Glossary
What is supplier lead time? Planned, quoted, actual
Lead time: Supplier lead time is the time between placing a purchase order and receiving the goods. Its variability matters as much as its average.
Actual lead time = receipt date - order date
By Roufaida Bouchamha, founder
The definition
Lead time is how long you wait between ordering a part and having it available. For purchased parts it usually runs from the purchase order date to the goods receipt date. Some teams add internal time, such as inspection before stock is usable.
Three lead times that are rarely the same
- Planned lead time: the value in the ERP, used by MRP, reorder points and safety stock. Often set once when the part was created.
- Quoted lead time: what the supplier says today, in a quote or an order confirmation.
- Actual lead time: what happened, measured from your own order and receipt dates.
When these drift apart, planning runs on the wrong number. That gap is lead-time drift.
How to measure actual lead time
- Export receipts for the last few months with the order date of each line.
- Compute receipt date minus order date for each line.
- Look at the median and the spread per supplier and per part family, not only the average.
- Compare with the planned lead time in the ERP.
Illustrative example, not a customer result
A supplier's planned lead time is 21 days. Over the last ten receipts, actual lead time ranged from 24 to 38 days, with a median of 30. Every reorder point on that supplier's parts is set about 9 days too short, and the parts keep appearing on the chase list.
Why variability matters
Two suppliers with the same 30-day average are not the same if one always delivers in 29 to 31 days and the other between 15 and 45. The second needs more safety stock or closer follow-up, whatever the average says.
Lead times across US manufacturing
The Institute for Supply Management publishes the average lead time for production materials every month. Our supplier lead time tracker follows it, with supplier delivery and inventory indexes, and links each figure to its source. Use it as context, not as a substitute for the lead times you measure on your own receipts.
How WERISCO uses it
WERISCO compares days of cover with the date each open order will arrive and shows where reorder points were set for lead times your suppliers no longer quote, from the current lead time you provide. It does not read supplier acknowledgments automatically and does not predict supplier delays; your team decides.
Questions people ask
- Should lead time include transport?
- Yes, for planning purposes lead time should run until the goods are usable in your plant, including transport and any inspection.
- How often should planned lead times be updated?
- Monthly for critical and long-lead parts, quarterly for the rest, and whenever a supplier announces a change.
- Which lead time should MRP use?
- The one that reflects what happens now: usually the supplier's current quote, checked against actual receipts.
