Lead Time
The total time between placing a purchase order and having that stock available to sell.
Lead time is how long it takes from the moment you place an order with a supplier to the moment that stock is received, checked in, and ready to sell. It includes the supplier's processing time, manufacturing if applicable, shipping, and your own receiving time.
Lead time is one of the most important numbers in inventory planning because it directly drives your reorder point and safety stock. Longer or less reliable lead times mean you need to reorder earlier and hold a bigger buffer.
Tracking actual lead times per supplier, rather than assuming a fixed number, is one of the fastest ways to reduce both stockouts and overstock.
Put it into practice
Related terms
- Reorder PointThe stock level at which you should place a new order so it arrives before you run out.
- Safety StockExtra inventory held as a buffer against demand spikes and supplier delays so you do not run out.
- Purchase Order (PO)A formal document a buyer sends a supplier to order goods at agreed quantities and prices.
Run it in one system
VNDLY tracks stock, orders, and suppliers together so terms like this stop being theory and start being automatic.