Inventory Lead Time

A supplier who quotes 21 days is describing only their own part of the wait. The number that decides when you reorder starts when you release the purchase order. It ends later, once the goods are received, checked and put away.

Quoted lead time versus your lead time

That is why two people can say "lead time" and mean different things. A buyer means the supplier's promise. A planner means the days until stock is usable. A sales manager means the days from a customer's order to delivery. Each is a valid number, but only one belongs in a reorder decision.

Using the quote as the planning number invites a stockout, because the real wait is longer than the planned one. The formulas that use the result sit on a separate page, linked below. Below, the term is defined, separated from the terms it gets confused with, and turned into a log you can fill in from your last ten purchase orders.

Put-away means moving received goods to their storage location so they can be picked. Time spent approving the need before you release the order sits outside the number.

Procurement practice splits total lead time into internal lead time (from identifying a need to issuing the order) and external lead time (the supplier's development, manufacture, dispatch and delivery). Replenishment lead time, as defined here, starts at the release of the order, so it leaves out the internal half. Quotes cover only part of the external half.

Several different numbers get called "lead time". Only replenishment lead time belongs in a reorder decision.

Quoted lead time (the agreed timeframe), confirmed lead time (the supplier's confirmed date measured from the order date) and actual lead time (the time to real delivery) are separate measures. Wikipedia's entry on lead time lists them for a supplier's customer orders. In this entry, delivery time means only the transport leg.

Once the purchase order is released, the days sit in four places: supplier production, transit, customs for imports, and receiving. Quotes usually cover the first, sometimes the second. The rest is yours to measure.

The receiving end is yours. Count the days from the gate to the posted receipt using your goods receipt note.

For imports, customs is one slice. In the National Time Release Study 2025 by the Central Board of Indirect Taxes and Customs (CBIC), which sampled import bills of entry (the import declarations filed with customs) filed in the first week of January 2025, customs release took the averages below (PIB press release). That is one week's sample, so treat it as indicative. It is just over three days at a seaport (79.07 hours divided by 24). The study covers customs release only, not shipping, inland haulage or receiving. A broker's dates will differ, so log the date customs issues the "out of charge" order, which is the release to move the goods.

Keep one row per purchase order (PO) line, and calculate lead time as the date the stock became available minus the date you released the order.

Columns: supplier, item, PO released, supplier-confirmed date, dispatched, arrived at gate, receipt posted, available to sell or use, actual days, quoted days, difference, notes.

Rules:

• Use the first full receipt. Note part shipments.
• Flag orders placed well ahead of need. For those, use the supplier-confirmed ready date or the dispatch date in place of the available date, so the order still counts.
• Exclude releases from a blanket purchase order, or mark them, because one order spans many deliveries.
• At least ten orders per supplier are recommended. With fewer, report only the shortest and longest.

Use the average actual days as the lead time in the reorder point, and size safety stock from the gap between the longest order and the average. In the example, that is 32 days average and a 6-day buffer to the 38-day longest.

The reorder point formula turns those two numbers into a reorder level and safety stock. Start the log from the purchase order process so every order carries its released date.

Record the released and receipt dates in your purchase orders, and our inventory alerts show when back-ordered items arrive and when stock nears its minimum. Our inventory visibility feature shows sales reps in Salesforce the lead time and inventory level for each product, plus inventory on order. Our forecasting and purchase automation feature plans purchases and schedules purchase requisitions or purchase orders.

As of October 2026, purchase orders and warehouse transfers are included from the Basic plan ($199 per month billed annually), and every plan can be tried free for 15 days with no credit card.