Supplier lead time is the period between placing an order with a supplier and receiving the goods. It includes processing, manufacturing, and shipping time, and is a crucial factor in inventory planning and procurement decisions. Long or inconsistent lead times can disrupt replenishment cycles and increase the need for safety stock. Businesses must account for lead time variability to prevent stockouts or overstocking. Inventory optimization systems track historical lead times, analyze supplier performance, and incorporate lead time into demand planning models. Advanced tools also simulate scenarios to help choose suppliers based on reliability and responsiveness.
