A Guide to Setting SKU Accurate Lead Times

Accurate lead times are crucial for ensuring timely inventory replenishment and preventing costly stockouts. This guide outlines the best practices and steps to calculate and update lead times for your SKUs within Planster.

Lead time is the total duration from the moment a purchase order is placed until the inventory is received and ready for use in your warehouse. This duration typically includes:

• Supplier order processing time

• Manufacturing time

• Transit/shipping time

• Warehouse receiving and processing time

To determine your actual lead times, review your historical purchase order data. This process involves:

• Calculate average lead times from the date of order placement to the date it was received.

• Note seasonal variations or supplier-specific delays.

• Instructions/timelines from your suppliers on their estimated lead times

To account for unforeseen variables, we recommend adding a buffer to your calculated lead time. This buffer helps mitigate risks from:

• Unforeseen delays ( e.g., weather, customs, supplier-related issues)

• Seasonal fluctuations (e.g., peak holiday periods)

Typically, add 5-10% additional buffer time to your average calculated lead time.

• Periodically review and update lead times based on the most recent supplier performance and changes in transit conditions.

• Adjust lead times more frequently for products with significant seasonal or market-driven variability.

• Maintain open communication with your suppliers to understand and anticipate any potential lead time changes.

• Monitor external factors (global shipping conditions, trade regulations) that could impact lead times.

• Recognize that different suppliers may have different lead times for similar products and customize your settings accordingly.

For further assistance or guidance on setting accurate lead times, please contact Planster Support.