Lead Time
Lead time is the total time between placing an order with a supplier and receiving the goods. It covers the supplier's production schedule, transit time, and handling, and determines when a job can start or progress.
Lead time is the total time between placing an order with a supplier and receiving the goods. It covers the supplier's production or picking schedule, transit time, and any handling on arrival. For project-based businesses, lead time determines when ordered goods will be available to use - which directly affects when a job can start or progress.
Why Lead Time Matters in Practice
Underestimating lead time is one of the most common causes of job delays and emergency freight costs. A promotional merchandise distributor quoting a two-week turnaround on printed polo shirts needs to account for the supplier's lead time on blank garments, the decorator's production queue, and shipping time. If blank stock is not already on hand, the actual lead time might be three to four weeks before decoration even begins.
The same issue arises in office furniture - where custom upholstered pieces can carry 16-week lead times - and in construction materials, where structural steel may need 12 weeks. The gap between assumed and actual lead time is where project schedules slip.
Some businesses also overlook internal lead time: the time between a customer order and the business raising its own purchase orders. Delays from waiting for artwork sign-off, deposit payment, or specification confirmation add elapsed time that is often invisible when customers ask for a delivery date.
Quoted vs. actual lead time
Suppliers give a quoted lead time at point of order. Actual lead time is the date goods are received minus the PO release date. Tracking both over time reveals supplier reliability patterns and helps businesses set customer expectations more accurately.
FAQs
How should lead times be communicated to customers? Build in a buffer based on the supplier's historical performance, not their quoted best-case figure. If a supplier quotes six weeks but routinely delivers in eight, plan around eight. Quoting a realistic delivery window and meeting it is far better for customer relationships than promising an optimistic date that slips.
Frequently asked questions
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