Guide

Supplier lead time: how to measure it and why it drives every reorder

Lead time is the most important number in inventory planning, and the one most stores never write down. Here's how to measure it and use it.

Why lead time matters more than stock level

"We have 60 units" means nothing on its own. With a 7-day supplier, 60 units of a product that sells 3 a day is plenty. With a 45-day supplier, you're already late. The reorder decision always comes from comparing days of stock with lead time.

What to include

  • Order processing: time for the supplier to confirm.
  • Production, if made to order.
  • Transit: shipping, plus customs for imports.
  • Receiving: unpacking, counting and getting it live in Shopify.

How to measure it

  1. List your last 3 to 5 POs per supplier.
  2. For each, count days from the PO date to the date stock was received.
  3. Use the average as your lead time and note the longest.
  4. Record it per supplier, and per product if some items ship from different factories.

Using it

Order-by date = today + days of stock − lead time − safety days

Try it with the days of stock calculator or the reorder point calculator. If lead times swing a lot, size your buffer with the safety stock calculator.

SteadyShelf stores a lead time for each supplier and uses it to give every product an order-by date. Change a supplier's lead time once and every product from that supplier updates.

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

FAQ

What is supplier lead time?

The total days from placing an order to having the stock sellable in your store: production, shipping, customs and receiving.

How do I measure lead time?

For each of your last few orders, count the days from PO sent to stock received. Use the average, and look at the longest one for your safety stock.

What if my supplier's lead time varies a lot?

Hold more safety stock, or plan with the longer lead time. The statistical safety stock formula assumes a reliable lead time, so add days on top if it isn't.

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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