Lead time
Lead time is the total time from placing a purchase order to receiving the goods. It includes supplier processing, manufacturing, shipping, and receiving. Every buyer thinks about it. Few track it systematically.
Part of the Procurement Glossary
How it works in practice
When you place a PO, you have an expected lead time — maybe from a quote, a contract, or past experience. That expectation drives your production planning. If the actual lead time is longer, parts arrive late. If it's shorter, you may have storage or timing issues.
In practice, lead time isn't static. It changes with supplier capacity, material availability, shipping conditions, and season. The lead time you used for planning six months ago may not reflect what the supplier can actually deliver today.
Most buyers track lead time informally — they remember that "Supplier X usually takes 6 weeks" — but don't have systematic data on actual vs. quoted lead times across their supplier base.
Why it matters
Lead time accuracy directly affects production scheduling. Overestimate and you order too early, tying up cash. Underestimate and parts arrive late, risking the production schedule.
Tracking actual lead times also informs sourcing decisions. If a supplier consistently delivers in 4 weeks when the quote says 6, that's valuable. If they consistently deliver in 8 weeks when the quote says 6, that's a conversation you need to have.
Tips
Track actual vs. quoted
Compare the lead time you were quoted against the actual delivery time. The gap — positive or negative — is data you need for planning and supplier evaluation.
Factor in the full cycle
Lead time isn't just manufacturing. It includes order processing, acknowledgment delays, shipping, customs, and receiving. Each stage can add days.
How PO-Relay helps
PO-Relay tracks the full lifecycle of every PO line item — from placement to receipt. The timestamps on each stage transition create an implicit record of actual lead time for every delivery.
While PO-Relay doesn't calculate lead time reports in V1, the data is captured in every loop timeline. You can see exactly when a PO was placed, when the supplier acknowledged, when it shipped, and when it was received.