Lead time: the number everything downstream depends on

Lead time is the elapsed time between asking for something and having it. It sounds like a supplier characteristic and behaves like a planning input: almost every stock decision, promise to a customer and production schedule rests on a lead time somebody wrote down once, from a quotation, and never checked against what happened.

What lead time actually includes

• Order processing at your end — the gap between somebody deciding and the order being placed, which is often the largest hidden component.
• Supplier handling before anything ships, which is where a quoted figure usually starts.
• Transit, including customs clearance where relevant.
• Receipt and inspection at your end before the item is genuinely available to use.
• Not just the parts the supplier controls, which is why their quoted figure and your experienced figure differ.

Why the average is the wrong number

Planning on an average lead time means being short roughly half the time. What matters for anybody holding stock is the spread: if deliveries usually take ten days but occasionally eighteen, the buffer has to cover eighteen, and the average of eleven tells you nothing useful. Record the distribution rather than the mean — three or four past orders are enough to see whether a supplier is consistent or merely consistent on average — and plan against a high percentile for anything where running out is expensive.

Measure from your own order history rather than asking. Suppliers quote their intention and deliver their history, and the difference between those two numbers is where stockouts live. Nobody quotes a longer lead time than they hope to achieve.

What variation costs

1. Inventory: the buffer you hold exists to cover variation, so inconsistency is paid for in cash on a shelf.
2. Expediting: rush shipments and overtime are the price of a lead time that moved unexpectedly.
3. Credibility: a promise to a customer built on an unreliable input becomes an unreliable promise.
4. Scheduling: a production plan cannot be tighter than the least predictable input it depends on.
5. Decide deliberately whether to pay for shorter or for more consistent, because they are different purchases and consistency is usually worth more.

Shortening it where you control it

The parts you own are usually the cheapest to fix. Approval delays, batching orders until somebody gets round to it, waiting for a monthly purchasing cycle and inspection backlogs at goods-in are all internal, all invisible in a supplier's figure, and all routinely add more days than the supplier does. Measuring the internal segment separately is what makes that visible, and it is the segment nobody tracks because it never appears on an invoice.

Ettex Sheets holds the measured figures per supplier and item — order date, promised date, actual arrival, and the spread that follows — which is what any reorder calculation needs underneath it. The buffer sized from that distribution is what turns a lead time into a stock level rather than an estimate.