Lead Time
Lead time is the total time between placing an order and receiving the goods, a key measure of supplier responsiveness and supply reliability.
Lead time spans everything from order placement through processing, production or picking, and delivery. Shorter, more predictable lead times let buyers hold less safety stock and respond faster to demand; long or variable lead times force higher inventory buffers to avoid stock-outs.
Buyers track lead time as a performance metric and factor it into ordering decisions and safety-stock levels. Suppliers with owned inventory and delivery capability can offer shorter, more reliable lead times than those relying on third parties.
Frequently asked questions
- What is lead time?
- Lead time is the total time from placing an order to receiving the goods, covering processing, production or picking, and delivery.
- Why does lead time matter?
- Shorter, more predictable lead times let buyers hold less inventory and respond faster to demand, while long or variable lead times require larger safety-stock buffers.
Related terms
Safety Stock
Safety stock is extra inventory held as a buffer to protect against unexpected demand spikes or supply delays.
Read definitionJust-in-Time (JIT)
Just-in-time (JIT) is an inventory strategy where goods are ordered and received only as they are needed, minimising stock held on hand.
Read definitionFulfilment
Fulfilment is the process of receiving, processing, picking, packing and delivering an order to the buyer after it has been placed.
Read definitionExplore related across the knowledge graph
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Operating model · diagram
- 01
AI-first software
AI-first procurement software for long-tail spend
- 02
Live marketplace
A live B2B marketplace
- 03
Human services
Human sourcing and support
- 04
Optional add-on
Fulfilment support for merchants
