Lead time
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is lead time?
Lead time is the time between placing an order and receiving the goods. For a distributor’s buyer, supplier lead time is how long the manufacturer takes to deliver; for a customer, lead time is how long the distributor takes, which is short for stock items and longer for special orders.
Lead time example
A drive motor has a six-week supplier lead time. The rep can promise one tomorrow if it is in stock, and otherwise has to quote about six weeks.
Related terms
- Reorder pointA reorder point is the stock level at which a distributor places a new purchase order for an item, set so the new stock arrives before the old runs out.
- Safety stockSafety stock is extra inventory a distributor keeps to cover unexpected demand or late supplier deliveries, so it doesn’t run out before the next shipment.
- Available to promise (ATP)Available to promise (ATP) is how much of an item a distributor can commit to new orders by a given date, including incoming stock not yet promised.
- Special orderA special order is an order for an item the distributor doesn’t keep in stock, bought from the supplier specifically for one customer.
