spread between your fastest and slowest orders. Use that spread to set your safety days, not just a guess.

Why average lead time is not enough

If a supplier averages 14 days but sometimes takes 21, planning only for 14 days will cause stockouts. You need to know how much lead time varies, not just the average, so you can set safety days that cover the slow orders.

What data to collect

For each purchase order, record the date you sent it and the date the stock was fully received. Do this per supplier, and ideally per SKU if lead times differ a lot within one supplier's catalog. Ten orders is a reasonable minimum before you trust the numbers.

How to turn this into a number you can use

Find the average lead time and the longest lead time in your sample. A simple and practical approach is to set safety days as the gap between the longest and the average. If most orders arrive close to the average but one or two are much slower, weight your safety days toward the slow cases rather than smoothing them away.

Keep it updated

Supplier performance changes. Recheck lead times every few months, especially after a supplier changes factories, carriers, or has a bad run of late shipments. If a supplier consistently drifts slower, update their lead time setting rather than just raising safety days.

Step by step

  1. Pull your last 6 to 10 orders per supplier from your records or emails.
  2. Record order date and full receipt date for each one.
  3. Calculate the average lead time per supplier.
  4. Find the longest lead time in that sample.
  5. Set safety days as roughly the difference between the longest and the average.
  6. Enter the average lead time and safety days into your reorder planning.
  7. Recheck every 3 to 6 months or after a late delivery.

Worked example

A store orders from a supplier eight times over six months. Lead times are 12, 13, 14, 14, 15, 18, 13, 21 days. The average is about 15 days. The longest is 21 days, a gap of 6 days above average. The store sets lead time at 15 days and safety days at 6 days, so reorder point planning uses 21 days of cover instead of just 15.

How SteadyShelf helps

SteadyShelf uses the lead time and safety days you enter per supplier to calculate order-by dates, but it does not automatically calculate variability from your order history. You need to work out the average and worst-case lead time yourself and enter safety days accordingly.

$29/month flat, unlimited products and suppliers, 30-day free trial. Run the numbers now with the free reorder point calculator.

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FAQ

What if I only have two or three past orders from a supplier?

Use what you have but treat the numbers as rough. Set safety days a bit higher than the gap suggests until you have more orders to confirm the pattern.

Should I measure lead time from order date or from payment date?

Use the date you actually sent the order to the supplier. If payment delays are a separate recurring problem, track that separately rather than folding it into lead time.

Let SteadyShelf do this math for every SKU

Order-by dates per supplier, seasonal forecasts and draft POs for your Shopify store. $29/month after a 30-day free trial.

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