What is lead time?

Lead time is the clock that every replenishment decision runs against. It starts when the PO goes out and ends when the goods are received, checked, and actually available, not when the truck pulls up. That last distinction matters: a pallet sitting unreceived in staging for three days is three days of lead time the reorder math never sees. Lead time is an input to nearly everything else: reorder points multiply daily usage by it, safety stock buffers against its variability, and backorder promises borrow their dates from it. When lead time is wrong in the system, all of that math is wrong with it. And it drifts. A supplier quotes 5 days during their slow season and ships in 12 during their busy one. An overseas component that arrived in 30 days last year takes 45 now. Where teams trip is treating lead time as a static field typed in once during setup. The better practice is measuring it: every PO has an order date and a receive date, so actual lead time per supplier per SKU is already sitting in your records. Review the actuals quarterly, use a realistic figure (many teams use the average plus a margin, or the 90th percentile for critical items), and update the reorder math when a supplier's behavior changes.