Lead time is the total elapsed time from placing an order with a supplier to the goods entering your warehouse. It covers production, quality control, shipping, customs and inland transport. All inventory planning is built on this figure; assume it wrong and safety stock and reorder points come out wrong too.
What the supplier quotes is usually production time only; real lead time stretches noticeably once port waiting, customs clearance and inland distribution are added. The right method is to record the actual elapsed times of past orders and plan against the bad case rather than the average. Chinese New Year, the rush before religious holidays and the year-end period lengthen lead times predictably; those windows belong in the sourcing calendar in advance.
Lead time = Production + Loading + Transit + Customs + Inland transport
With 25 days of production, 30 days by sea and 10 days for customs and inland transport, real lead time is 65 days, not the 25 days the supplier quoted.
What the supplier quotes is usually production time only; real lead time stretches noticeably once port waiting, customs clearance and inland distribution are added. The right method is to record the actual elapsed times of past orders and plan against the bad case rather than the average. Chinese New Year, the rush be…
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